The Government has announced several significant KiwiSaver reforms as part of Budget 2025 - here's what you need to know:

1. Contribution Rate Increases (Phased)

  • From April 2026:
    Default employee and employer contribution rates will increase from 3% to 3.5%.

  • From April 2028:
    Rates will further increase to 4%.

  • Opt-down option:
    Members may temporarily opt down to the current 3% rate for up to 12 months (from 1 February 2026), by applying to Inland Revenue. This provides flexibility for those facing affordability challenges.

2. Government Contribution Reduced

  • From 1 July 2025, the government’s annual KiwiSaver contribution will be halved:

    • Reduced from 50 cents per dollar to 25 cents per dollar of employee contribution.

    • New maximum annual contribution: $260.72 (down from $521.43).

    • To receive the full amount, members must still contribute at least $1,042.86 per year.

  • Contributions made before 30 June 2025 will still be eligible for the full $521.43 match.

3. Means-Testing Introduced

  • From 1 July 2025, individuals earning over $180,000 per year will no longer be eligible for the government contribution.

  • This change is designed to better target the incentive toward low- and middle-income earners.

4. Employer & Government Contributions Extended to 16–17 Year Olds

  • From 1 July 2025, young people aged 16 and 17 will be eligible for both:

    • Government contributions (if contributing enough annually), and

    • Employer contributions (if employed and contributing).

Note: Auto-enrolment will still begin at age 18.

Key Takeaways

  • Most changes will apply automatically to KiwiSaver members.

  • Members can still choose to manage their contribution levels within the new framework.

Please contact us if you have any questions regarding these changes or need to review your KiwiSaver plans.