This article was published on 19 November 2011. Some information may be out of date.


  • The “who and how” of KiwiSaver withdrawals before retirement — including what happens if you go bankrupt
  • Was the recent advice on tax for buskers correct, or is their income donations?
  • Two readers suggest a short-term approach to employment for 60ish couple made redundant
  • Meaningful Christmas gifts

QI am 28. I have been watching my KiwiSaver fund grow since day one.

I know I cannot access any of the money until I’m 65, but can anyone else? If I become bankrupt, or the like, can the money be taken from me to pay debts? Or is it a fund that will see me through hell and highwater and be there in 2048?

AIf you’re lucky in love, money and health, and you don’t choose to withdraw money in some other circumstances, it should all be there waiting to finance your cruisy retirement.

However, there are several circumstances in which you or others can take money out of your KiwiSaver account before you reach NZ Super age — which is likely to be older than 65 by the time you get there, but that’s another story.

You can withdraw some or all of the money to buy a first home if you don’t already own one; if you suffer significant financial hardship or serious illness; or if you leave New Zealand permanently.

If your marriage or similar relationship breaks up, your KiwiSaver account is treated like other savings. The money is relationship property to the extent it was contributed during the relationship. A court may order some or possibly all of your KiwiSaver money to be transferred to your former partner, or your partner may get more other assets to offset your KiwiSaver account.

And when you die, at whatever age, your KiwiSaver money goes to your estate. It’s available to your heirs at that time. If you are under NZ Super age when you die, they don’t have to wait until you would have reached that age.

But the issue that’s clearly worrying you is bankruptcy. If you go bankrupt, the Official Assignee (OA) — who administers bankruptcy — will use your KiwiSaver money to repay your creditors, says Robyn Cox of the Ministry of Economic Development’s Insolvency and Trustee Service.

Recently, there’s been disagreement between the Service and some KiwiSaver providers over whether the money is available for creditors right away or if they have to wait until the KiwiSaver member reaches NZ Super age. The issue may be tested in court, says Cox. “We need to clarify it for the sake of bankrupts and creditors.”

But that wouldn’t make a lot of difference to you. The money in your account would be set aside to pay others sooner or later.

However, after you are discharged from bankruptcy — usually three years after you are declared bankrupt — you get a fresh start. You can contribute new money to KiwiSaver that is all yours in retirement — unless, of course, you go bankrupt again.

Note that the OA treats money in KiwiSaver no differently from other savings, whether in shares, property or anywhere else. They’re all fair game to repay creditors. So this is no reason to put you off KiwiSaver.

QRegarding the busker who supposedly has to return tax on the proceeds — as reported in your column two weeks ago — we received advice from the IRD around a similar issue, about window washers who take donations.

The IRD advised that because there is no contract between the parties, and the paying party can give as much as they like, proceeds from window washing were considered donations and therefore not taxable. Similarly, if I sit on the side of the street with nothing but an upturned hat and “$ please” sign, no proceeds from that activity would be considered income. I don’t see how the addition of a guitar would change matters.

A clarification would be nice, as this would not be the first time I’d heard two representatives from the IRD give seemingly conflicting advice.

AA department spokesperson replies, “We can’t comment on the advice your reader says they received from Inland Revenue because we don’t know the particular circumstances that led to that enquiry.

“However, Inland Revenue is of the view that if a person receives money for performing a service — even if the amount to be paid is not agreed between the parties — that is not a donation. That would still be the case even if a payment was voluntarily made. If the payment arises as a consequence of services that have been performed then it will likely be income for the recipient.”

That seems fair to me. Window washers and buskers use the same government services as the rest of us. And I know of at least one busker who made way more than most of us one Christmas season.

If you are relying on advice to the contrary, I hope you have it documented.

QI couldn’t help empathising with the author of last week’s letter with the heading, “Sixty-something couple seen as ‘past use-by date’ by employers”.

We are of a similar age and have been in a similar situation. When my husband found himself unemployed he sought short-term contract work obtained through networking in the industry. This eventually led to a full-time job, which he is very happy with. This has enabled me to remain in my low-paid but enjoyable job.

A friend in a similar boat managed to gain a full-time position through short-term consultancy work. I guess these options gave employers a chance to assess one’s suitability before making a commitment.

AGood idea. And our next letter suggests another way to enter the short-term employment field.

QPerhaps my brief story may help your sixty-something couple and others. I was made redundant at 57 years old. My background was intermediate accounting and admin and HR management.

I registered with a temp agency (only one) and passed their tests and ticked as many boxes of job skills that I felt I could honestly do. I subsequently got several assignments, one lasting nine months, before one client offered me a full-time position. A fee was negotiated with the agency and my “new” employer.

I was only ever out of work between assignments for a few days. I never turned down any job. I took an MYOB course to cement my small business accounting processes.

I will never be afraid of redundancy again. I have also since bought a stand-alone franchise business, and I have a manager running it. I also do several other part-time assignments for the temp agency (out of normal business hours, which keeps me in good with the agency). I am also involved with several charities as an office holder.

I have since been widowed. I have a small home with a mortgage (forced to trade down as a consequence of redundancy). I am a fan of KiwiSaver and have encouraged others to join up. Life is very busy but great, and I don’t see myself retiring any time soon.

AA great happy ending.

Yours and the previous letter are just two of more than 20 responses to my request last week for advice for the couple. It’s been heart warming. Thanks to everyone who has taken the trouble to write.

Some of the responses are simply too long to publish. One thoughtful letter, from a man in India who reads the column online, would more than fill this column all on its own. But over the next few weeks, we will publish part of his letter, and many others.

There were, however, some responses aimed specifically at the couple — in some cases offering them possible work — that I’ve forwarded directly to them. A taste of what they said:

  • “We employ a modest team of people in our hotel and property business in central Auckland. All but one are under 35. Our businesses are doing well but like many businesses today we face many challenges. Mature people (like me) are not always as versatile but offer valuable experience and problem solving skills.”
  • “Although I am not hiring right now I may be in a position to hire again in the near future, and considering his qualifications and experience he could be a possible candidate.”
  • “I am making no promises, but I have had a reasonable level of success” in human resource management services.
  • “I might just have a contract role coming up that might assist this gentleman — integrity, flexibility, an Engineering/HR background and lots of grey hair would be a real plus.”

Fingers crossed that one of these leads, or another idea from a reader, will do the trick.


Many charities offer Christmas gift programmes. Through these, you buy items for people in need that are given on behalf of your family or friends. For example, you might donate money for school equipment for children in developing countries. You receive an acknowledgement to give to your relative or friend to show them what they have “donated” to the children.

It makes a great Christmas gift — more meaningful than buying stuff that is often not wanted.

The following take part in these programmes. I’ve asked each one to “sell” their programme in 20 words or less:

  • Caritas Aotearoa New Zealand: 0800 22 10 22 or “Caritas Gifts — after Christmas when the excitement is over the gift you gave will still be changing lives!”
  • ChildFund New Zealand: 0800 223 111 or “Purchase ChildFund’s celebrity-authored book teaching Kiwi children the joys of alternative gift-giving, browse the range of life-changing gifts on offer.”
  • Christian World Service: 0800 747 372 or “Change overseas lives for the better. Choose from chickens, goats, water, gardens and more. It’s simple, fun and it works.”
  • Leprosy Mission New Zealand: 0800 862 873 or “Our vision is a world without leprosy. Really Good Gifts will help people to break free from leprosy — for good.”
  • MEND: 027 329 8368 or 09 407 8395 or “MEND helps disabled persons in developing countries become mobile, healthy, employable and independent to achieve dignity in their communities.”
  • Oxfam: 0800 600 700 or “Change the present, change a future. For fun-tastic gifts that really make a difference, check out Oxfam Unwrapped.”
  • TEAR Fund: 0800 800 777 or “TEAR Fund’s gift items transform the lives of the poorest by providing essential education, healthcare, water and other needs.”
  • The Fred Hollows Foundation: 0800 227 229 or “For $25 you can give a beautiful Miracle of Sight card and help restore sight to someone in the Pacific.”
  • UNICEF: 0800 537 739 or “Your Inspired Gift is guaranteed to reach children — and UNICEF will let you know where it’s changing a child’s life.”

No paywalls or ads — just generous people like you. All Kiwis deserve accurate, unbiased financial guidance. So let’s keep it free. Can you help? Every bit makes a difference.

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to [email protected] or click here. Letters should not exceed 200 words. We won’t publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.