By Mike Bain\/cvnznews.com<\/p>\n\n\n\n
New Zealanders receiving a benefit are being urged to think carefully before tapping their KiwiSaver for financial hardship, with officials warning that withdrawals can unintentionally affect entitlements.<\/p>\n\n\n\n
The Ministry of Social Development (MSD) says many people don\u2019t realise that once money is taken out of KiwiSaver, it is treated like any other cash asset \u2014 and in some cases, as income. That can influence payments such as the Accommodation Supplement or Temporary Additional Support.<\/p>\n\n\n\n
Graham Allpress, MSD\u2019s group general manager of client service delivery, said the impact varies from person to person, but anyone considering a hardship withdrawal should check first.<\/p>\n\n\n\n
\u201cA one\u2011off KiwiSaver withdrawal is generally not treated as income for benefit purposes,\u201d he said. \u201cHowever, if someone makes regular or scheduled withdrawals \u2014 for example every three months \u2014 those payments could be considered income under the Social Security Act.\u201d<\/p>\n\n\n\n
The Act defines income as any periodical payment from any source<\/strong>, even if the payment comes from capital. Allpress said the withdrawn funds also become a cash asset<\/strong>, which can reduce eligibility for certain supports. \u201cThe amount someone can withdraw before it affects their benefit depends on their other income and the assets they already hold.\u201d<\/p>\n\n\n\n Hardship withdrawals have surged. In March alone, more than $49 million<\/strong> was withdrawn by 5610 people<\/strong>, higher than the same month last year. Over the year to March, more than 60,000<\/strong> hardship withdrawals were approved \u2014 around triple pre\u2011pandemic levels.<\/p>\n\n\n\n Financial commentator Ana\u2011Marie Lockyer said the rules often catch people off guard. \u201cIt\u2019s not a KiwiSaver rule \u2014 it\u2019s how the benefit system works. Once the money is out, it\u2019s treated like any other asset. People don\u2019t naturally think of their KiwiSaver that way, and that\u2019s where the disconnect happens.\u201d<\/p>\n\n\n\n She said the biggest risk is for people making regular or staged withdrawals<\/strong>, especially those receiving accommodation support. \u201cWhat feels like sensible budgeting can unintentionally reduce entitlements. KiwiSaver decisions never happen in isolation.\u201d<\/p>\n\n\n\n MSD is encouraging people to contact the ministry before withdrawing to check whether other assistance is available. \u201cThere may be support options that don\u2019t require touching KiwiSaver,\u201d Allpress said.<\/p>\n","protected":false},"excerpt":{"rendered":" By Mike Bain\/cvnznews.com New Zealanders receiving a benefit are being urged to think carefully before tapping their KiwiSaver for financial hardship, with officials warning that withdrawals can unintentionally affect entitlements. The Ministry of Social Development (MSD) says many people don\u2019t realise that once money is taken out of KiwiSaver, it is treated like any other<\/p>\n","protected":false},"author":1,"featured_media":12308,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[41],"tags":[1051,796,113],"coauthors":[709],"class_list":{"0":"post-12307","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-new-zealand","8":"tag-economics","9":"tag-kiwisaver","10":"tag-new-zealand"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/cvnznews.com\/wp-content\/uploads\/2026\/04\/Kiwi-saver.avif","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/posts\/12307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12307"}],"version-history":[{"count":1,"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/posts\/12307\/revisions"}],"predecessor-version":[{"id":12309,"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/posts\/12307\/revisions\/12309"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=\/wp\/v2\/media\/12308"}],"wp:attachment":[{"href":"https:\/\/cvnznews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12307"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/cvnznews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcoauthors&post=12307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}