Crown Subsidies for KiwiSaver Members

The Government will make a $1,000 initial contribution to the relevant KiwiSaver scheme for the credit of each new member.
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, at $1,000 per year of contributory membership, up to a maximum of $5,000 after five years. There are limits around household income and the purchase price of the first home.
The $1,000 initial Government contribution is not subject to income or withholding tax or gift duty.
Employer contributions up to the lower of the employee's contribution or 2% of the employee's gross salary or wages (4% up to 31 March 2009) will be exempt from Employer Superannuation Contribution Tax - ESCT (formerly called Specified Superannuation Contribution Withholding Tax - SSCWT).
Members making contributions to a complying fund are eligible for all the KiwiSaver benefits other than the $1,000 KiwiSaver initial contribution.
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). This includes contributions made to KiwiSaver schemes by the self employed or not employed.