What happens to your money when your relationship ends? It’s something most of us don’t want to think about.

But if it does happen, it could have a massive effect on your future.

If you’re married or in a de-facto relationship and you decide to part, all money or assets you’ve accumulated during the relationship could be split 50:50.

It’s called ‘relationship property’, and it’s part of New Zealand law.

Yes, the KiwiSaver money you’ve saved over the course of your relationship, including what your employer and the government has put in, could be divided. Your ex-partner could get half.

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You could get a shock

Some people are shocked to find their KiwiSaver money will be divided up, Auckland divorce lawyer Jeremy Sutton says.

“For people in their 50s and 60s, their KiwiSaver money might be their second-biggest asset, after the family or holiday home.”

Sutton says people who’ve been employed in senior jobs for a long time can have very large KiwiSaver balances.

“So, when it comes to the final settlement, they might have to give up half of that. They can feel a bit aggrieved.” 

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Juliet Moses, a partner at TGT Legal, says while KiwiSaver is still relatively new, there’s still a lot of money going into accounts every year. 

“A lot of people will be relying on that as their nest-egg for when they retire. If, all of a sudden, it’s halved, that’s going to have pretty major impact.”

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How do you settle it?

All KiwiSaver money becomes part of the ‘pool’ of money and assets to be divided up when a relationship ends, Moses explains.

“Even though it’s in one person’s name, it’s still relationship property,” she says.

But any money in your KiwiSaver account before you started the relationship will be safe. 

The most common scenario is that each person keeps their own KiwiSaver money, and any difference will be dealt with through other assets, or through a cash payment.

For example, husband and wife Mike and Sally decide to split up, but Sally has the larger KiwiSaver balance. She could keep her KiwiSaver balance, and instead let Mike keep the car and boat, or some other equivalent. She could also give him half the difference in cash.

But another option is for a cash payout, where a court order directs the provider to release some of the money. For example, some of Sally’s KiwiSaver could be cashed up and given to Mike as part of a court order.

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What if you’re not married?

The law applies if you’re married, or have been in a de-facto relationship. This generally means when two people have been living together as a couple for more than three years, or a couple have a child together. 

Should you get a prenuptial agreement?

A couple makes a prenuptial agreement to determine the ownership of their assets if the relationship fails. 

It can be made before or during a relationship, and offers the chance to ringfence, or protect, certain assets. For example, it could cover a KiwiSaver balance or one partner’s inheritance. 

“Prenups are a good idea and KiwiSaver is one good example of that,” Sutton says.

If you’re feeling unsure or confused about what’s best for you, contact a lawyer or financial adviser.


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Published September 2018

Story by Claire Connell, JUNO

We aim to make investment with KiwiSaver easy to understand. To help us make this article reader friendly, we used The Write Plain Language Standard.

All content is correct at time of publication date. This article is general in nature only and has not taken into account any particular person’s objectives or circumstances. We recommend you speak with a financial adviser.