Outside the box

Terry, a solo parent of three talented teenage sportspeople, had been made redundant and decided to retrain. As a consequence, he was experiencing financial difficulty.

Terry asked his KiwiSaver supervisor to release money to meet his, and his family’s, living expenses. The KiwiSaver supervisor assessed the application against its standard criteria and released approximately $8,000 to cover Terry’s budget deficit for three months. From Terry’s perspective the amount was inadequate, and he made three further applications.

The KiwiSaver supervisor assessed each application and agreed to release more money.

However, the KiwiSaver supervisor got to the point where it could not release any more money and Terry referred his complaint to FSCL.



Terry explained that, as elite sportspeople, his family incurred more than the usual costs. Terry’s children had regular physiotherapy appointments, ate more than regular children, incurred more transport costs, and needed specialist sports shoes. In addition, the children incurred considerable expenses associated with international travel.

Quite apart from these special costs, Terry included in his budget:

  • dentist expenses for himself and his children
  • his $9,000 Visa bill
  • his education expenses, including university fees and associated costs.

The KiwiSaver supervisor said it was prepared to

  • take a generous view of the family’s food expenses and accept Terry’s estimate
  • release money for regular physiotherapy expenses
  • release some money for dental costs, but not as much as claimed by Terry, because the invoices had been paid some time ago
  • increase the amount allowed for clothing.

However, the KiwiSaver supervisor was not prepared to release money to pay:

  • the Visa debt in full
  • for international travel
  • Terry’s education costs.

The KiwiSaver supervisor said these were either not minimum expenses or had already been paid.



Generally, KiwiSaver is ‘locked in’ until the member turns 65 years of age. However, under the KiwiSaver Act 2006 (the Act) an early withdrawal is allowed in limited circumstances, including if the member is suffering, or is likely to suffer from, significant financial hardship.

The definitions of significant financial hardship include a member’s inability to meet their minimum living expenses. While the Act does not define minimum living expenses, KiwiSaver supervisors take guidance from the Workplace Savings Guidelines. The Guidelines state:

Overarching all of this, however, is a holistic assessment of the member’s circumstances which should not be overly ‘forensic’ or literal. If a member can establish, to the reasonable satisfaction of the Trustee [now known as the Supervisor], that in a practical sense he or she cannot meet (or is unlikely to be able to meet) minimum living expenses, then the withdrawal should be treated as permissible even if there is some expenditure at the fringes of what the Trustee considers to be a minimum living expense.

There was no doubt that Terry’s budget was in deficit and, without the release of funds from his KiwiSaver, he and his family would be unable to meet their minimum living expenses. The matter in dispute was the extent to which this holistic assessment could allow for the release of funds.

In a practical sense, the release of funds can be divided into two categories. The first category is a budgetary shortfall. A supervisor will release enough money to meet a budget deficit to cover a 13-week period to allow the member time to reassess their financial affairs. Often financial hardship is caused by an unexpected change in circumstances, and this 13-week period is designed to give the member a little breathing space, after which time the member can apply again.

The second category is where the supervisor can see that the member is unable to meet one-off expenses because of financial hardship. Perhaps a car needs urgent repairs and without it the member will be unable to work. A supervisor might be prepared to release enough money to pay the mechanic’s invoice.

With this background in mind, we reviewed Terry’s budget. Most of Terry’s expenses were accepted by the supervisor at face value. Of those that were in dispute it was our view that:

  • although Terry claimed $930 a month for transport, the supervisor’s estimate $600 was reasonable
  • because the dental expenses of $2,750.80 had been fully paid, the supervisor was not obliged to release a lump sum, but the supervisor’s assessment of $100 as an ongoing budget item was reasonable
  • the house maintenance invoices had been included in earlier withdrawals
  • the tertiary education fees had already been paid and so were not causing a financial pressure
  • there was no evidence of ongoing doctor’s expenses
  • interest on the mortgage had already been allowed for in the mortgage payments
  • the supervisor had released enough to cover the minimum payment on the Visa bill and we considered there was no obligation to release enough to pay the cost in full.



Terry advised that he did not accept our assessment but did not provide any substantive submissions. The supervisor was satisfied with our view. We discontinued our investigation.


Insights for consumers

In our experience, if a supervisor can see evidence of financial hardship caused by the inability to meet minimum living expenses, they will work with the member to release funds to alleviate that hardship. While the Workplace Savings Guidelines allow for some individualised assessment, there are limits. Expenses relating to elite sport cannot be considered a minimum living expense.