For someone not in work, Govt contributions and compounding investment returns mean a good nest egg.
Our son has special needs and will probably never be employed. He does, however, get a small pension from the government.

Would it be worth his while to join KiwiSaver?

Although it touts itself as a voluntary, work-based savings scheme KiwiSaver is open to any New Zealand citizen under 65 who calls New Zealand home.

You don't have to be in work to join and contribute to KiwiSaver, meaning children, job seekers, stay-at-home parents and people with special needs like your son can all save money into a KiwiSaver scheme.

Ana-Marie Lockyer, general manager products and marketing at ANZ Wealth, explains what your son could gain from joining KiwiSaver:

"There are great benefits of being in KiwiSaver that your son can take advantage of, even if he is not employed.


"The Government will contribute a $1000 kick-start to your son's KiwiSaver account when he joins.

"In addition, when your son turns 18, the Government will contribute 50 cents for each dollar he contributes (or any voluntary contributions you make to his KiwiSaver scheme for him), up to a maximum of $521.43 a year.

"So if you contribute $1042.86 into your son's account each year (from July 1 to June 30) the Government will contribute $521.43.

"These benefits and the benefit of compounding investment returns over time will help to build a nest egg for your son," says Lockyer.

It does require a commitment to contributing a minimum amount to KiwiSaver - currently the rate is 3 per cent of your yearly benefit but that has changed several times so it would pay to check the historic rates.

That nest egg can be withdrawn once your son reaches retirement age - currently that's set at 65 - to boost any superannuation support he may receive from the Government.

His KiwiSaver contributions won't be deducted directly from his pension so it will be a case of him - or you - making contributions directly to a KiwiSaver provider.

That can be as little or as much as you are able to afford but by adding $1042 each year to his account he will get the maximum $521.43.

As ANZ's Lockyer points out, even if you fall short of this amount the Government will match every $1 contributed with 50 cents.


It is possible to also access some of those savings early under special circumstances.

Anyone who becomes seriously ill in a way that either permanently affects their ability to work or poses a risk of death can withdraw all their KiwiSaver money.

Or if you fall on particularly hard times and, for example, are unable to pay basic living costs or your mortgage; you or a family member has become seriously ill or disabled and requires expensive treatment or home modification; or you have to pay for funeral costs, you can withdraw any contributions you and/ or an employer have made.

These early withdrawal options are at the discretion of the KiwiSaver fund's trustee and the bar is set fairly high so be prepared for some form filling and stern questioning.

The other option for early withdrawal is to buy a first home.

Anyone who hasn't owned a home before and has been in KiwiSaver for three years can apply to their provider to withdraw their contributions, any made by an employer, the investment returns and, from the beginning of April, any member tax credits they've earned.

KiwiSavers on modest incomes may also be eligible for a further boost from the Government's deposit subsidy scheme on top of what they've saved through KiwiSaver.

It pays out between $3000 and $5000 to people who have been consistently saving into their KiwiSaver for at least three years.

It does require a commitment to contributing a minimum amount to KiwiSaver - currently the rate is 3 per cent of your yearly benefit but that has changed several times so it would pay to check the historic rates.

Housing New Zealand manages applications for the deposit subsidy, which is about to be rebranded as the HomeStart grant.

From April 1 it will double the deposit funding available to people wanting to purchase a newly built house as their first home.

Assistance for buying an existing home remains the same.

Unlike withdrawing your KiwiSaver funds from your provider to put towards a first home the additional deposit help from Housing New Zealand also has income and house price restrictions attached.

The best source of information on the deposit assistance and changes about to come into effect is on the Housing New Zealand website.

To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose, Sorry, but Helen cannot answer all questions, correspond directly with readers, or give financial advice.

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.