In Life and Death: Your Guide To KiwiSaver Withdrawal Options

How can you withdraw your KiwiSaver funds early? What happens to your KiwiSaver funds when you die? Read on to learn more.

KiwiSaver is a voluntary contribution scheme that’s designed to help New Zealanders for their retirement. You simply save up a portion of your income for monthly contributions. Once you turn 65, you can withdraw all your money.

But, it’s not everything that KiwiSaver can do! It’s also designed to help NZ citizens and residents in their life — be it in paying bills, purchasing a home, and even moving overseas! You can access your KiwiSaver scheme early and withdraw money for a variety of reasons.

If you don’t know the early withdrawal options of KiwiSaver, read on to know more.

Saving for your first home using KiwiSaver

Aside from retirement, one of the most popular uses of KiwiSaver is helping first-time homebuyers. As long as you’ve been a KiwiSaver member for at least three years, you’re eligible to one-off withdraw money from your account to secure funding for your first home. This is regardless of your age and start date.

Simply talk to your KiwiSaver provider and Kāinga Ora - Homes and Communities about your financial options when purchasing your first home. Generally, you can withdraw the following funds from your KiwiSaver account:

• Your monthly contributions
• All your employer's contributions
• NZ Government’s contribution
• Any interest you’ve incurred
• Subsidies (if applicable)

Do note that you have to leave at least $1,000 in your account to keep it active. If you intend to close your account afterwards, you can withdraw this amount.

KiwiSaver first home withdrawal qualifications

Check out the complete qualifications in using KiwiSaver to purchase your first home. It’s recommended to enquire about additional qualifications from your provider before proceeding with your withdrawal.

• You’ve been contributing to your KiwiSaver for three years
• You’re buying property or land for the first time
• You’ve not withdrawn from your KiwiSaver to buy a property
• The property or land is within New Zealand territory
• You intend to live in the home or property as your place of residence

Aside from your contributions, you can get additional support through the KiwiSaver HomeStart Grant. Its value depends on whether you’re buying a brand new home or a pre-purchased one, but you may receive up to $10,000.

Can I use my KiwiSaver even if I purchased a home before?

The great news is, you may be able to use your KiwiSaver even if you’ve purchased a property before! You simply have to submit your application to Kāinga Ora for further assessment. They reserve the right to ensure you’re in the same financial situation as those buying the home for the first home.

Check the complete qualifications right here. Always consult your provider for the best financial decisions before withdrawing your money.

• You’re contributing to your KiwiSaver for three years
• You haven’t use your KiwiSaver to purchase a property
• You don't get interest or share in your previous home anymore
• Your assets shouldn’t be more than 20% of the house price cap

Depending on your situation, you may also be eligible for the HomeStart Grant. You can use your myIR to help you start with your application. It lets you create a PDF, with comprehensive calculations of your contributions and deductions. 

KiwiSaver financial hardship withdrawal

Another common use for KiwiSaver is supporting New Zealanders through financial challenges. Most people access their account early to pay for their debts, unexpected finances, fees, and more. This is a useful financial option to avoid going bankrupt.

What are the inclusions and exclusions of financial hardships?

What you can consider as financial hardships may differ depending on your circumstance. Generally, these situations are considered as hardships by most providers.

• Failure to pay living expenses including utilities, transportation, and more
• Inability to pay monthly dues like mortgage, rental payments, among others
• Failure to meet the special needs of disabled or medically-dependent people
• Paying funeral and burial costs of a dependent family member

On the other hand, these situations are often excluded by most providers. These aren’t considered as the minimum living expenses.

• Credit card and loan debts
• Infringement notices and fines
• Debt collection agency bills
• Financing holidays and travels

If you meet the qualifications, you can withdraw your contributions as well as the employer’s. You can’t withdraw contributions from the government. The amount you can access is relative to the amount you need to get you through financial hardship.

Can you also withdraw from your KiwiSaver for your family members?

This may differ per provider, but some allow you to support the financial needs of your family members through your KiwiSaver. They’re referred to as financial dependents, and they include the following:

• Your partner or spouse
• Your children
• Your close relatives

Whether it’s for you or your financial dependents, you need to present different documents to prove that you’re financially struggling. Typically, these include the following:

• Payslips and bank statements
• Proofs of the benefits you’ve received
• Overdue billing statements and invoices
• Separation agreement (whenever applicable)
• Correspondence from debt collection agencies
• Proof of identity like IDs and passport
• Accomplished form from your provider

It’s best to fill out these forms before applying for withdrawals. It’s also very important to be as truthful as possible. Lying can result in getting your application denied.

Withdrawing your KiwiSaver to move overseas

Moving abroad can drain out your savings, but KiwiSaver can help! You can withdraw or transfer your savings to finance your living expenses overseas. Regardless of the country you’re immigrating to, you can tap into your KiwiSaver to finance your move.

Moving your KiwiSaver to Australia

If you’re moving to Australia permanently, you can keep the money in your KiwiSaver scheme! Simply process the necessary documents to transfer it to an Australian Superannuation Scheme that accepts KiwiSaver transfers.

You need to prepare the following documents to process the transfer. These may vary greatly, so it’s best to consult your provider for full details.

• Completed transfer request form witnessed by a solicitor or notary public
• Certified copies of your passport, NZ driver’s license, or other legal identification
• Proof of emigration from New Zealand such as tickets or passport stamp
• Evidence of living in Australia such as utility bills or rental agreements
• Original letter from Australian Superannuation Fund indicating the acceptance of transfer

You can transfer the total balance of your KiwiSaver scheme, given that it complies with the maximum transfer amount by the Australian government.

How to transfer KiwiSaver when moving to another country

If you’re moving overseas aside from Australia, you may be able to transfer your funds to a limited number of foreign superannuation schemes. You can only transfer to a scheme that complies with the regulations of KiwiSaver Act 2006 Section 228(e). 

Although for the majority of countries, you may be only able to withdraw your savings. You can access the following contributions from your account. 

• Your monthly contributions
• Your employer’s contributions
• Your kickstart contribution of $1,000
• Subsidies (if applicable)
• Any interest you’ve earned

Your government contributions can’t be withdrawn. These will be returned to the estate. Most of all, note that you’re only eligible for withdrawal once you’ve lived outside New Zealand for at least a full year.

For the transfer requirements, you need to prepare the following documents. Similarly, this differs per provider so consult them ahead of time for more comprehensive information.

• Completed withdrawal form witnessed by a solicitor or notary public
• Certified copies of your passport, NZ driver’s license, or other legal identification
• Proof of emigration from New Zealand such as tickets or passport stamp
• Evidence of living overseas for at least a year such as utility bills and bank statements

Withdrawing KiwiSaver to pay for medical and hospital bills

If you got sick, injured, or disabled, KiwiSaver can help you pay for your medical and hospital bills. This is applicable when you meet the following situations:

• Being unable to perform everyday activities and work be it partially or completely
• Having an illness that pose imminent risk to your health and may even lead to death
• Contracting life-shortening congenital illness that lowers your life expectancy

If you aren’t sure whether your condition is eligible for KiwiSaver withdrawal, it’s best to talk with your provider for more information. If you’ve only been a member for two months, it’s recommended to contact Inland Revenue.

Can you apply even if you’re receiving salary and wages?

Yes, you can apply for KiwiSaver withdrawal even if you continuously receive regular salary and wages from your employment. 

You can withdraw all the funds from your KiwiSaver scheme, including the government’s contributions. Simply provide evidence such as a letter from the doctor or a medical certificate to support your application for withdrawal. 

If you can’t continue contributing to your KiwiSaver because of your illness, you have the choice to suspend your account. You just need to apply for a savings suspension.

What do you need to know about life-shortening congenital disease withdrawal?

When you apply withdrawal for life-shortening congenital disease, all contributions from the government and your employer stops. Withdrawal for this reason is considered as reaching the retirement age of 65, under the regulations set by the KiwiSaver act. 

Here are the main requirements you need to submit. Consult your provider for complete information.

• Accomplished life-shortening congenital condition withdrawal form
• Medical practitioner’s declaration of your condition
• Certified copies of your identification like passport and license
• Proof of address such as utility bills and billing statements

Once approved, you can withdraw all your money from your account, including the interest and government contributions. Of course, you can still contribute from your personal pocket, given that you’ve not closed your account yet.

What happens to KiwiSaver when you die?

It's very important to sort your KiwiSaver in case of your untimely death. You need to ensure that your savings will still be in good use even after you die.

Where will the money from your KiwiSaver go if you die?

Ultimately, all the money in your account will go to the estate. Without reservations, all the money or the full balance from your KiwiSaver are paid to the estate. If you want to allocate some of the proceeds to certain people or organisations, you'll need a will. This ensures your money ends up to the right people when you die. 

If you don’t have a will yet, it’s strongly recommended to finalise it now as it can also make it easier for the people who will handle your account later on.

What happens to your KiwiSaver if you don’t have a will?

If you don’t have a will — also referred to as dying ‘intestate’ — it may be more complicated. If the value of your KiwiSaver is more than $15,000, an application in the court designates someone like a relative or an estate administrator to handle the proceedings of your account. Do note that they can only manage your money; the law still decides on where your money will be allocated.

However, if the value of your KiwiSaver is less than $15,000 and the administration of your estate isn’t in New Zealand, your partner, children, close relatives, or guardian of your children can apply for the money without a will or application in the court.

Getting the right KiwiSaver scheme for your needs

To make sure you can access your KiwiSaver early for these reasons, make sure you have the KiwiSaver scheme that matches your needs. Different providers offer different requirements, and it can be difficult to search for them all.

Luckily, you can compare easily using our comparison tool. We list different providers that you can compare to, and get results within just a few minutes. Compare KiwiSaver schemes today, right here at glimp!