More and more people are applying to release their KiwiSaver funds as the cost of living and the aftermath of extreme weather events hit hard.
In March, 3000 people withdrew funds - almost double the number in January, and for the first time on par with those using their savings as a deposit for a first home. A fifth of all applications were for weather-related expenses.
But many more were turned down.
Anyone who feels their KiwiSaver supervisor has unfairly declined a hardship application can bring their complaint to Financial Services Complaints Limited (FSCL), a free service.
Financial ombudsman and Financial Services chief executive Financial Services told Checkpoint on Monday there was a high bar to cross to get approval for a withdrawal due to hardship.
"We've recently issued a guide to help consumers understand what they may need to be able to show in order to get their money out early, and what other methods they should perhaps explore before applying for their KiwiSaver funds."
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Taylor said applicants would be expected to have hit "rock bottom", having exhausted all other avenues, before trying to get their KiwiSaver early.
"They have to basically show they are no longer able to meet their basic living expenses. So for example, if they were having trouble paying their mortgage or a loan, and a bank or lender is threatening to take mortgagee sale action or debt recovery action; or they're just not able to provide the basic necessities for themselves and their families.
"They do also often have to show they have explored other means of finance before they reach out to the KiwiSaver provider. For example, we've had a few cases where people have got other assets, perhaps an investment property. They could look at selling in order to relieve their financial hardship, rather than tapping into their KiwiSaver."
Providers would then typically only look at releasing enough to get them through the next few months, she said.
So before applying, Taylor said people should seek advice.
"[Talk] to their bank or their lender if they think they're in trouble paying the next loan payment. The earlier they speak to the lender, the more likely the lender is going to be able to help them and put a hardship package into place for them."
And if they still decline, the FSCL might be able to help. In a release earlier on Monday, it outlined one case where it agreed with the supervisor's decision not to release funds.
A solo mother applied to get her KiwiSaver money to clear a debt on a car so it would not be repossessed. But the law does not allow funds to be withdrawn for that.
"Although the supervisor did not release the funds that Tina wanted, they were prepared to release some funds to assist Tina to buy her daughter a school uniform and to fix her broken washing machine," Taylor said.
"Because Tina's budget was in surplus and the act does not allow the supervisor to release money to repay a debt, we were satisfied the supervisor had not made a mistake when assessing Tina's application. We told Tina that we were unable to ask the supervisor to reconsider her application."