Significant financial hardship application goes missing

When Jahan discovered that his home was a leaky building with black mould, threatening the health of his family, he had no option but to have his home fixed. Jahan had saved enough money to pay for the repair but did not want to use all his savings. Jahan remembered he had money in his KiwiSaver and considered it would be reasonable for his KiwiSaver provider to release the balance of his KiwiSaver fund, $30,000, to contribute to the repair cost. Jahan called his KiwiSaver provider, a bank, and confirmed over the telephone that this would fall within the scope of eligible withdrawals.

Jahan completed the significant financial hardship withdrawal application form and submitted it to his bank. Unfortunately, the form was incomplete, and not properly witnessed. The bank came back to Jahan asking for more information, including overdue bills, and advising that the application needed to be witnessed by a Justice of the Peace.

At around this time, New Zealand was about to go into lockdown as a result of the Covid-19 pandemic. Jahan decided that his family would need to move out of the family home, due to the black mould. Jahan was able to find a rental at short notice and negotiated a competitive rent, but the landlord would not budge on a six-month term.

Jahan was so busy moving that he did not manage to finalise the application and have it correctly witnessed before lockdown. When the country returned to alert level 3, Jahan delivered the completed application form, properly witnessed, to a bank branch.

By this time, Jahan’s financial situation was much worse. Jahan had used all his savings to pay for the now completed house repairs and his business had been adversely affected by the lockdown. In addition, Jahan was paying rent and mortgage payments because he had signed a six-month tenancy agreement and was having difficulty finding a tenant for his, now repaired, home. Jahan’s budget was in deficit and he was continuing to wait for a decision on the resubmitted application.

Jahan complained that the KiwiSaver fund supervisor was taking too long to assess the application. We referred the complaint to the supervisor’s internal complaints process. Jahan said that the supervisor was refusing to take the application further until he provided proof of overdue bills. Jahan was unable to do this because he did not yet have any overdue because he did not yet have any overdue bills. The supervisor and Jahan were at an impasse, and Jahan referred his complaint to FSCL.



Jahan said that he had resubmitted the application, properly witnessed, at a particular bank branch on the first Saturday after level 4 lockdown ended. Jahan said that he had spoken to a male staff member who had accepted the application and assured him it would reach the correct place.

The supervisor said that neither they, nor the bank, had received the application and there was nothing more they could do to help. The supervisor referred Jahan back to the bank to start the application process again.

By this stage Jahan told us that he was under the care of a mental health team. He was finding the stress of finding a tenant for his home, as well as the financial difficulty caused by Covid-19, very difficult to deal with. Jahan said that he did not want to deal with the bank again, they had been unhelpful and had lost his application.



It seemed to us that the most important thing was to get the significant financial hardship withdrawal application in front of the supervisor as quickly as possible. We arranged a video call between Jahan and the supervisor. Jahan explained his financial situation, and the supervisor set out the information they would need to assess the application.

Jahan collected the information and sent it directly to the supervisor without involving the bank.



The supervisor assessed the information and agreed that Jahan’s budget was in deficit and released enough money to relieve his significant financial hardship for the next 13 weeks. Jahan was greatly relieved and discontinued his complaint.


Insights for or participants

When someone is under considerable financial and emotional stress, it is sometimes necessary to depart from the usual process. Although the usual process for the supervisor was to require all contact with the applicant to be through the bank, in this case Jahan no longer trusted the bank. By Jahan and the supervisor speaking directly to one another, the process could be streamlined avoiding additional stress.

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