KiwiSaver Questions, Retirement Planning

How the  KiwiSaver Government contributions can turn into $165,000 at retirement

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KiwiSaver Government contribution is a great way to earn rewards for contributing towards your retirement or first home savings. The Government contribution may only be $521.43 per year, but that is a lot of money over time, especially when including the accumulated returns from the cash being inside a KiwiSaver fund as shown in the Case Study.

What is Government Contributions?

Government contributions are when you receive 50 cents from the government for every dollar you put into your KiwiSaver. That’s extra money to add to your savings, and it can help you build up to a much larger balance over time.

How to receive Government Contributions?

The maximum amount of government contribution you can receive in one year is $521.43. To obtain the entirety of the government contributions, you must contribute at least $1042.86 of your own money between the 1st of July to the 30th of June each year and allow for processing time. Employer contributions, past government contributions and funds moved from Australian retirement schemes do not count, and only your voluntary contributions are added towards the maximum contribution. You can contribute to this amount through salary and wage deductions, payments to Inland Revenue, and payments to your scheme provider.


You may receive Government contributions if you are aged 18 or over and either:

  • live mainly in New Zealand
  • are a government employee serving outside New Zealand
  • Are working overseas as a volunteer, for a token payment, or a charitable organisation named in the Student Loan Act regulations. The work meets one or more of the requirements set out in the Student Loan Scheme Act 2011.

Because you are required to live mainly in NZ, the Government will not match any contributions you make while not residing in NZ.

If you join and turn 18 or reach the age of eligibility to stop contributing part-way through the year, the government contribution is based on how many days in the year you've been a member. So there is no need to worry if you’re only eligible for part of the year because you will still get part of the Government contribution. The calculation of the amount is based upon the number of days in the year you were eligible.

If you joined before 1 July 2019, you could receive government contributions until you turn 65 or have been a KiwiSaver member for five years, depending on what is later.

Case Study: How Government Contributions Change a KiwiSaver Balance

Sam is a self-employed contractor at 20 years old. As a self-employed contractor, he doesn't need to contribute to his KiwiSaver account from his pay and he doesn’t receive any employer contributions. But, he is interested in making the most of other available benefits, such as the government contribution.

For every year that Sam contributes at least $1,042.86 to his KiwiSaver account between 1 July and 30 June, the Government will pay $521.43 to his account. Because Sam is self-employed and doesn’t make employee contributions through his pay, he decides to set up a regular direct debit for $20.55 each week so he doesn’t have to worry about finding the money at short notice.

If Sam continues to receive the maximum Government contribution from age 20 until he is 65, the total Government contributions in his KiwiSaver account could add up to $23,000 at age 65. That’s $23,000 from the Government that he wouldn’t have otherwise received if his money was invested elsewhere.

When Sam’s own contributions and the returns he could expect from his investment in a balanced fund with a return of 3.5% each year are added to the government contributions, he’d have an estimated $165,000 in his KiwiSaver when he turns 65 – just from contributing $20.55 per week from age 20.


20 years old

65 years old without returns

65 years old with returns

Voluntary contributions




Government contributions









  • Calculations are rounded down to the nearest 1,000
  • Sam receives Government contributions appropriate to his contributions and at today’s levels only.
  • Where they haven’t been adjusted for the effect of rising prices over time (that is, inflation), in which case the amount does not reflect the ‘real’ buying power in the future
  • after fees, the fees used are an industry average for the fund type that may not reflect all fees.
  • The returns are gained by a balanced fund with a yearly return after fee rate of 3.5%
  • Sam’s Birthday is July 1st, with projected savings calculated in July


Government Contributions can increase your savings substantially, and with it being harder to live off of NZ Superannuation, this is an excellent opportunity for Kiwis to improve their balance. To find the right fund that aligns with your goals and help secure your future complete a KiwiSaver Healthcheck.

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