Understanding KiwiSaver Savings Suspensions (e.g. A Contributions Holiday)
Everything you need to know about suspending savings payments and what this means for your KiwiSaver
Updated 19 July 2024
In this guide, we explain everything you need to go on a savings suspension. Prior to 1 April 2019 a savings suspension was called a contributions holiday. This guide refers to the decision to have a break from contributing to KiwiSaver as a 'savings suspension'. The process is simple - if an employee goes on a savings suspension, KiwiSaver contributions from their pay are stopped temporarily.
There are two options available:
Important: It can be difficult to get back into KiwiSaver contributions if you decide to suspend your payments. Government data from June 2023 shows that men outnumber women with suspensions, and average KiwiSaver balances remain low at around $30,000. We believe that suspending contributions is, at best, a short-term decision and there are numerous long-term from being a member.
In this guide, we explain everything you need to go on a savings suspension. Prior to 1 April 2019 a savings suspension was called a contributions holiday. This guide refers to the decision to have a break from contributing to KiwiSaver as a 'savings suspension'. The process is simple - if an employee goes on a savings suspension, KiwiSaver contributions from their pay are stopped temporarily.
There are two options available:
- A savings suspension (if you've been a KiwiSaver member for more than 12 months)
- An early savings suspension (if you've joined KiwiSaver within the last 12 months)
Important: It can be difficult to get back into KiwiSaver contributions if you decide to suspend your payments. Government data from June 2023 shows that men outnumber women with suspensions, and average KiwiSaver balances remain low at around $30,000. We believe that suspending contributions is, at best, a short-term decision and there are numerous long-term from being a member.
Savings Suspensions
Can you have a savings suspension?
All KiwiSaver members who have made a contribution and have been a member for 12 months or more can have a savings suspension. You don't need to provide a reason.
How long is a savings suspension?
You can take a savings suspension of between 3 months and 1 year.
There's no limit to the number of times you can take a savings suspension.
Can I restart my contributions while I am on a savings suspension?
All KiwiSaver members who have made a contribution and have been a member for 12 months or more can have a savings suspension. You don't need to provide a reason.
How long is a savings suspension?
You can take a savings suspension of between 3 months and 1 year.
There's no limit to the number of times you can take a savings suspension.
Can I restart my contributions while I am on a savings suspension?
- Yes - you can restart your contributions while you're on a savings suspension by asking your employer to begin making deductions again.
- You can start or stop your contributions at any time while you're on a savings suspension but if the change is within three months of the last change, your employer needs to agree.
- Your employer will begin compulsory employer contributions again when you restart contributions from your pay.
- Early savings suspension - an early savings suspension allows you to take a break from making contributions within the first 12 months of becoming a KiwiSaver member.
Can you have an early savings suspension? (relevant for anyone who has been a KiwiSaver member for less than 12 months)
You can apply for an early savings suspension, if you have made a KiwiSaver contribution and you're experiencing, or likely to experience, financial hardship.
You'll need to provide evidence of financial hardship, for reasons outside your control, to support your application. If your financial circumstances have changed for reasons within your control or discretion, your application may not be accepted. Our guide to financial hardship applications explains everything in detail.
How long is an early savings suspension?
The default period is 3 months, but the IRD may allow up to one year.
You'll need to provide evidence of financial hardship, for reasons outside your control, to support your application. If your financial circumstances have changed for reasons within your control or discretion, your application may not be accepted. Our guide to financial hardship applications explains everything in detail.
How long is an early savings suspension?
The default period is 3 months, but the IRD may allow up to one year.
How do I apply for a savings suspension?
To apply for a savings suspension you can:
Find out more about the savings suspension process.
- Apply online if you're registered for MrIR, or
- Print off and complete a Savings suspension request (KS6) and post it to Inland Revenue (address details are on the form), or
- Call Inland Revenue on 0800 549 472 (0800 KIWISAVER).
Find out more about the savings suspension process.
What happens to your contributions?
While you're on a savings suspension:
Be aware: Taking a savings suspension may affect your entitlement to the Government contribution.
- your employer is not required to make compulsory employer contributions
- you can still make voluntary contributions
Be aware: Taking a savings suspension may affect your entitlement to the Government contribution.
Savings Suspension Process
- Your savings suspension begins on the date Inland Revenue approves it.
- You'll receive a savings suspension notice confirming the start and end dates for your savings suspension - you need to keep this notice.
- Your employer will continue making deductions until they have seen this notice. If you've lost your savings suspension notice you can get a replacement notice through your myIR account or by contacting Inland Revenue.
Notifying your employers
The fastest way to stop deductions from your pay is to show your savings suspension notice to your employer as soon as you receive it. If you nominate your employer(s) when you apply, Inland Revenue will advise them to stop:
- Deductions from your pay, and
- Employer contributions.
Changing jobs during your savings suspension
If you change jobs while you have a saving suspension, you'll need to show your new employer your notice.
Restarting contributions early
You can restart your contributions before your savings suspension expires, just ask your employer to restart deductions from your pay.
Deductions made while you're on a savings suspension
If a notice was provided to your employer and they didn't stop deductions, you may contact Inland Revenue to have the amount refunded. If a refund is approved, your employer can also choose to have their compulsory employer contributions refunded to them.
When your savings suspension is nearly over
When your savings suspension has one month left, Inland Revenue will send you a reminder. If you wish to you can apply for another savings suspension.
When your savings suspension expires
When your savings suspension expires, Inland Revenue will ask your employer(s) to start deducting KiwiSaver contributions from your pay and start making employer contributions.
Credit: This information originally appeared on kiwisaver.govt.nz before the website was closed down. MoneyHub's research team continues to keep it up to date.
Related Guides
- KiwiSaver Hardship - if you're a KiwiSaver member and struggling with your finances, our guide explains everything you need to do to ask for an early redemption
- KiwiSaver First Home Withdrawal Guide - if you want to use your KiwiSaver balance for a house deposit, our guide explains everything you need to know
- Your contributions - You can choose how much to contribute. Find out what happens when you go on leave, receive a benefit or entitlement, or have a tax debt
- Your employer's contributions - If you're a KiwiSaver member making contributions from your pay, your employer will also contribute to your KiwiSaver savings
- Government contributions - To help you save, the Government will make an annual contribution towards your KiwiSaver account as long as you meet certain conditions.
- Voluntary contributions - make voluntary contributions (or lump sum payments) at any time, either directly to your KiwiSaver provider or through Inland Revenue
- KiwiSaver and tax - KiwiSaver contributions are deducted from your before-tax pay, and our guide explains everything you need to know.
- How to check your KiwiSaver contributions - Keeping track of your KiwiSaver contributions is easy with 'My KiwiSaver'
- KiwiSaver Withdrawal - If you joined KiwiSaver on or after 1 July 2019, you can withdraw your savings when you qualify for NZ Super (currently 65)
- KiwiSaver Providers - You can choose which scheme to join, even if you're provisionally allocated to an employer-chosen/default scheme
- Opting out of KiwiSaver - If you're a new employee who's been automatically enrolled, you can choose to opt out of KiwiSaver
- KiwiSaver Fund Selection Guide - 10 Must-Know Facts Revealing Everything You Need To Know About KiwiSaver
- KiwiSaver Calculator - our retirement calculator considers KiwiSaver contributions, how much you earn right now, how much you plan to spend during retirement, and how old you are, among other factors
