KiwiSaver Guide

KiwiSaver and parental leave

Congratulations on your growing family! While welcoming a new child brings immense joy, it also presents financial considerations. As you navigate the exciting (and sometimes daunting) world of parenthood, understanding what happens to KiwiSaver on maternity/paternity leave is crucial.

To find out if you’re eligible for paid parental leave, visit the Inland Revenue website.

Does KiwiSaver come out of parental leave?

You can choose to continue making KiwiSaver contributions from your government-paid parental leave payments. Making KiwiSaver contributions during parental leave is optional, however continuing contributions (even at a reduced rate) ensures your retirement savings keep growing while you bond with your little one. You can:

Request deductions from your paid parental leave payments. Tell Inland Revenue to deduct your chosen contribution amount from your paid parental leave payments when you apply for it. Alternatively, you can manage it later through your My IR account.
Make manual contributions directly to your provider. Here’s how you can top up your AMP KiwiSaver Scheme account.
Partner or family can contribute on your behalf. Here’s how you can contribute to someone else’s AMP KiwiSaver Scheme account.

Top tip: To continue receiving the full $521.43 government contribution, you need to contribute at least $1,042.86 into your KiwiSaver account between 1 July of the previous year and 30 June of the current year.

Government boost coming July 2024

From 1 July 2024, the Government will make a three percent KiwiSaver contribution to recipients of Paid Parental Leave who make their own contribution of at least 3%. This initiative aims to lessen the financial impact of parental leave on your retirement nest egg.

No employer contribution on parental leave

Unfortunately, employer contributions typically stop during parental leave. However, you can still make voluntary contributions directly to your KiwiSaver account.

Impact on first home buying

Taking a break from KiwiSaver contributions can affect your first home buyer eligibility. Be sure to check the specific rules and consult your scheme provider if you plan to use your KiwiSaver money for your first home.

Financial planning is key

Consider discussing your financial situation with an adviser who can help you make informed decisions about your KiwiSaver money when you go on parental leave, and make a plan for what happens after. If you can, gifting a KiwiSaver account to your little one is a simple way to invest in their financial future.

Maximise your KiwiSaver with AMP

Don't let parental leave stall your financial goals. Take control of your KiwiSaver investment with these resources we’ve developed to help you make the most of your KiwiSaver money.