New Zealand KiwiSaver: taking a savings suspension

A KiwiSaver savings suspension pauses future deductions, while significant financial hardship withdrawals concern savings already held.

Ordinary suspension eligibility

Contributed and been a member for 12 months or moreInland Revenue, taking a savings break

Ordinary suspension length

3 months to 1 yearInland Revenue, taking a savings break

Early suspension default period

3 months; up to 1 year depending on circumstancesInland Revenue, taking a savings break

Employer contributions during suspension

Not received unless the employment agreement says otherwiseInland Revenue, taking a savings break

After the first year

Employees who have contributed and been KiwiSaver members for 12 months or more can take a savings suspension lasting 3 months to 1 year. Inland Revenue does not require a reason. There is no limit on the number of suspensions, and they can run back-to-back. Contributions can restart or stop during a suspension, but an employer's agreement is needed for a change within 3 months of the previous change. Inland Revenue, taking a savings break (opens in a new tab).

An early suspension requires hardship evidence

Before a year of membership, an early savings suspension can be requested after making a contribution if the member is experiencing, or likely to experience, financial hardship. Inland Revenue requires evidence of hardship for reasons outside the member's control; an application may not be accepted where circumstances changed for reasons within their control. The default period is 3 months, with up to 1 year possible depending on the circumstances. Inland Revenue, taking a savings break (opens in a new tab).

Employer contributions and notices

During a suspension, employer contributions are not received unless the employment agreement states otherwise. Voluntary payments may be needed to receive a government contribution. A person changing jobs needs to show the new employer the suspension notice. Without that notice, deductions are required until a replacement letter is obtained from Inland Revenue; those deductions are not automatically refunded. Inland Revenue, taking a savings break (opens in a new tab).

The suspension begins on the date Inland Revenue approves the request. Its notice gives the start and end dates. Near the end, Inland Revenue sends a reminder; if another suspension is not requested, it asks the employer to restart deductions. Inland Revenue, applying for a savings suspension (opens in a new tab).

Withdrawal is a separate application

Inland Revenue says a hardship withdrawal requires evidence of significant financial hardship. An accepted application permits withdrawal of the member's and employer's contributions only. It separately says stopping further salary or wage contributions requires a savings suspension, available within the first 12 months on hardship grounds and afterwards regardless of financial situation. Inland Revenue, significant financial hardship withdrawals (opens in a new tab).

Scheme providers administer withdrawals and have the primary relationship with members. Inland Revenue collects employer-remitted contributions and forwards them to providers. When members change providers, the providers transfer accumulated savings and information including whether the member is on a savings suspension. Inland Revenue, KiwiSaver for scheme providers (opens in a new tab).

Scope of this explanation

This guide focuses on pausing future contributions and distinguishing that process from access to existing savings. It is general information and does not decide hardship, assess an employment agreement or approve a withdrawal. No suspension or withdrawal calculator, projected account balance or worked example is provided. The related early-access guide covers withdrawal grounds in more detail; this guide does not assess first-home access.

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