What are Government Contributions (GVCs)?

Each year, the Government will contribute up to $521.43 towards every active KiwiSaver member by paying 50 cents for every dollar contributed, up to a maximum of $1,042.86 in member contributions for the period of the 1^st of July to the 30^th of June.

KiwiSaver members can contribute through:

• Salary and wage deductions
• Payments directly to Inland Revenue (IRD)
• Payments are made directly to the member’s chosen Scheme Provider.

However, not all members are eligible for the full year. Reasons for a member not being eligible for a full year can include:

• The member joining KiwiSaver partway through the year
• The member turning 18 during the year
• Members residing overseas
• Members reaching eligibility for a Retirement Withdrawal during the year.

Data Cleansing.

Data cleansing is integral to ensure that the claims we send are as accurate as possible and that all claims are successfully sent to the IRD. At Trustees Fund Administration, we start in early/mid-June. A final check is completed on the day we send annual GVC claims through, ensuring that the data we send on behalf of your members is as accurate as possible.

The data cleansing process covers the following:

• Ensuring that your member’s primary address has a postcode. Without a postcode, the GVC claim will fail.
• Checking that all ineligible notes are correct. Ineligible notes indicate when a member was residing overseas, which affects the number of days a member is eligible for GVC in any given year.
• Check for any invalid first contribution and original start dates.

Sending the Claims.

We submit the annual GVC claims in early July to expedite the GVC payments from the IRD. These claims are prepared and sent for all eligible members to the IRD for processing. The IRD typically responds to most of the claims within the first few days. The GVC claims contain member information such as the member’s name, IRD number, date of birth, contributions paid directly to us for the year, and the number of days the member is eligible for.

The Reconciliation Process.

Once the annual claims are submitted to IRD, we move into our reconciliation process of responses. This ensures that:

• All members who should have a GVC claim, does have a claim created as part of the annual GVC claim job.
• We successfully created and sent all claims to IRD.
• All members that had a claim received a response. The response will be either a GVC payment, a zero payment, or an error message.
• Members receive the expected GVC based on their eligible days and contributions during the year.

The total contributions for a member’s year can be affected by:

• The timing of the contribution, i.e. based on IRD's contribution date
• Whether the member has refunds and for what year the refunds are for.
• Whether the member has any other withdrawals or dishonours during the year.

Once we know each member's expected GVC for the year, we can compare that with what was received.

Investigate - all claims were created and sent.

This compares members who should have a claim and those who had a claim sent to IRD. If a member didn’t have a claim created as part of the annual claim process and we believe they should have, we check the account to find out why there was no claim. This could be due to a late change to the member’s account status, address, or ineligible note. If there is an issue with the account, we correct this and manually send the claim. If there is a valid reason for there not being a claim, we amend the reconciliation to reflect this.

Daily updates and summaries.

As we receive responses regarding your member's GVC from IRD, we send simple daily summaries to you, the Scheme Provider. These summaries detail:

• Total value of the GVC received for the day
• How many GVC payments were received
• How many zero payments were received
• How many error messages were received.

About a week after the claims have been sent, we can provide more detailed summaries through our reconciliation spreadsheet. These more detailed summaries include:

• Total GVC received each day
• Total claims sent
• A breakdown of the errors received
• A breakdown of how many members received the expected GVC, less GVC, or more GVC than expected
• How many members are still expecting their GVC
• How much GVC we are still expecting.

Communicating the reconciliation of our client’s members' KiwiSaver GVCs is important to us at Trustees Fund Administration. Initially, our clients will receive a detailed daily summary. After a few weeks, this becomes a weekly update for up to two months.

Members without a reply.

While most of the responses to our GVC claims are received in the first few days, we like to give the IRD a couple of weeks to respond. If we haven’t received a response by then, we will investigate any members who have not received either a payment, a zero payment or an error message. Sometimes, the issue is at IRD’s end, and they must push the claim through. Other times, an issue at our end prevents the claim from being successfully sent to IRD. Our team investigates these until all our client’s members’ who require a response receive one.

Members that have received less GVC than expected.

Suppose a member has received less GVC than we expected (over $10 different). In that case, we will investigate why this has happened.

Reasons for a lower GVC could be due to:

• The member's contribution amount in our reconciliations is too high and needs to be revised
• The member's eligible days are too high
• IRD has an error on their end

GVC errors.

There are various error messages that we may receive in response to a GVC claim. Some of these errors are investigated by the Complex Services team, while others are forwarded to the Operations team for resolution. Usually, we need to collaborate with the IRD to fix most of these errors.

The different error types that we receive from IRD are:

• The member's claim for this period is already received
• The member's eligible days are too high
• The member does not belong to the Scheme anymore and has transferred to a new Scheme Provider
• The member’s IRD number is invalid
• The member’s account is closed
• The member has an address error
• IRD is unable to calculate the members GVC
• Their GVC claim is for an invalid period.

Defaults.

During July and August, there are default members who will join our client schemes and are potentially eligible for GVC for the previous GVC period but have not yet made a claim. We will compile a list of all the eligible default members and manually file annual GVC claims for them. We will also reconcile the responses to ensure that everyone on the list has been accounted for.

IRD's outstanding list.

Every year, the IRD will provide us with a list of our clients' members who have not yet received a GVC claim. These are typically members who transferred to us after we sent our annual claims but before their old scheme sent their annual claims. First, we check the accounts to find out why they haven't received a claim, and then we manually send claims for those members if possible.