Generally, you will have to wait until you are eligible to receive NZ Superannuation to withdraw the money in your KiwiSaver account. In extreme situations, you may be able to access some of the money in your KiwiSaver account earlier. Watch this video for information about when you may be able to withdraw your KiwiSaver savings.
Standard withdrawal options for KiwiSaver
(February 2011, revised July 2013)
Interviewer: Liz, can you explain how standard withdrawals from KiwiSaver work?
[Liz Bushell, Client Services, Gareth Morgan KiwiSaver Limited]
Liz: You’re eligible to withdraw your funds from KiwiSaver once you become eligible to receive New Zealand Superannuation – that’s currently 65 years of age – or after you’ve been a member of KiwiSaver for at least five years; whichever is the later of the two.
If you happen to join KiwiSaver after the age of 60, then you do need to remain a member for at least five years. Therefore, if you, say, joined when you were 63, you can’t withdraw your funds until you are 68.
Interviewer: Now I understand there are some circumstances where you can get the money out earlier than 65.
Liz: Yes, there are; there’s five circumstances in which you can withdraw funds early from KiwiSaver. They are:
Significant financial hardship;
First home withdrawal; or
Interviewer: Can you explain the rules around financial hardship withdrawals?
Liz: For significant financial hardship, you need to make an application to the Trustees of the KiwiSaver scheme that you’re in. The Trustees will assess your application on a case-by-case basis against the rules that are set out in the KiwiSaver Act. Now it’s possible for you to withdraw up to the full value of your KiwiSaver account - less any government contributions, which will remain in your account. And your account will remain open. The rules around significant financial hardship are very strict, and you will need to supply supporting documentation to show your financial hardship.
Interviewer: And what about serious illness withdrawal?
Liz: For serious illness, you also need to make an application to the Trustees of your KiwiSaver scheme. They will assess your application against the rules set out in the KiwiSaver Act. And it’s possible to withdraw the full value of your account, including all the government contributions. Again, with serious illness, you do need to supply supporting documentation; for example, a medical certificate from your doctor to show your illness.
Interviewer: What are the rules for permanent emigration withdrawals?
Liz: Once you’ve been living overseas for a minimum of 12 months, you can apply to withdraw your funds on the basis of permanent emigration.
[From 1 July 2013 you are no longer able to withdraw your KiwiSaver funds early if you have moved to live permanently in Australia.]
You will need to supply supporting documentation to show the date that you moved overseas; the fact that you’ve been living overseas during the last 12 months; and there’s also a statutory declaration for you to say that you have permanently emigrated from New Zealand. It’s possible to withdraw everything in your KiwiSaver account, except the member tax credits, and these are paid back to the IRD.
Interviewer: What about the first home withdrawal?
Liz: Once you’ve been a member of a KiwiSaver scheme or a complying fund for a minimum of three years, you can apply to withdraw the full balance of your account – excluding any government contributions – to go towards the purchase of your first home.
Interviewer: That’s different, isn’t it, from the first home subsidy?
Liz: Yes it is. There’s also a subsidy available from Housing New Zealand of up to $5,000 that you can apply for once you’ve been a member of KiwiSaver for at least three years.
[The Housing NZ subsidy offers $1,000 for each year you have contributed to KiwiSaver, up to a maximum of $5,000]
There are conditions that you must meet to qualify for these funds, such as your contribution rates, household incomes, and the purchase price. To make an application for the first home subsidy, you will need to apply directly to Housing New Zealand.
Interviewer: Now what happens when somebody dies, where does their KiwiSaver money go?
Liz: If someone passes away whilst they’re a member of KiwiSaver, the funds will be paid out to the estate of that person, and we will require things such as a certified death certificate, probate, letters of administration, and bank deposit slips. And the estate will receive the full value of the KiwiSaver account.
If you have a KiwiSaver account when you die, your account balance will be paid to your estate.