Kiwisaver, Shelley Hanna: Banking on a nice top up

If you have contributed $1042.86 already, there is no need to make further contributions.

Q I lost my job because of Covid-19 so I haven't made any contributions to my KiwiSaver over the past three months. My husband said the other day that we should put enough money into my account to get the government top up. His income has actually increased with extra hours so we are doing okay. How much should I put in and can I do it online?

A The KiwiSaver year runs from July 1 to June 30 each year. Your contributions over this time are used to calculate your eligibility for the government contribution (previously known as Member Tax Credits). Members over the age of 18 and under 65 can get up to $521.43 from the government if they contribute $1042.86 or more themselves. Employer contributions do not count and for those who turn 18 (or 65) during the year, eligibility is calculated from their birthday.

You can find out how much you have contributed to your KiwiSaver since July 1 2019 by setting up a myIR login on the Inland Revenue website. You will find your KiwiSaver Member information by scrolling down the landing page to the bottom. Click on the link and you will get a summary of your contributions from July 1 2019 to June 30 2020. Contributions are calculated from the day that Inland Revenue is notified by your employer, not the day the money reaches your KiwiSaver account. With payday filing, this means IRD has up to date information about your contributions.

If you have contributed $1042.86 already, there is no need to make further contributions. If there is a shortfall, you have several options for getting the money into your account. If your KiwiSaver account is with your bank, you should be able to transfer the money online through internet banking. If your KiwiSaver is with a non-bank provider then their website is a good place to go to for instructions, or search for their account under "Payees" with internet banking. Make sure that you provide your name and account number/IRD number as a reference.

Perhaps the easiest option is to choose the "Pay Tax" option with internet banking. The dropdown box gives you 34 different types of tax payments to choose from. Scroll down until you get to "KiwiSaver Member Account KSS". Then all you need to do is put in your name, your IRD number and the amount you wish to pay. Inland Revenue will forward the funds on to your provider.

Inland Revenue makes an initial payment of the government contribution to providers in early July. Providers do a "wash up" — putting in a claim for those members who leave their top-ups right until the end of June. If you wake up on the morning of July 1 and realise that you have forgotten it will be too late.

From July 1 it would be worth your while to set up a direct debit into your KiwiSaver account for $20 per week. This should be enough to receive the full top up the following year.

Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 06 870 3838 or go to peak.net.nz. The information contained in this article is of a general nature and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz