KiwiSaver members need reminding about govt tax credits
KiwiSaver members are being reminded to make sure their annual contributions for the 12 months to June 30 are sufficient to ensure they get the full government hand out.
Tuesday, June 10th 2014, 7:56PM
For every dollar a member puts into their KiwiSaver account, the government puts in 50 cents – up to a maximum of $521.43 each year. The MTC is paid into a member’s KiwiSaver account in late July or August and to get their full MTC this year, individuals need to contribute $1,042.86 to their KiwiSaver account between July 1, 2013 and June 30, 2014.
For those who joined part way through the KiwiSaver MTC year, their MTC will be pro-rated.
“There aren’t many opportunities in life to get free money, so we think those saving for retirement should do their best to try and get as much of their $521 MTC from the Government as possible,” AMP chief customer officer Jeff Ruscoe says.
He says that over time MTC contributions can add up significantly and make a big difference over a lifetime of saving.
“Even if you are unable to top up the entire amount this year, the Government will still contribute 50 cents for every dollar paid to your KiwiSaver account. We just recommend people make a goal for next year to increase contributions to reach the $1,042.86 threshold,” continues Ruscoe.
Recent AMP research found that only 41% of working Kiwis are aware of the MTC credit available to them each year. In addition, 68% are unaware of how much they need to contribute in order to receive their full MTC payment.
“If someone is earning over $35,000 per year and contributing at 3% then they are likely to get the full $521. Many people don’t realise that by taking a contribution holiday they are missing out on free money from the Government.
“With so many people unaware of the MTC we believe that it’s absolutely essential that AMP and the rest of the industry takes time not only to educate Kiwis about the opportunity to receive their Government MTC contribution, but also to remind people as the deadline approaches so that we can all help New Zealanders live the retirement lifestyle they want,” Ruscoe says.
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