We made a KiwiSaver withdrawal application last month because of financial hardship but it was declined. We have two children aged 8 and 3 and I'm expecting again. We don't fit in our small car but are struggling to buy another as well as pay the mortgage. We also have loans to repay. We have been told we need to write a letter to ask for reassessment of our application.

More than 8000 people dipped into their KiwiSaver last year to get through a financial tough spot.

The fund's trustee makes the call. He or she is responsible for ensuring KiwiSaver money is managed for the long-term benefit of members.

Vanja Thomas, senior relationship manager in corporate client services with Guardian Trust, explains what a trustee considers. "


The KiwiSaver early withdrawal grounds are limited because the purpose of the scheme is to encourage a long-term savings habit and asset accumulation for New Zealanders.

"We understand that sometimes members need to access funds earlier but we work within strict legislative parameters.

"The trustee can approve funds being released from KiwiSaver to buy a vehicle in limited circumstances.

"In this situation, if the member is, or is likely to be, in significant financial hardship and also provides sufficient evidence to show their vehicle needs to be replaced by a larger vehicle to accommodate a growing family, the trustee may approve a limited amount of funds being released for that purpose.

"They are also required to show they have explored and exhausted all reasonable alternative sources of funding.

That is, that they couldn't use funding other than KiwiSaver to buy the larger car. This is to protect the funds for retirement.

"For hardship applications to be considered, detailed financial information is required from the applicant showing all income and outgoings, including bank statements, bills and related documents," Thomas says.

That this application was declined could suggest that, based on the information provided, you are meeting minimum living expenses and don't otherwise meet the restrictive statutory test of significant hardship.


An application is based on the entire household income and expenditure. You can ask your KiwiSaver provider to have the application reviewed.

The provider will also help if you are still not happy after the review by contacting the trustee and the dispute resolution provider.