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Serious illness and KiwiSaver withdrawal

For many years, Ravi had a job and contributed to a KiwiSaver fund.  However, unfortunately Ravi became unwell.  He suffered from several serious illnesses, including cirrhosis of the liver.  Although he took medication for his other illnesses, his liver was unable to be treated.  Eventually Ravi had to give up his job and his sole source of income was a sickness benefit.  Ravi was unable to live within his means.  He was trying to pay off a debt of approximately $3,000.  His weekly payments to Baycorp were barely covering interest on that debt, and he also had an overdraft of $500 with a bank.

Ravi’s position

At age 58, Ravi applied to the trustee of his KiwiSaver fund to withdraw around $6,500, the full balance of his KiwiSaver.  He applied on the grounds of serious illness and significant financial hardship.  Ravi felt that he would never be able to work again due to his illness.  He also wanted to be debt-free.

The trustee’s position

The trustee declined Ravi’s serious illness application, as it was not satisfied he met the criteria.  The trustee realised Ravi was not currently working due to his illness, but it had no medical evidence that he would never be able to work again.

The trustee partially approved Ravi’s significant financial hardship application.  The trustee approved a withdrawal of $1,300 to assist with 13 weeks’ budget shortfall.  It also approved a withdrawal to pay off Ravi’s overdraft.  It did not approve sufficient funds for Ravi to repay his debt to Baycorp, because Ravi was contributing towards that debt and Baycorp was not demanding immediate payment.


Ravi complained to FSCL about the trustee’s decision not to release his entire KiwiSaver balance.


We considered Ravi’s circumstances in relation to the KiwiSaver legislation.  To make sure KiwiSaver savings would be protected for retirement, the government made it very difficult for people to access their savings early.  Funds are generally ‘locked in’ until people turn 65.  We noted that people are allowed to withdraw their money early only in very limited circumstances.  One such circumstance is serious illness.  The illness must be so serious that the person can never work again. Another circumstance is significant financial hardship.  If a person cannot afford to meet their minimum living expenses, then that person is experiencing significant financial hardship.

We agreed that Ravi had not been able to provide sufficient evidence to the trustee to qualify for complete withdrawal of funds from his KiwiSaver.


Ravi went back to his doctor and obtained a further medical certificate.  This time Ravi’s illnesses had deteriorated to the point where the doctor was able to say that Ravi was unable to work at all, and that the doctor would almost certainly renew that opinion each time he reassessed Ravi.  The trustee considered this to be sufficient evidence that Ravi could never work again due to serious illness, and it agreed to release the full balance of Ravi’s KiwiSaver to him.

Insight for complainants

It is very difficult to access KiwiSaver money early, and there are very good reasons for that.  However, in some limited circumstances it is possible to do so, provided there is sufficient evidence that the person meets the withdrawal criteria.