To be eligible, you need to have been a member of the Police Superannuation Scheme (PSS) for at least 3 years. If you’ve been a member of PSS for less than 3 years, you may still qualify if you have been a member of a KiwiSaver scheme or a complying superannuation fund for at least 3 years. Complying superannuation funds are employer-based schemes that can offer some KiwiSaver benefits because they comply with KiwiSaver rules.
Funds must be used towards the purchase of a home in New Zealand. They may be used to pay all or part of the deposit and/or for final settlement. You must intend to live in the home you are buying as your principal place of residence.
You must not have owned property before (except in limited circumstances – see ‘Previous home owners’ below). This includes bare land or a dwelling house on Māori land. You may apply for a withdrawal to buy a dwelling house on Māori land provided you include with your application evidence of your right to occupy the land, such as a licence to occupy or occupation order.
These eligibility criteria mirror the rules for the first-home withdrawal benefit available under the KiwiSaver Act 2006. They may change in future if these rules change.
If you are a member of KiwiSaver as well as PSS, you may be able to access funds from both schemes. You would need to make separate applications to each scheme. Your solicitor would then pool the funds for settlement.
Limits on withdrawal amounts
You will be able to access your savings in both your employer’s and member’s accounts less any processing fee and minimum to be retained under KiwiSaver rules (currently $1,000). However, if you have a charge registered against your account, the funds available may also be reduced (see 'Registered charges' below).
Funds will be withdrawn from your member’s account first with any remaining amount coming from your employer’s account.
If you have a charge registered against your account to the Police and Families Credit Union or another lender, the funds available may be reduced by an amount determined by the lender. A discharge of registered charge form will need to be completed and returned. This process can take up to 5 working days so it should be factored in to your timeframe.
If you wish, you can arrange for any outstanding loan to be paid to the Police and Families Credit Union or another lender as part of a first-home withdrawal. You need to ask your solicitor to provide the lender with a letter of undertaking confirming the balance of the loan will be paid from the solicitor’s trust account on settlement day. We suggest you contact the lender early in the process asking them to confirm:
- any specific wording that needs to be included in the letter of undertaking
- the outstanding balance of the loan.
An administration fee will be charged to your account if we consent to the application. Current fees are listed here.
Other benefits while in service
Applying for a first-home withdrawal doesn’t affect your eligibility for a partial withdrawal, in-service benefit or hardship benefit.
Applying for a first-home withdrawal
When the sale and purchase agreement has been signed, you need to complete a first-home withdrawal form and send it with accompanying documentation to Mercer. The documentation required includes:
- completed first-home withdrawal form, including statutory declaration
- a letter from your solicitor or conveyancing practitioner confirming the conditional/unconditional status of the offer (see page 5 of the form)
- a deposit slip for your solicitor’s or conveyancing practitioner’s trust account
- a copy of the sale and purchase agreement for the property you are purchasing (this should clearly show you as the purchaser)
- evidence of membership of a KiwiSaver scheme or complying superannuation fund (if you have been a member of PSS for less than 3 years).
Mercer needs to receive the documents at least 10 working days before the terms of settlement under the sale and purchase agreement. Mercer will process the application with a view to making payment before settlement. Payments will be made to the trust account of your solicitor or conveyancing practitioner, not to your own bank account. If the sale does not proceed, the payment made to your solicitor or conveyancing practitioner must be returned to Mercer. Mercer will credit the funds back to your accounts.
Previous home owners
You may make a withdrawal to purchase a home as a previous home owner if your financial position in terms of assets and liabilities is what would be expected of a person who has never owned a home. The application process is the same as for a first-home withdrawal with the following additional step.
You need to apply to Kāinga Ora to determine whether you are eligible under this category. Currently, the criteria are that you do not have realisable assets worth more than 20% of the house price cap for existing properties for the area you are buying in. For example, if you were buying a house in a $500,000 cap area, your realisable assets cannot be worth more than $100,000. Don't include your savings in PSS. PSS or KiwiSaver funds are not considered realisable assets.
The following are realisable assets:
- Money in bank accounts (including term deposits)
- Shares, stocks and bonds
- Building society shares
- Investments in banks or financial institutions
- Any money paid to or held by the real estate agent or solicitor as a deposit on a home.
- Boat or caravan (if the value is over $5,000)
- Other vehicles not being used as your usual method of transport, such as classic motorbikes or cars
- Other assets valued over $5,000.
If Kāinga Ora declines your application, it may still be worth applying for a previous home owner’s withdrawal. The trustees have some discretion if your application falls marginally outside Kāinga Ora’s criteria. In this case, contact Mercer with details of Kāinga Ora’s decision. Mercer will put your case forward to a subcommittee of directors and will notify you of its decision. Please do not commit to any purchase without confirmation from Kāinga Ora or the trustee that you are eligible to make a withdrawal as a previous home owner.