Source: Radio New Zealand
Rising cost of living is forcing many to withdrawal from KiwiSaver early. LDR / Alka Prasad
Some KiwiSaver members are waiting months for their hardship withdrawal applications to be processed, as providers struggle with the volume.
Withdrawals from the scheme for financial hardship reasons have increased significantly in recent years.
In February, 4750 people withdrew money because of hardship, up from 4130 in February 2025, but some members have complained about how long the process can take.
Some on social media have said they applied last month and still not had a response.
RNZ surveyed providers to ask how long they typically took.
The country’s biggest provider, ANZ, said it could take up to 20 working days.
“To work within this timeline, we do require the information requested,” a spokesperson said. “It may take longer, if there are public holidays or we need to ask for more information.”
On average, its processing time was within 20 days, even though applications were up 10 percent year-on-year.
Fisher Funds said generally guided clients to allow up to 30 working days for the whole process.
“That’s probably a fair indication of where we are at the moment. November and December were particularly busy, which we expected, and this continues with new challenges hitting the family budget.
“The biggest thing people can do to help is to be thorough in sending through all their supporting documents, as this can really help speed up the first part of the process.”
Koura KiwiSaver founder Rupert Carlyon said his team would typically respond within 2-3 days of receiving an application.
“The biggest issue is the back and forth with clients,” he said. “The problem is that we often need to go back multiple times with clients, which extends out the time frames.
“The applications are not easy and we need a huge amount of information, which is what typically takes the time.”
ASB said its timeframe was for processing within 15 days from when the full application was made.
“We understand delays can happen sometimes and this can add to an already stressful time. The most common reason for delays is due to customers providing incomplete information at the time of submitting their application, so we encourage our KiwiSaver customers who are considering making a hardship withdrawal request to ensure they are providing the most up-to-date and complete set of information and evidence possible.
“Our team can support them with this.”
Milford Asset Management did not want to comment.
DebtFix founder Christine Liggins – who helps several providers, including Milford, with their hardship applications – said applications were usually turned around in a couple of days, when all the information was provided.
Pie Funds chief executive Ana-Marie Lockyer advised people to allow up to 10 working days for a hardship application to be assessed from the point the information was provided.
“In most cases at the moment, applications are being processed within around five working days. Where delays do occur, they are typically due to incomplete information.
“Hardship applications require detailed supporting documentation to ensure the request meets regulatory requirements and sometimes clients need additional time to gather that information.
“We understand these situations can be stressful, so there is a strong focus on processing applications as quickly as possible, once everything needed has been provided.”
SBS Wealth said applications were generally paid out within 15 working days. Westpac said it took eight days to begin an application review.
“The timeline for reviews can vary, from a few days to a few weeks,” Kernel founder Dean Anderson said. “The delays are often due to gathering enough information from the client upfront in order to make an assessment.
“As an industry, we would love to see the centralisation of hardship assessments – ideally handled within WINZ. This would avoid inconsistent decisions and KiwiSaver members trying to shop around for an outcome.
“It would also ensure there is direct wider support, providing full wraparound to the individual to help them with potentially other more accessible avenues for financial support.”
While providers initially assess the application, the final decision is made by the scheme’s supervisor.
One provider, Public Trust, said people understandably wanted fast responses, when they were financially stressed.
“The application process can take time, because of the strict KiwiSaver rules in place and the continued high number of withdrawals providers are managing. We work closely with providers and know they’re working hard to reduce turnaround times.
“As supervisor, we’re involved at the end of the assessment process and, once applications reach us, we return a decision to the provider within a few days.”
ASB said it was worth considering whether a withdrawal was appropriate.
“We understand many Kiwis may be doing it tough at the moment and that applying for a KiwiSaver hardship withdrawal can play a part in managing a challenging financial situation. However, this should only be explored once other options have been weighed up.
“An early withdrawal can have a significant impact on the total KiwiSaver balance a customer will have available to them once they reach retirement. We encourage any customer who’s concerned about their financial situation to get in touch with us early, so we can explore all options with them.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
