Managing KiwiSaver Amid a Separation

Relationship separations can bring about a myriad of financial considerations, and understanding what happens to KiwiSaver funds is crucial for those involved.

You may think of your KiwiSaver as your own.  However, KiwiSaver (or any other superannuation scheme(s)) are considered relationship property under the Property (Relationships) Act 1976 and any KiwiSaver funds accumulated during the course of a relationship are typically eligible for division upon separation, similar to other shared assets such as property and savings.  This means if you opened your KiwiSaver account after entering the relationship, the entire balance can be considered relationship property.  If your KiwiSaver predates the relationship, only the portion accrued during the relationship is counted as relationship property, subject to some exceptions if you make a withdrawal during the relationship.  Any contributions made after the relationship ends is generally separate property.

The reason for this is that income earned during a relationship is considered relationship property.  KiwiSaver contributions are taken from income.

When it comes to dividing KiwiSaver funds, the relationship property balances are taken into consideration along with the other relationship property, and there is generally a “wash up payment” from one party to the other to account for the fact one party generally retains more of the asses than the other.  If the payment cannot be made, and the KiwiSaver funds are required to enable the payment, then it is possible to make an application to the Court to withdraw the KiwiSaver to pay the ex-partner their share.  The application is simple, but the financial considerations of such a withdrawal should be considered, and advice from a registered financial advisor should be sought where possible.

In the case of a separation, individuals may still be eligible to make a first-home withdrawal from their KiwiSaver account, provided they meet the necessary criteria.  This option can provide a valuable opportunity for individuals to secure housing amidst the upheaval of a separation.

For many people, KiwiSaver represents a significant portion (if not entirety) of their retirement savings.  Consequently, the division of these funds in the event of a separation can have a substantial impact on future financial security and it is essential to consider the long-term implications of any division agreement.  We specialise in relationship property which enables us to assist you to navigate these stressful and challenging times and provide you with expert guidance and support. 

This article is intended for informational purposes only and should not replace specific advice.  For personalised advice on all relationship property issues please contact us.

This article was accurate at the time of publishing.