Posted 23 May 2025

Changes to KiwiSaver announced by the government in yesterday’s Budget will affect complying superannuation funds like UniSaver. After seeking expert advice, it seems clear that, from 1 July 2025:

• the government will contribute at the rate of 25 cents for every dollar you contribute to the locked section up to a maximum of $260.72 a year (approximately $5 per week). You will need to contribute $1,042.84 to get the maximum payment from the government. You won’t qualify for government contributions if you are aged 65 or over or if your total income is more than $180,000. Government contributions are based on your contributions for the year ended 30 June each year, so you will receive one final payment at the current rate of 50 cents for every dollar you contribute up to a maximum of $521.43.
• 16 and 17-year olds will be able to join UniSaver’s locked section and will qualify for government contributions. Compulsory employer contributions for these members will apply from 1 April 2026.

You may be aware that the default employee and employer contribution rates to KiwiSaver will increase from 3% to 4% of salary in two steps over three years from 1 April 2026. However, the current position on contributions for members of the locked section is unclear. The Taxation (Budget Measures) Bill (No. 2) which introduces the changes indicated in the Budget has not changed the minimum employee contribution rate for complying superannuation funds. It remains at 3%. However, the compulsory employer contribution may increase to 4%. We are seeking to establish, via our expert advisors, whether this is intentional or in error and will update this note when we know more.

Switching contributions to the standard section

The principal benefit of belonging to the locked section is to qualify for government contributions. If you no longer qualify for government contributions or otherwise no longer wish to contribute to the locked section, you can divert all your contributions to the standard section. Use form 3 change contributions [PDF, 80 KB] (complete section 2). You won’t be able to withdraw the balance of your locked accounts unless you are age 65 or over. Similarly, you can’t transfer the balance of your locked accounts to the standard section if you’re aged under 65. However, you may transfer the balance of your locked accounts to a KiwiSaver scheme if you wish. Use form 10 in-service withdrawal [PDF, 96 KB] (option 2).