I have a couple of friends working through the process of separating from their long-term partner. Are they right in thinking they are able to lay a claim to half of a KiwiSaver or retirement fund balance because their partner was contributing to the scheme while we were together?
The answer is yes.
KiwiSaver funds are relationship property, and up for division in a split when they are acquired during your de facto relationship or marriage. This is the case irrespective of whether the funds came from individual, government or employer contributions.
However, the portion of your KiwiSaver that was acquired before your de facto relationship or marriage started is protected. This is treated as separate property. This means that only the portion of your KiwiSaver that arises from contributions during the relationship/marriage will be divided equally between you and your spouse as relationship property.
For example, if Tom and Mary separate and sell their family home, Tom may take a lesser share of the sale proceeds for the home but keep his KiwiSaver while Mary takes a higher share of the sale proceeds to compensate her for her interest in Tom’s KiwiSaver.
If that is not possible, a court order can be sought to direct that the KiwiSaver scheme pay out a portion of the balance to the former spouse.
Remember that KiwiSaver comes with unique complications. Accessing the money immediately is not usually possible, as it may be ‘under lockdown’ until someone turns 65.
Divorce or separation can be a very costly and emotionally draining exercise if your split is not amicable. Unfortunately, this is mostly out of your control!
Debra Halton is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A Disclosure Statement is available free of charge upon request.