Kiwisaver: Shelley Hanna says withdrawals are hard to access

Taking money out of your KiwiSaver now may severely impact your quality of life in retirement.

I am a Kiwi living in Australia. I was stood down from my role of technology manager for a large travel company last week. I am desperate to access my KiwiSaver with ANZ in New Zealand. I moved here five years ago and have a mortgage with my partner. She has been looking after our baby daughter while I've been working. Now with no income I am trying to make a significant hardship withdrawal to access my KiwiSaver funds. This is still a very difficult process. Is there any talk of the NZ Government making it easier to access KiwiSaver during this Covid-19 crisis? Could the NZ Government at least make it easier for Kiwis living overseas to access this given we do not have other financial support? Do you know any way to fast-track a hardship application?

New Zealanders living in Australia are in a difficult situation as many do not have access to social welfare benefits. Right now you will be in shock and worried about how you are going to manage over the next few weeks and months.

Making a Significant Financial Hardship withdrawal from your KiwiSaver is one option for you, but you should investigate all other options first.

Taking money out of your KiwiSaver now may severely impact your quality of life in retirement. Also, the same crisis that has led to the loss of your job has also caused sharemarket falls.

For most people, this means their KiwiSaver is worth less now that it was two months ago.

Making a withdrawal at this time is a bit like trying to sell your house right now. Markets have been disrupted and you won't get what you may have got just a few months ago. Ideally you should sit tight and wait for a recovery.

Have you talked to your bank about your situation? They may be able to reduce your mortgage payments or give you a break for a set time. While this will increase the amount you owe, it will give you breathing space. Then go through your other debts, contact your creditors and see if you can reduce your obligations and repayments at this time. Analyse your budget and stop all non-essential spending.

Your financial problems won't be solved by the end of lockdown, as you are without work. Have you looked for alternative employment? If you go on to a job website in your region and put 'essential service' as a key word you will see jobs currently available. Being proactive will help you feel more in control of your situation.

If you have exhausted all other options and decide to put in an application for a Significant Financial Hardship withdrawal, download the form from your provider's website and complete it in full. Scan or post it back to them. You will need to show that you've exhausted all reasonable alternative sources of funds. The amount you withdraw is decided by the trustee and will be limited to a specific amount to meet your hardship requirements.

Up until now all applications have needed to be signed as a statutory declaration before a Justice of the Peace or similar — but this is not possible under lockdown. Recently it was announced that KiwiSaver providers, supervisors and industry groups have been co-operating to establish simplified processes for hardship withdrawals, in particular alternatives to normal levels of verification. Contact your provider ANZ for more information.

The criteria and application requirements are the same irrespective of where you live. Because Covid-19 is a global crisis, it should not be difficult to convince the trustees of your needs and that you are in this situation through no fault of your own.

Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 06 870 3838 or go to peak.net.nz. The information contained in this article is of a general nature and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz