Savings Suspension
Definition
A temporary suspension of KiwiSaver employee contributions for a period of 3 to 12 months.
Key Takeaways
- Savings Suspension allows KiwiSaver members to pause employee contributions for 3 to 12 months.
- During suspension, employer contributions also stop, and you lose Member Tax Credit eligibility.
- Useful for financial hardship, parental leave, unemployment, or major life expenses.
- Contributions automatically resume after the suspension period ends; apply through your provider.
Detailed Explanation
A Savings Suspension (also called a contributions holiday) allows KiwiSaver members to temporarily stop their employee contributions for a period between 3 and 12 months. This option is available to members facing financial hardship or significant life changes (such as parental leave, medical expenses, or unemployment) who need short-term relief from KiwiSaver deductions.
During a savings suspension, your employer contributions also stop (as employers are only required to contribute if you're contributing). However, you will not receive the Member Tax Credit during the suspension period, potentially costing you up to $260.72 in government contributions. Once the suspension ends, contributions automatically resume. You can apply for a savings suspension through your KiwiSaver provider.