Why KiwiSaver Hardship Matters
KiwiSaver is meant for retirement, yet life can throw curveballs that put immediate bills ahead of long-term goals. In the 12 months to April 2025, more than 4,000 New Zealanders accessed their accounts because of serious financial distress. Early withdrawal is possible, but the process is detailed and evidence-heavy. Understanding the steps in advance saves time and reduces stress.
Who Can Apply For A KiwiSaver Hardship?
Under Schedule 1 of the KiwiSaver Act 2006 you may qualify if you cannot meet minimum living expenses, face enforced mortgage arrears on your family home, need to fund medical treatment, palliative care, disability modifications, or funeral costs for a dependant. Only your own and your employer’s contributions, plus investment returns, are available; the $1,000 kick-start and Government contributions stay locked in.
What You Cannot Withdraw
Member tax credits and the original kick-start remain invested until standard retirement age or another qualifying event. Knowing this in advance prevents disappointment and helps you set realistic expectations when calculating the lump sum you need.
Step 1: Pause and Plan
Before filling out forms, review your cash flow. A short savings suspension can boost your take-home pay within one pay cycle and does not require the same evidence load. Speak with creditors about repayment holidays and contact a free budgeting service. These actions show your KiwiSaver supervisor you have explored alternatives.
Step 2: Gather the Proof
Applications live or die on paperwork. Prepare:
- Last month of bank statements for all accounts
- Payslips or benefit letters for every household earner
- Invoices or arrears notices for overdue expenses
- Statements for credit, store, or personal loans
- Identification and proof of address
- A realistic budget showing income, essential costs, and any shortfall
Tip: The supervisor applies national “minimum living expense” benchmarks, not your actual lifestyle. Keep grocery, clothing, and entertainment estimates conservative.
Step 3: Complete Your Provider’s Form
Download the significant financial hardship form from your KiwiSaver provider. Every provider asks for:
- Personal financial position, assets, debts, vehicles, insurance
- Detailed monthly expenses, split into fixed, variable, and discretionary items
- Exact lump sum requested, with explanation of how it will solve the problem
State clearly how funds will be used (for example, pay three months of rent arrears). Vague wording slows approval.
Step 4: Statutory Declaration
Applications must be witnessed by an authorised person, usually a Justice of the Peace, lawyer, or chartered accountant. Book an appointment early and bring photo ID. The declaration confirms every figure you supply is accurate.
Step 5: Submit and Wait
After lodgement, the provider checks the form then passes it to the scheme supervisor, an independent trustee who makes the decision. Processing typically takes two to five weeks. If approved, payment usually reaches your bank account within ten working days.
How Much Can You Receive?
Supervisors normally release the lower of:
- Thirteen weeks of verified budget deficit, or
- The total of overdue invoices supplied
You can apply again after 13 weeks if circumstances remain dire, but a fresh evidence pack is required.
Impact on Future Contributions
Once your finances stabilise, consider restarting contributions as soon as possible. Even a small percentage reinstated early preserves valuable employer matching and tax credits, limiting the long-term dent in your retirement plan.
Common Reasons for Hardships Being Declined
- Regular spending on non-essential items visible in bank statements
- High balances in savings or offset accounts
- Incomplete documents, missing invoices, or unexplained cash withdrawals
- Significant assets such as a second vehicle that could be sold
Alternatives if Declined
- Negotiate temporary repayment plans with lenders
- Seek hardship variations on utilities or insurance
- Apply for Work and Income assistance or payment cards
- Sell non-essential assets to raise short-term cash
Strengthen Your Chances
- Suspend contributions first. It demonstrates self-help.
- Explain any anomalies upfront. A one-off restaurant spend may be fine if linked to a birthday.
- Stay polite. Assessment staff deal with large caseloads and tight rules they cannot override.
Life Post Approval
Withdrawn funds are non-taxable and do not need repayment. Keep receipts to prove the money was used for the stated purpose. Consider meeting a financial advisor once urgent bills are cleared. Adjusting your budget now can help rebuild your KiwiSaver balance faster.
Final Thoughts
Accessing KiwiSaver on hardship grounds is a safety valve, not a financial strategy. Used correctly, it protects families from losing homes or going without essentials. Earnslaw Goodlight can guide you through the evidence checklist, review your budget, and, when the immediate crisis passes, help rebuild your long-term investment plan. Reach out today for a confidential chat.
