Looking to buy a new home in the next few years and about to start parental leave? If the answer is yes, and you’re applying for the KiwiSaver First Home Grant, you might need to be wary of a few technicalities. The grant offers eligible first home buyers between $3,000 and $5,000 on an existing home, or up to a maximum of $10,000 for purchasing a new home or land to build on (depending on how long you’ve been a KiwiSaver member).

“Eligibility is the key here, as the grant stipulates you must be a KiwiSaver member for a minimum of three years, and be making at least the minimum contributions for all of that time,” says AdviceFirst adviser Casey Woolridge. “The latter is important, and particularly catches out new parents. Going on parental leave is referred to as a non-earner period, which means you’re not making any contributions to your KiwiSaver investment. The same applies to anyone who is self-employed, or stopped making contributions.”

Unfortunately, no contributions could mean no grant, which can easily put a crimp in your plans for a new home.

Casey says the minimum qualifying contribution for KiwiSaver is currently 3% of your total income (subject to change) so that’s the amount you need to hit to continue to be eligible* for the First Home Grant during your non-earner period.

“If you are due to take parental leave, or you’re self-employed, keep an eye on how much you’re contributing to your KiwiSaver account,” says Casey. “Voluntary contributions can help fill the gap and ensure you meet the contributions criteria. Keeping up with voluntary contributions will also ensure you qualify for the annual $521 government contribution along the way.”

To find out more about KiwiSaver first home withdrawals and the KiwiSaver First Home Grant contact an AdviceFirst adviser on 0800 438 238 or email letstalk@advicefirst.co.nz.

*Other criteria applies. See here for the full list of criteria.

AdviceFirst is a Financial Advice Provider (FSP23242).