There are very few people who, if offered a 50% guaranteed return on their money, would turn it down, particularly with investment returns being so low at present. Yet every June, thousands of people miss such an opportunity by failing to realise that their KiwiSaver contributions are less than what is required to get the full Member Tax Credit. In order to get the full credit of $521, contributions for the year 1 July to 30 June need to be $1,042. Topping up your contributions to that level means that for every dollar you put in, you get a tax credit of fifty cents; a 50% guaranteed return.

This should be of particular interest to you if:

• You have stopped working temporarily, for example to have a family
• You work part-time
• You are paid a low income
• You are self-employed and not on PAYE
• You are on PAYE for only some of your income

Member tax credits are paid in July based on contributions up to 30 June. It is important to check every June that you are on track to get your full Member Tax Credit. Usually your KiwiSaver provider will send this information to you. Rather than putting in a lump sum top-up every June, you can make your life simpler by setting up a direct debit to your KiwiSaver fund every month to make up the difference. That way, you don’t have the problem of having to find a lump sum each June. Your total contributions each month should be at least $87. Your regular voluntary contributions can be changed at any time if necessary.

Of course, while you are checking your contributions you should also check that your tax rate is correct and that you have chosen the most appropriate investment option for your funds.