As a first home buyer (or a second-chancer), you’re probably aware that you may be able to withdraw all but $1,000 of your KiwiSaver balance to put towards your house deposit. You probably also know that you can apply for a HomeStart grant to put towards your home, subject to income and house price caps.

The trap that some first home buyers have fallen into is where one of them has taken time off work. They realised that they could still contribute to KiwiSaver whilst not working, so that they would still qualify for the Government contribution. They put $20 per week into KiwiSaver, which was enough.

However, to be eligible for the HomeStart grant, you need to have contributed at least 3% of your income, if you’re working, for each of the years that you want to qualify for the HomeStart grant (minimum 3 years, maximum 5 years). For non-earners, you need to have contributed 3% of the minimum wage, based on a 40-hour week.

Contributing $20 a week has been enough for non-earners to qualify for both the Government contribution and the HomeStart grant. Until recently, that is. The trap is that on 1 April this year the minimum wage was increased to $20.00 per hour. This means that a non-earner will need to contribute at least $24.00 per week to maintain eligibility for the HomeStart grant.

With likely future increases in the minimum wage, I suggest that non-earners looking to buy a house in the next few years who want to get the HomeStart grant should increase their contributions to at least $25 per week. Please first check that you meet the income and house price caps.

Mark Lynch is a Financial Adviser. His Disclosure Statement is available free upon request. Any comments in this column are the opinion of the writer and should not be construed as financial advice.