It was not our money

In May 2022, Talia and her partner, Fetu, applied for significant financial hardship withdrawals from their KiwiSaver accounts. The couple wanted to withdraw all their KiwiSaver funds because they had no income and they were no longer able to access government COVID-19 support.

The supervisor of their KiwiSaver scheme declined their applications. The supervisor believed the couple had enough savings to fund their living expenses for the upcoming period.

Talia asked the supervisor to reconsider her application. The savings in their account did not belong to them: it was money they managed for Talia’s mother. The couple had been borrowing money from her, but they could no longer do this.

The supervisor confirmed Talia’s application was declined. The supervisor believed they had to treat the funds as being the couple’s because it was in their bank account, bank records indicated that the funds came from Talia (not her mother), and the funds had been used to pay the couple’s living expenses.

The supervisor also believed the couple should consider listing their investment property. They understood the couple’s concerns about selling it because of market conditions and that they would have to pay tax on the sale under the bright-line property rule. However, members must exhaust all alternative sources of funding before requesting a KiwiSaver withdrawal.

The couple asked FSCL to review the supervisor’s decision.


The couple believed the supervisor should not have considered the savings because it was Talia’s mother’s money. The couple were offended that the supervisor had not believed them.

The couple were not going to sell their property. Their combined KiwiSaver funds of around $30,000 were not going to be enough to fund their retirement. The investment property would be. They wanted their KiwiSaver funds to help them survive until they found new work.

The supervisor’s view remained unchanged.


At law, before a supervisor can agree to an early KiwiSaver withdrawal on the grounds of significant financial hardship, the supervisor must be reasonably satisfied that reasonable alternative sources of funding have been explored and have been exhausted.

We concluded that the supervisor’s decision to treat the savings as the couple’s was reasonable. A supervisor must consider the evidence before them. The account was in the couple’s name and bank records indicated that they used some of the savings to fund their living expenses. Further, there were no written records about the arrangements they had in place with Talia’s mother.

By the time we reviewed the applications, the savings had been spent. However, this did not mean withdrawals would be approved if the couple applied again. Their investment property also needed to be considered.

It was understandable that the couple did not want to sell the property. However, it was reasonable for the supervisor to consider the property a possible alternative source of funds and to have asked the couple about their plans to sell it.


We concluded that the couple should discontinue their complaint. They were disappointed with this but decided not to further pursue the matter.

Insights for consumers

Withdrawing early from KiwiSaver rather than selling an investment property may be better for the member’s overall financial position, but this is not something a supervisor considers when assessing a significant financial hardship withdrawal. Withdrawals are essentially a last resort where the member has no other way to meet their minimum living expenses or other costs which are causing them significant financial difficulties, such as medical costs. It is possible a member may be able to demonstrate to a supervisor that selling an investment is not a reasonable alternative source of funding, but there would need to be good reason for this, supported by evidence.