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a guide to

KiwiSaver - hardship

Father and Daughter Fishing

What is a Kiwisaver financial hardship withdrawal?

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KiwiSaver is designed for two things: buying a first home and growing your funds for retirement.  However, If you’re experiencing serious financial hardship, such as the loss of income or significant unexpected costs, a hardship withdrawal may be an option.

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You may be eligible if you’re unable to pay for:

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  • Minimum living expenses such as power, water and food bills

  • Mortgage, rental or board payments

  • Modifications needed on your home to meet special needs, if you or a dependent family member is disabled

  • Necessary medical treatment for you or a dependent family member

  • Funeral costs for a dependent family member.

What are minimal living expenses?

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These are the essential costs for daily life

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  • ​Food and groceries

  • Utility bills (power, water, phone)

  • Rent or mortgage

  • Transport (bus fares, petrol)

  • Medical care for you or dependents

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You cannot use your funds to pay for:

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  • Paying off credit card debt

  • Hire purchase debt for non-essential living expenses

  • Fines, debt collection agency bills

  • Holidays or unnecessary travel

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You can however apply to use your KiwiSaver to pay off amounts that are outstanding and in arrears.

Withdrawing your KiwiSaver money has long-term effects

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If you withdraw money from your kiwisaver now, it will affect how much you have available when you retire and could potentially reduce your quality of life in retirement. 

It’s important to make sure you consider all other available options first before making this significant decision. Withdrawing your kiwisaver needs to be a last resort.

​Consider other options first

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  • Kiwisaver Savings Suspension  

You may want to take a short break from making KiwiSaver contributions.

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  • Talk to your Bank or lenders  

Banks and other financial service providers are willing to work with customers who are struggling financially.

 

  • No-interest loans

Good Loans run by Good Shepherd - https://goodshepherd.org.nz

Nga Tangata Microfinance - https://www.ngatangatamicrofinance.org.nz/

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These types of loans are a great alternative to high-interest loans.

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  • Government Support

Work and Income has a number of relief systems in place to help us through a crisis or you’re struggling to meet living costs or had an unexpected bill, they may be able to help you, even if you’re working. 

Call 0800 779 997

How to Apply for a Hardship Withdrawal

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1. Download the application form from your KiwiSaver provider's website.


2. You'll need to provide:

  • Bank statements

  • Proof of income

  • Proof of any overdue bills

  • Relevant documents

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3. You’ll need to prove you've tried other ways to find money, like using savings or asking for help from your bank and/or Work and Income.

How Much Can You Withdraw?

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You can withdraw:

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  • Contributions made by you and your employer but not the Government's contributions.

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  • The amount you can withdraw depends on what the scheme supervisor thinks is enough to cover your shortfall for 3 months and any overdue bills.

Remember withdrawing from your KiwiSaver now will reduce your savings for retirement, affecting your future finances. It should be a last resort, consider other options before taking this step.
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