New tool to make KiwiSaver hardship process easier

A new online system is designed to streamline the application process for KiwiSaver hardship withdrawals.

Withdrawals from KiwiSaver on hardship grounds have soared in recent years, and some members have faced wait times of a month or more to receive their money.

The final decision about KiwiSaver withdrawals is made by the schemes' supervisors. One of them, Public Trust, has launched a new system to make it easier.

Its general manager of corporate trustee services, David Callanan, said the 58,000 applications last year was double the number of two years ago.

He said serious illness account closures increased 69 percent from 2022 to 2025.

Booster KiwiSaver Scheme was the first provider using the new online withdrawal application system, he said, followed by Koura. Four more providers would come on board in the next month, with the intention that the remainder of Public Trust's KiwiSaver provider clients would move to the system.

Callanan said the system would mean it could better keep up with "unprecedented" demand now and in the future.

People access the new portal via their KiwiSaver provider, and submit their application for the provider to review. It is then sent to the supervisor for the final decision.

"For the providers that are using the tool, we've already seen a speed-up in the turnaround time from members submitting the application through to payment. That's definitely one of the reasons we've made the investment to try and building some consistency but fundamentally to have a better experience for the member.

"Because the member has a better experience and knows all the questions to answer and is able to put everything in in a way that is really clear and easy for the provider and the supervisor it means every step of that process is smoother, more efficient and definitely more timely."

He said there had been a perception that some providers dealt with financial hardship applications more generously than others. "I don't think it's all that real … there's only three supervisors. You do have that consistency between the three of us and we connect regularly to make sure we're applying a consistent approach, applying the same rules, doing things like making the inflationary adjustments to payment amounts, things like that. Consistency has been something that broadly has been in place for a long time. But the consistency is more around the way that data or information is provided by the members, which mean that every other step can be more consistent."

Callanan said members could see they had answered all the required questions in the portal, and it means there had been a 50 percent reduction in the volume of interactions required per application.

"We're seeing we're not having to go back to them as often as we used to, whether that's the provider or the supervisor, and ask for that extra information."

He said open banking portal Akahu was embedded in the tool so that people could have information automatically added to their application. "The fact it comes together in one single place makes it much smoother and easier for the member to get all the information accurate upfront."

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