Claiming Your Free KiwiSaver Government Contribution
🎁 What is the government contribution?
The KiwiSaver government contribution is money the government adds to your KiwiSaver account each year as a reward for saving. It used to be called the member tax credit, and it is one of the few genuinely free top-ups available to almost every working New Zealander. You do not apply for it separately: as long as you are an eligible member and you contribute your own money during the KiwiSaver year, your provider claims it from Inland Revenue on your behalf and it lands in your account a few weeks after the year ends. The catch is that the amount was cut in Budget 2025. From 1 July 2025 the government now adds 25 cents for every dollar you put in, half of what it used to be, up to a maximum of $260.72 a year. To collect that full amount you need to contribute at least $1,042.86 of your own money between 1 July and 30 June. This guide explains exactly how the contribution works now, who qualifies after the 2025 changes, and how to make sure you top up enough before the 30 June deadline so you never leave free money on the table.
What changed in Budget 2025
For years the government contribution matched 50 cents for every dollar you saved, up to a maximum of $521.43 per year. Budget 2025, delivered on 22 May 2025, halved that rate to make KiwiSaver more affordable for the government. The change took effect from 1 July 2025, which is the start of the KiwiSaver year, so the very first year affected is the year running from 1 July 2025 to 30 June 2026.
Two things changed at the same time:
- The rate was halved: from 50 cents to 25 cents for every dollar you contribute, dropping the maximum from $521.43 to $260.72 a year.
- An income cap was added: if your annual taxable income is more than $180,000, you no longer receive any government contribution.
One change went the other way and made more people eligible: from 1 July 2025 the government contribution was extended to 16 and 17 year olds, who previously had to wait until 18.
The threshold to earn the full contribution is still $1,042.86 of your own contributions across the year. What changed is how much the government adds on top: $260.72 now, rather than $521.43. If you were already contributing enough to max out the old credit, you are still contributing enough, you just receive less back.
Why it still matters
Even after the cut, $260.72 is a guaranteed 25% return on the first $1,042.86 you save each year, before your fund earns a single dollar of investment growth. No term deposit or savings account comes close to that. Over a working life those annual top-ups, plus the compounding growth on them, add up to thousands of dollars. The contribution is worth claiming in full every single year, and the effort to do so is usually small.
📊 How much you get and who qualifies
The government contribution is worked out on your own contributions during the KiwiSaver year, which runs from 1 July to 30 June, not the tax year. Understanding the rate, the cap and the eligibility rules helps you claim every dollar you are entitled to.
The current rate and maximum
| Feature | From 1 July 2025 | Before 1 July 2025 |
|---|---|---|
| Government adds | 25 cents per $1 you contribute | 50 cents per $1 you contribute |
| Maximum per year | $260.72 | $521.43 |
| Your contribution for the maximum | $1,042.86 | $1,042.86 |
| Income cap | None if income is $180,000 or less; nothing above | No income cap |
| Eligible age | 16 to 65 | 18 to 65 |
Who is eligible
To receive the government contribution for a KiwiSaver year you must meet all of these conditions:
- Be a KiwiSaver member and make your own contributions during the year.
- Be aged 16 to 65. Under 16s do not qualify. The upper limit is the age you can normally withdraw your savings (65).
- Mainly reside in New Zealand. The contribution is designed for people living here, so time spent living overseas generally does not count.
- Have annual taxable income of $180,000 or less. From 1 July 2025, members earning above $180,000 receive nothing.
Only money you put in counts towards the $1,042.86: contributions deducted from your pay, plus any voluntary payments you make. Your employer's contributions and the government contribution itself do not count. This matters most for people on the default rate whose pay-based contributions fall short of $1,042.86.
Pro-rata years
If you are only a member for part of the KiwiSaver year, for example you join partway through the year or you turn 65 during it, your maximum government contribution is reduced in proportion to the number of days you were eligible. Someone eligible for exactly half the year can receive up to half of $260.72, which is $130.36, and only if they contribute enough in that time.
Before 1 July 2025 there was no income test at all, so high earners still received the credit. From 1 July 2025, if your annual taxable income is over $180,000 you get nothing, no matter how much you contribute. If your income is close to the cap, it is worth checking where you land, because crossing $180,000 removes the entire contribution.
Employees, self-employed and non-earners
How you reach the $1,042.86 depends on how you earn:
- Employees: your contributions come out of your pay automatically at your chosen rate (3.5% is the default from 1 April 2026, rising to 4% from 1 April 2028). If your pay-based contributions already exceed $1,042.86 for the year, you get the full contribution without doing anything.
- Self-employed and contractors: unless you pay yourself a salary through PAYE, nothing is deducted for you. You need to make voluntary payments directly to your provider to reach $1,042.86.
- Non-earners: people not working, on a benefit, studying or caring for family can still qualify by making voluntary contributions, as long as they meet the age, residency and membership rules.
💰 How to top up before 30 June
You never fill in a form to claim the government contribution. Your KiwiSaver provider reports your contributions to Inland Revenue and claims the top-up for you after the KiwiSaver year ends on 30 June. Your only job is to make sure you have contributed at least $1,042.86 of your own money by that date.
Step 1: Check how much you have already contributed
Log in to your KiwiSaver provider or check your Inland Revenue myIR account and look at your own contributions between 1 July and 30 June. Do not count your employer's contributions or last year's government contribution. If the total is $1,042.86 or more, you will receive the full $260.72 and there is nothing else to do.
Step 2: Work out any shortfall
Step 3: Make a voluntary top-up before 30 June
You can pay the shortfall straight to your provider, or to Inland Revenue for your KiwiSaver account, by internet banking. Give yourself a few working days before 30 June so the payment is received and recorded in time. Even a partial top-up helps: every extra dollar you contribute (up to the $1,042.86 limit) earns another 25 cents.
You do not have to top up the whole shortfall. If you have contributed $700 and can only spare $200 more, that $200 still earns you an extra $50 (25% of $200). You would then get $225 for the year instead of $175, and you can top up more fully next year.
When savings suspensions bite
If you are on a savings suspension (formerly a contributions holiday), no contributions are being deducted from your pay, so you may contribute nothing towards the government contribution. You can still make voluntary payments during a suspension to keep earning it. If saving is tight, contributing even a few hundred dollars a year captures a share of the free money.
Contributions must reach your KiwiSaver account by 30 June to count for that year. There is no catch-up after the year closes: money you pay in July counts towards the next year, not the one just gone. Set a reminder for early June so a slow bank transfer does not cost you the top-up.
When you get paid
After 30 June, your provider claims the government contribution from Inland Revenue based on what you contributed during the year. The money is usually deposited into your KiwiSaver account by around the end of August. You will see it listed as a government contribution in your account transactions.
🔢 Real-World Examples
These examples show how the government contribution works for different New Zealanders under the rules that apply from 1 July 2025.
Situation: Aroha earns $65,000 and contributes to KiwiSaver at the 3.5% default rate straight from her pay. Her income is well under $180,000 and she is 34, so she is fully eligible.
Situation: Sam works part time earning $22,000 and contributes at the 3.5% default rate from his pay. His contributions fall short of the threshold, so a top-up is worthwhile.
Sam pays in $272.86 and gets $68.22 back, plus that $272.86 stays invested for his retirement. Few savings options return 25% instantly. If he cannot spare the full shortfall, any partial top-up still earns 25 cents per dollar.
Situation: Mere runs her own business and does not pay herself through PAYE, so nothing is deducted for KiwiSaver automatically. To get the government contribution she makes voluntary payments.
If Mere can only afford $500 this year, she still benefits:
Because no contributions come out of your pay, it is easy to reach 30 June having contributed nothing and miss the entire $260.72. Set up a regular automatic payment, or make a lump sum each June, so you never let the deadline pass.
Situation: David earns $195,000 and contributes at the 3.5% default rate from his pay. Because his taxable income is above $180,000, the income cap introduced on 1 July 2025 applies to him.
Before 1 July 2025 there was no income test, so David would have received up to $521.43. Under the current rules he gets nothing from the government, though his own and his employer's contributions still build his savings. His higher earnings mean he is contributing plenty regardless.
Sources
Figures in this guide were verified against Inland Revenue (ird.govt.nz) "Getting the KiwiSaver government contribution", the Budget 2025 announcement (budget.govt.nz) and the Beehive media release "KiwiSaver changes to encourage savings" (beehive.govt.nz). The current settings, effective from 1 July 2025, are 25 cents per $1 up to a maximum of $260.72 a year on contributions of $1,042.86, with a $180,000 income cap and an age range of 16 to 65. The previous maximum was $521.43 (50 cents per $1). Always confirm current figures with your KiwiSaver provider or Inland Revenue before acting.
Related tools and guides
- KiwiSaver Government Contribution Eligibility Calculator - check whether you qualify and how much to top up.
- KiwiSaver Calculator - project your balance to retirement.
- KiwiSaver Contributions Explained - how employee, employer and voluntary contributions work.
- KiwiSaver for the Self-Employed - contributing when you have no employer.
🎯 Test Your Knowledge
Complete this 10-question quiz to check your understanding of the KiwiSaver government contribution
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