He said that was the formal advice from Inland Revenue.
"It is supported by the view that the people who are joining KiwiSaver are essentially doing so because it is now well-organised within the workplace," he said in Parliament.
"We have got 15,000 to 20,000 people joining in a month.
"I would be very, very surprised if it changes at all as a result of this."
He said with the employee putting in [at least] 3 per cent, employers putting in [at least] 3 per cent and the Government matching employee savings up to $521 annually, "if you look at all those numbers over the normal sort of 45-year working period for most people, $1000 is immaterial".
Green co-leader Metiria Turei said that wealth inequality in New Zealand was twice as large as income inequality and implied that removing the kickstart payment could weaken incentives to build wealth through savings.
The latest KiwiSaver report of the Financial Markets Authority said $21.4 billion of assets was invested at March 31, 2014.
Finance Minister Bill English said on Budget day that the kickstart payment had done its job and provided an incentive for 2.5 million people to join when only 700,000 had been forecast to join by this stage.
Removing the kickstart is forecast to save $500 million over four years.
It was the first question time since the Budget and Mr Key tried to embarrass Labour leader Andrew Little over his comments last Friday - since withdrawn - that Labour would have to look at means testing of superannuation to contain costs.
Mr Little tried to embarrass Mr Key over his election promise not to impose any more taxes when the Budget introduced a new levy of $22 on a return international air ticket to fund extra costs for biosecurity protection.
The Government says it is a user-pays levy, not a tax, and there could be more of them.
Mr English: "The levy at the airports is a user charge and we would expect to be able to continue to expand the use of user charges."
Asked what other services or sectors could be subject to levies, a spokesman for Mr English said: "The Government is not actively looking to identify further user charges, however there may be instances that arise where it is fairer that the users of a service pay for it rather than taxpayers."
