KiwiSaver Q&A: Is it possible to get my money out of KiwiSaver earlier than 12 months if I'm moving?

By Amanda Morrall

Here's our latest KiwiSaver Q&A:

Q) Is there any other way to receive my KiwiSaver in less time than one year? For example, if I move to Australia and have extreme difficulty finding work? Would that count?

A) Just to review, the KiwiSaver Act allows for early access to your KiwiSavers funds on four grounds:

• Significantly Financial Hardship
• Serious illness
• First time home buying deposit
• Permanent emigration

With respect to the last one here, you obviously know already that you have to wait 12 months before your funds are released.

We had an earlier question come to us similar to yours and the response I received from Inland Revenue was that economic uncertainty related to a deliberate move overseas was insufficient reason to bypass the 12 month waiting period. That said, if you were determined to get at your money, and felt there was a genuine case of financial hardship, it would be the trustee overseeing your KiwiSaver provider who would decide that.

My understanding is that the test for proving significant financial hardship is fairly rigorous and you must front up with all manner of evidence (including a budget) to support the application. If you were successful in arguing your case, keep in mind that you won't get the entire pot of money sitting in your account. 

What you'll get on a successful significant financial hardship is the contributions paid by you and your employer, plus any gains made in the time you've been a member.

What you won't get, are the member tax credits paid into your KiwiSaver fund by Government during that time as well as the $1,000 kickstart. (See KiwiSaver website for details).

Under a straight forward case of permanent emigration you will receive the $1,000 kick-start, your contributions as well as your employers and any gains. Again you won't be eligible for the member tax credits. (See "How much can you withdraw moving overseas permanently" on IRD's KiwiSaver website).

Whether you could successfully make a case for permanent emigration drawing on a significant financial hardship argument to get at the money sooner than 12 months would depend on how the trustee hearing your case regards it. Inland Revenue officials earlier said it was unlikely.

Obviously, I don't know your personal situation but I sense a bit of desperation here. Whether you love or loathe KiwiSaver, it is a retirement savings vehicle, not a term deposit. As such it is designed to be hard to get out of.

Without wanting to fear monger, the more I hear about New Zealand Super, the less confident I am in its long term survival. If you plan on returning to New Zealand at some time, I wouldn't be banking on the NZS to see you through old age.

Retirement may seem like a foreign planet at this stage, if you are just starting out, but the years creep up very quickly. The earlier you start saving, the better off you'll be in the long-run -- whether it is through KiwiSaver or another saving platform is up to you. Knowledge is money so educate yourself about the choices available to you. Schedule an appointment with an Authorised Financial Adviser with your provider and put them to work.

In case you were unaware, under new a bi-lateral agreement with Australia, you can transport your KiwiSaver money with you and dump it into a comparable super fund. If you plan on working there, you'll be forced to pay into one anyways, this way you'll have a head start.

You can also leave your money here and make voluntary contributions where you can, if you wanted to.

The key thing is keeping tabs on its performance, how much you are paying in fees and how it is doing relative to its peers. You can get all of that on our website under the KiwiSaver section, so stay in touch. And good luck!