Insights for consumers
If you are experiencing financial hardship and need to withdraw your KiwiSaver funds:
- find out what information and documents you need before you apply
- check how long it takes your KiwiSaver provider (provider) to assess your application, and
- apply as soon as you can.
KiwiSaver provider: is the organisation that manages and invests your KiwiSaver funds (the fund manager). They receive withdrawal applications, but do not make decisions on them.
KiwiSaver supervisor: makes sure the provider follows all the rules. There are only five supervisors in NZ who oversee all the different KiwiSaver funds. They make the decisions on withdrawal applications.
Insights for providers
If you manage KiwiSaver financial hardship withdrawal applications:
- ensure you have systems in place to identify (and follow up on) missing or incomplete information
- if you specify a timeframe for considering a hardship application, don’t wait until the end of that timeframe to ask the applicant for more information. It is not reasonable to allow an applicant to wait anxiously for a decision on their hardship application
- clearly explain your timeframes for receiving, considering and processing applications on your website and in your communications to applicants.
Rebecca applies for a KiwiSaver hardship withdrawal
In early September 2025, Rebecca applied to withdraw $22,000 from her KiwiSaver funds, on the grounds of significant financial hardship, to pay for essential living costs and rent arrears.
The KiwiSaver supervisor approves part of her application
In late September 2025, the supervisor approved Rebecca’s request for essential living costs and asked for more information about her rent arrears.
The KiwiSaver supervisor approves the rest of her application
The supervisor approved payment for rent arrears in early October 2025, and Rebecca received the funds five days later.
Rebecca thought the provider took too long to process her application
Rebecca thought that the provider had mishandled her application. Despite lodging it in early September, it took more than 30 working days for her rent arrears to be paid.
Rebecca thought that the provider should have included the rent arrears in the original timeline for processing the application. She felt the provider had treated it as a reassessment, unnecessarily extending the timeframe of her application.
Rebecca said that the provider failed to update her on the application. She got further behind with her rent and faced potential enforcement action by her landlord. This increased the stress she was experiencing.
Given the urgency and nature of her hardship application, Rebecca thought the time taken to process her application was unreasonable and complained to FSCL.
The provider said they had acted within their timelines
The provider said they had acted within their processes and required timeframes, and had promptly assessed Rebecca’s initial application. They said they could not process Rebecca’s application for rent arrears until she provided the required information.
Did the provider do enough?
We acknowledged that the provider had processed Rebecca’s application within their timeframes. However, we were concerned with the reasonableness of that process.
Sixteen working days had passed between Rebecca’s application and partial approval of her hardship request, which was within the provider’s timeframe. However, the provider took 13 working days to ask Rebecca for her bank information. Given that Rebecca’s application was for significant financial hardship, we considered this delay unreasonable.
Rebecca had to wait too long for rent arrears
As the provider treated Rebecca’s information about her rental situation as a reassessment, she had to wait an extra eight working days. Given that the provider was familiar with Rebecca’s situation, we thought that it should not have required much time to assess Rebecca’s rental information.
How did FSCL suggest that the complaint should be resolved?
We suggested that the provider pay Rebecca $500 as compensation for non-financial loss, based on the stress and inconvenience she had experienced.
Both parties agreed, and we closed our file.
