Bank on firm ground to reject application for early release of KiwiSaver funds

Categories:

Kiwisaver, Bank decisions,

Summary:

In August 2024, Jamal applied to the bank for the early withdrawal of his KiwiSaver on the grounds he had permanently emigrated from New Zealand to Fiji. The bank declined the application the following month because Jamal had not been living outside New Zealand for the previous 12 months. (He had been in New Zealand since October 2023.) He said he had previously been outside New Zealand for more than 12 months. He said the KiwiSaver Act 2006 did not require him to be outside New Zealand at the time of his application. He also said he had no option but to return to New Zealand because he was summoned for jury duty in October 2023. He said the bank unnecessarily required evidence of his return trip to Fiji, forcing him to buy a flight ticket, and he wanted the bank to compensate him for the cost of the ticket, as well as approve his application and release his KiwiSaver funds.

Published:

May 2025

Our investigation

We found the bank did not make any error or breach any obligation in processing his application. KiwiSaver scheme rules require a member to submit, among other things, “proof of the member’s departure from New Zealand”, which includes evidence of confirmed travel arrangements. Given Jamal had given the bank a statutory declaration saying he had permanently moved from New Zealand and did not intend to return, it was reasonable for the bank to assume Jamal was residing in Fiji. Requesting a copy of evidence of a return trip to Fiji was part of the mandatory evidence requirement.

As for the bank’s decision to reject his application, KiwiSaver members can apply to withdraw their KiwiSaver if they emigrate permanently. Jamal returned to New Zealand for jury duty In October 2023, but remained until at least August 2024 – almost a year later. In those circumstances, he no longer met the permanent emigration requirements of the legislation. Jamal said he returned to New Zealand to avoid penalties for failing to respond to jury duty, but this did not explain his need to be in New Zealand for almost a year. Besides, he could have applied to be excused from jury duty on the ground he lived outside the jury district.