Q: A family member used KiwiSaver to pay back money he stole from his employer. He was convicted of theft and was able to access his KiwiSaver to contribute to the more than $10,000 he had stolen. He was living at home with his parents and was by no means in any hardship. How can he use it for this but families in crisis can't? Amanda Morrall of new KiwiSaver provider Simplicity says the rules for accessing KiwiSaver funds under a hardship claim are normally very strict, as for other conditions for early withdrawal.
A: "The scheme is primarily a retirement savings vehicle and as such the funds are meant to be locked up until 65.
"There are, however, allowances for early withdrawal and hardship is one of them."
Hardship is defined as not being able to meet your living expenses, and rent or mortgage payments. Serious illness and paying funeral expenses for a family member and medical expenses for a loved one also count. "It's not your KiwiSaver provider that makes the call but rather an independent trustee," says Morrall.
Every KiwiSaver provider has an independent trustee - known as a supervisor - licensed by the Financial Markets Authority.