Mum’s the word on KiwiSaver assistance
The very people who could really use HomeStart grants are missing out.
One woman’s maternity leave KiwiSaver shock has revealed many people are missing out on first home grants.
When Amy Wright from Christchurch went on maternity leave, nobody told her she should make voluntary contributions to KiwiSaver or risk missing out on the HomeStart grants.
The grants of between $3000 and $5000 are designed to help young people buy homes, but only if they have been contributing members of KiwiSaver for at least three years.
Wright took to Facebook to alert other new mums to the threat.
‘‘So this is a warning, especially for mums like me who have been on maternity leave,’’ she said. ‘‘We’re trying to buy a house, and applied for the KiwiSaver home grant which gives you $1000 for every year you are a member of KiwiSaver.
‘‘But actually, you have to have been making contributions for a minimum of three years.
‘‘If I knew that, I would have made my own voluntary payments while on maternity leave.
‘‘Instead, I’ve missed out on a free $3000 we really needed for our deposit.’’
Wright was just a few months short of the three years of contributions she needed to make, all of it a result of her maternity leave.
The good news is that she got the place, and will be there in time to celebrate Christmas.
The bad news is there is no appeal of the decision, and nor is she alone in missing out on the grant.
Housing New Zealand (HNZ), which administers the grants, sees others in her position, and not only new mums. The selfemployed are also missing out.
HNZ’s HomeStart grant rules require KiwiSavers to put in the equivalent of 3 per cent of their gross incomes to be considered to be contributing for the purposes of meeting the minimum three-year contribution period which qualifies them for the $3000 grant.
Just putting in the minimum $1042.86 a year needed to get the full $521.43 member tax credit is not considered enough, HNZ rules state.
Four years of contributions qualify KiwiSavers for $4000, and five years qualifies them for the maximum $5000, meaning couples stand to lose out on up to $10,000 if they are judged not to have made sufficient voluntary contributions.
Unemployed people, and those temporarily without an income, are expected to make voluntary contributions equal to 3 per cent of the gross adult minimum wage, which equates to contributions of around $20 a week.
Wright said she was not given the option of making a catch-up payment, which HNZ said it did allow in some cases.
She feels HNZ were looking for reasons to say no.
‘‘I can’t understand why they are looking for ways to decline people like me.
‘‘The grants are designed to help people like us into homes.’’
She also feels like there’s something off in the design of the grants, which seem to be catching out new mums.
‘‘I felt a little bit discriminated against because I had been on maternity leave,’’ she said.
KiwiSaver expert David Boyle from the Commission for Financial Capability thinks human resources departments need to be aware of the KiwiSaver aspects of maternity leave.
‘‘It should be part of the ‘pack’ of information people get when they go on maternity leave.’’
‘‘I’ve missed out on a free $3000 we really needed for our deposit.’’ Amy Wright