A significant financial hardship withdrawal lets you take some of your KiwiSaver savings out before 65 if you can show you are in serious financial difficulty. The criteria are narrow, your provider and its supervisor (not Inland Revenue) decide, and only your and your employer’s contributions can come out. This guide covers who qualifies, what you can withdraw, the evidence you need and what happens after; the other early-withdrawal grounds are in the KiwiSaver withdrawals section.
For every other way to access KiwiSaver early (first home, serious illness, moving overseas and more), see the KiwiSaver withdrawal rules.
What Counts as Significant Financial Hardship
Hardship is assessed case by case: under the scheme rules your provider must be reasonably satisfied that reasonable alternative sources of funding have been explored and exhausted. Inland Revenue says significant financial hardship includes when you:
- Cannot meet minimum living expenses, such as food, accommodation and utilities
- Cannot pay the mortgage on the home you live in, and your mortgage provider is seeking to enforce the mortgage
- Need to modify your home to meet your special needs or those of a dependent family member
- Need to pay for medical treatment for yourself or a dependent family member
- Have a serious illness
- Need to pay funeral costs of a dependent family member
- Need palliative care for yourself or a dependant
A serious illness can also be a ground for withdrawal in its own right, with different rules on what you can take: see the KiwiSaver serious illness withdrawal.
What does not qualify
| Situation | Qualifies? |
|---|---|
| Redundancy or job loss alone | No, unless you then cannot meet minimum living expenses |
| Credit card, car loan or personal loan debt | No |
| Business failure | Only if it leaves you unable to meet minimum living expenses |
| Wanting to pay off a student loan | No (see KiwiSaver and student loans) |
| Relationship breakdown costs | No |
| Wanting to invest elsewhere | No |
Redundancy is not itself a qualifying reason. See KiwiSaver and redundancy.
What You Can Withdraw
If your application is accepted you can only withdraw your and your employer’s contributions; the government contributions are not available under hardship. The supervisor can limit the amount to what it considers is needed to relieve the hardship, so a hardship withdrawal is often less than your full balance.
Who Assesses the Application
Your KiwiSaver provider handles hardship applications and gives you the form to use; where the scheme has a supervisor, the supervisor checks and assesses the application. You only apply to Inland Revenue if you are within the first 2 months of your KiwiSaver membership.
Each provider has its own form and process, so the documents asked for and processing times vary between providers.
What Evidence Is Required
Inland Revenue says you will need to provide evidence that you are suffering significant financial hardship. What providers ask for varies with the provider and your circumstances, but typically includes:
For minimum living expenses:
- Bank statements
- An income and expenditure statement
- Evidence of all income sources (payslips, Work and Income payments, a partner’s income)
- An explanation of your circumstances
For mortgage hardship:
- Correspondence from your lender about enforcing the mortgage
- A current mortgage statement
- Your income and expenditure
For medical need:
- A medical certificate or letter from a registered health professional
- Treatment costs or quotes
Detailed, specific documents make the assessment easier. An incomplete application is usually returned or put on hold until the missing documents arrive.
How to Apply
- Contact your KiwiSaver provider and ask for its hardship application form
- Complete the form, describing your circumstances and which hardship ground applies
- Gather the supporting documents listed above
- Submit the complete application to your provider
- Wait for the decision: approved (with the amount), declined, or a request for more information
Hardship applications are one of the slower withdrawal types, because the provider reviews your evidence; how long a KiwiSaver withdrawal takes sets out what providers say about timing.
If your application is declined, you can ask for the reasons, provide more evidence and reapply, or take a complaint to your provider’s dispute resolution scheme (such as FSCL or IFSO); KiwiSaver complaints explains how.
What Happens After a Withdrawal
- Your remaining balance stays invested with your provider
- You stay a KiwiSaver member, and contributions continue if you are employed
- The balance rebuilds through future contributions
- How withdrawals are treated for tax is covered in is KiwiSaver taxed?
If you need to pause contributions rather than withdraw, a savings suspension stops deductions. Inland Revenue says you can apply for one within your first 12 months of membership if you are experiencing, or likely to experience, financial hardship.
Other Options to Look At
Work and Income
Work and Income provides income support, hardship grants and help with accommodation and medical costs for people in financial difficulty. See workandincome.govt.nz.
Reduce or pause KiwiSaver contributions
If you are employed and cash flow is the problem, you can apply to Inland Revenue for a temporary rate reduction to 3% (the standard minimum is 3.5%), or for a full savings suspension.
Budgeting help
MoneyTalks (0800 345 123) offers free financial mentoring, and Sorted (sorted.org.nz) has free budgeting tools. Citizens Advice Bureau can point you to local hardship services.
Your mortgage lender
If you are at risk of missing mortgage payments, most banks have hardship teams that can discuss options such as restructuring the loan.
The Long-Term Cost of a Hardship Withdrawal
Money taken out early stops earning returns. As an illustration, $15,000 withdrawn at age 42, with 23 years to 65 at an assumed 7% annual return, would otherwise have grown to about $71,000 by 65.
Frequently Asked Questions
Can I withdraw KiwiSaver if I can’t pay rent? Possibly. If you genuinely cannot meet minimum living expenses or cannot pay rent or board, you may qualify. You will need to provide evidence of your situation, such as bank statements and details of your income and expenses.
Does the application need to be complete before I submit it? Providers generally cannot assess an application until they have the documents they ask for, so a complete application avoids delays.
What can I withdraw for hardship? Only your and your employer’s contributions, up to the amount the supervisor decides is needed to relieve the hardship. The government contributions are not available under hardship.
Can I appeal a declined hardship application? You can ask your provider to review the decision, then complain to its dispute resolution scheme, such as FSCL or IFSO, depending on which scheme your provider belongs to.
Will a hardship withdrawal affect my future KiwiSaver? Your balance is permanently reduced by the amount withdrawn. Your membership continues, contributions continue if you are employed, and your remaining balance stays invested.