Effective 2pm, Thursday 21st May, the Government grandparented the $1,000 kick-start grant credited to the relevant KiwiSaver scheme for new members.
Initially a fee subsidy was paid by the Crown to each member's account. For people who join KiwiSaver from 1 April 2009, there is no fee subsidy. Whilst some KiwiSavers who joined prior to this date may still be eligible to receive a fee subsidy, by 2010 there will be no further payments. Previously, this had been set by regulation at $40 per annum, payable at the rate of $20 per member every six months.
The Government will also provide housing deposit assistance for a member's first home purchase. This is available after three years' membership, up to a maximum of $5,000 after five years. There are limits around household income.
Initially employer contributions up to the lower of the employee's contribution or 3% (effective from 1 April 2013) of the employee's gross salary or wages were exempt from Employer Superannuation Contribution Tax - ESCT (formerly called Specified Superannuation Contribution Withholding Tax - SSCWT). Effective 1 April 2012 the ESCT exemption was removed, and it is currently compulsory for all employers to deduct ESCT at the individual KiwiSavers applicable progressive ESCT rates.
Members making contributions to a complying fund are eligible for all the KiwiSaver benefits.
Initially member contributions to KiwiSaver schemes and complying superannuation funds, unless the member is under age 18, are matched by a tax credit of up to $1,042.86 per annum (equivalent to $20 per week) that will be paid directly into their KiwiSaver account (or complying superannuation fund). The Member Tax Credit (MTC) is to be paid to 50c for each $1 contributed by members to the new maximum amount of $521.43 per year. This lower maximum amount and MTC rate will apply for MTCs paid for the year ended 30 June 2012 and later years. This includes contributions made to KiwiSaver schemes by the self employed or not employed.