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Govt moves to allow early KiwiSaver withdrawal

Government is exploring its options to allow people with life-shortening conditions to access their KiwiSaver money earlier.

Friday, December 14th 2018, 6:00AM 1 Comment

Two independent advisers, Claire Matthews from Massey University, and the IHC's Donna Mitchell, will help Commerce and Consumer Affairs Minister Kris Faafoi find the best solution.

Faafoi met with Down syndrome man Tim Fairhall earlier this year, who drew attention to the issue of people in situations like his.

People with Down syndrome have a shorter life expectancy and Fairhall said he wanted to be able to use his KiwiSaver money to travel overseas.

“KiwiSaver helps New Zealanders enjoy the best retirement they can,” Faafoi said.

“Part of the success of KiwiSaver as a retirement savings scheme is because funds are not available until the age of 65, so the savings grow and help people considerably towards a financially secure retirement.

“However, it’s important KiwiSaver works for all New Zealanders. Tim has Down Syndrome and is aging prematurely. He hopes to retire in his mid-40s and access his savings – but at the moment, he can’t.

“I think it’s fair and just that New Zealanders who have been paying into KiwiSaver throughout their working life should expect to one day enjoy the benefits of their savings in their retirement – be that at 45 or 65.”

At present, savers can only access their money for a first home or in serious of sever financial hardship.

”I think we have to acknowledge that the one-size fits all retirement age does not work for this group faced with life-shortening conditions – so we are going to fix that,” Faafoi said.

“Dr Matthews and Ms Mitchell have been tasked with looking into how special circumstances could cater for people like Tim, enabling them to withdraw their money at the point at which they choose to retire.

“The two advisers will consult with people who are faced with this issue, with medical practitioners and KiwiSaver experts, before reporting back to me in early 2019.

“It is a technically complex area so I can’t promise a quick fix for Tim personally but I am going to move this forward because this Government is committed to ensuring its policies work for all New Zealanders.

“Everyone deserves the right to use the money they have saved for their retirement.”

Advice is expected back to the Minister by the end of February. Changes to the KiwiSaver withdrawal criteria would require legislation.

Tags: KiwiSaver Kris Faafoi

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Comments from our readers

On 14 January 2019 at 4:06 pm AndyB said:
'Tis a slippery slope this one... allowing people to withdraw based on life expectancy.

Whilst I am not dismissing the argument above re the man with down syndrome... if the argument is based on life expectancy then should we not let men access their kiwisaver funds before women? or maori and pacific islanders to access kiwisaver before Caucasians.

There is already scope to allow those with serious illness to access their savings and I think this avenue should be expanded and be better defined... it is currently the call of the fund trustee and the government has given little guidance on this.

I think the argument for those will well-defined health issues accessing kiwisaver is completely fair.. but keep it focussed on individual circumstances... not some broader life expectancy argument.

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