KiwiSaver and Relationship Property

KiwiSaver balances have become significant assets for many New Zealanders. When relationships end, questions arise about whether and how KiwiSaver is divided. The rules are clearer than some people expect, but understanding them helps you plan appropriately.

Relationship property law treats KiwiSaver differently from other assets, and the timing of contributions matters.

The General Rule

KiwiSaver contributions made during a relationship are generally considered relationship property. This means they may be subject to division if the relationship ends, just like other assets accumulated during the relationship.

Contributions made before the relationship began remain separate property. The growth on pre-relationship contributions during the relationship may also be treated differently depending on circumstances.

This distinction makes the timing of relationship formation and contributions important for understanding what might be divided.

De Facto And Married Couples

The Property (Relationships) Act applies to both married couples and de facto relationships of three years or more. Shorter de facto relationships may also be covered if there are children or significant contributions.

For covered relationships, KiwiSaver accumulated during the relationship is treated similarly to other relationship property. Equal division is the starting point, though circumstances can vary outcomes.

If you are in a shorter relationship or your circumstances are unusual, the rules become more complex and professional advice is valuable.

Valuing KiwiSaver On Separation

Valuing KiwiSaver for relationship property purposes is straightforward. Your balance on the relevant date, typically when you separated, establishes the value.

Unlike property that needs valuation, KiwiSaver balances are clear from provider statements. This simplifies the calculation compared to other assets.

Changes in balance after separation due to market movements are generally not included in relationship property calculations.

Division Without Withdrawal

KiwiSaver cannot be physically divided without meeting withdrawal criteria. You cannot withdraw to give your partner their share unless you qualify for first home, hardship, or retirement withdrawal.

Instead, KiwiSaver is often offset against other relationship property. If one partner keeps $50,000 in KiwiSaver, the other might receive equivalent value in other assets like cash or property equity.

This offsetting approach means you do not actually lose your KiwiSaver, but its value is accounted for in the overall property division.

Contracting Out Agreements

Couples can agree to treat KiwiSaver differently from the default rules. Contracting out agreements, sometimes called prenuptial or relationship property agreements, can specify how KiwiSaver is treated.

These agreements require independent legal advice for each partner to be valid. They can specify that KiwiSaver remains individual property or is treated in particular ways on separation.

Consider whether such an agreement makes sense for your situation, particularly if one partner has significantly more KiwiSaver than the other.

Employer And Government Contributions

Employer and government contributions made during the relationship are generally treated the same as your personal contributions. They form part of relationship property accumulated during the relationship.

The total balance, including all contribution sources plus investment returns, is what is considered for division purposes.

This can be surprising if one partner assumed their employer contributions remained theirs. The law treats all sources similarly.

Protecting Your Interests

Keep records of your KiwiSaver balance at the start of significant relationships. This helps establish what was pre-relationship property if division becomes necessary later.

Consider a contracting out agreement if you have significant pre-relationship KiwiSaver or expect substantial contributions. Legal advice helps determine if this is appropriate for your circumstances.

Communicate with your partner about your combined financial picture. Understanding each others KiwiSaver situations helps you plan together and avoid surprises.

Seeking Professional Advice

Relationship property is complex and KiwiSaver adds another layer. If your relationship is ending, or if you want to plan ahead, seek legal advice specific to your situation.

A family lawyer can explain how the law applies to your circumstances and help you understand your options. Early advice often leads to better outcomes.

Financial advisers can help you understand the ongoing implications for your retirement planning after any division of assets.