KiwiSaver lets you withdraw your savings early for health reasons. Inland Revenue groups these as two grounds: serious illness (which includes terminal illness and permanent disability) and a life-shortening congenital condition. This guide covers who qualifies for each, the evidence, what you can withdraw and how to apply. The other withdrawal grounds are covered in the KiwiSaver withdrawal guides.
For the other ways to access KiwiSaver early, see the KiwiSaver withdrawal rules.
Who Qualifies: Serious Illness
Inland Revenue says you may be able to withdraw some, or all, of your KiwiSaver savings early if you have:
- an illness, injury or disability that permanently affects your ability to work or poses a risk of death
So the serious illness ground has two alternative tests:
- Risk of death. This covers terminal illness. Industry guidelines for providers read a serious and imminent risk of death as death that is impending or generally expected within the next 18 months.
- Permanent effect on your ability to work. Industry guidelines for providers read this as being totally and permanently unable to engage in work you are suited to by experience, education or training. It can apply even where the condition is not life-threatening.
Each application is assessed against those tests using your medical evidence.
Who Qualifies: Life-Shortening Congenital Condition
The second health ground is a life-shortening congenital condition that lowers your life expectancy below the age of eligibility for New Zealand superannuation (currently 65). It is for members born with a condition that is expected to shorten their life, who may not be “ill” in the usual sense.
The process is different from serious illness: for a life-shortening congenital condition, you contact your KiwiSaver provider and they apply for you.
What You Can Withdraw
If your application is approved you can withdraw some, or all, of your savings. Inland Revenue lists:
- your contributions
- your employer’s contributions
- the $1,000 kick-start (if you got it)
- the government contributions
- fee subsidies (if you got these)
- interest you have earned
This is wider than a hardship withdrawal, where only your and your employer’s contributions are available.
If you withdraw because of a life-shortening congenital condition, Inland Revenue says you will also stop getting the government contribution, and your employer will stop contributing to your KiwiSaver.
How withdrawals are treated for tax is covered in is KiwiSaver taxed?.
Medical Evidence
Inland Revenue says you may need to provide medical evidence to support your application. Under industry guidelines for providers this is a medical certificate completed by a registered doctor or nurse practitioner (for the congenital ground it must be a doctor). It usually sets out:
- the diagnosis
- how the condition meets the test: that it poses a risk of death, permanently affects your ability to work, or (for the congenital ground) lowers your life expectancy below 65
- the practitioner’s details
Your provider may ask for further medical information.
How to Apply
Serious illness, if you receive salary or wages:
- within the first 2 months of your KiwiSaver membership, apply to Inland Revenue
- after the first 2 months, contact your KiwiSaver provider
Life-shortening congenital condition: contact your KiwiSaver provider, who applies for you.
The usual steps with a provider:
- Ask your provider for its serious illness (or congenital condition) withdrawal form
- Get the medical certificate from your doctor or nurse practitioner (a doctor for the congenital ground)
- Complete the form, including how much you want to withdraw and where it should be paid
- Submit the form with the medical evidence
- If approved, the money is paid to your nominated bank account
Processing time depends on your provider; what some providers say is in how long a KiwiSaver withdrawal takes.
Stopping contributions
If you have a serious illness you can stop further contributions from your salary or wages by applying for a savings suspension.
What Happens to the Money After Withdrawal
Once withdrawn, the funds are yours to use as you choose, for example for medical treatment or palliative care, supporting family or paying debts. There is no requirement to spend them on medical costs.
Serious Illness Withdrawal vs Death Benefit
A serious illness withdrawal lets the member access their own savings while alive. If a member dies with a KiwiSaver balance remaining, the balance goes to their estate instead; see KiwiSaver when a member dies.