Does Paid Parental Leave Affect KiwiSaver in NZ?

KiwiSaver and Paid Parental Leave in New Zealand

The interaction between paid parental leave (PPL) and KiwiSaver in NZ is an important consideration for many families.

KiwiSaver Contributions from PPL:

• Optional Contributions: Unlike regular employment income, KiwiSaver contributions are not automatically deducted from your PPL payments. You will need to arrange voluntary contributions if you wish to continue saving into your KiwiSaver account during this period.
• Employer Contributions: Your employer is generally not required to make employer contributions to your KiwiSaver while you are on paid parental leave, as these are typically tied to your active employment and gross earnings.

Impact on First Home Buyers:

• If you are planning to use your KiwiSaver funds for a first home withdrawal, it's crucial to understand how a period of lower or no contributions during PPL might affect your savings goals or the minimum contribution requirements for certain schemes (e.g., Kāinga Ora First Home Grant). You may need to ensure you meet the 'regular savings' criteria for the grant if you are considering it.

It's recommended to contact your KiwiSaver provider or the IRD for personalised advice, especially if you have specific financial goals related to your KiwiSaver.