Otago Daily Times

KiwiSaver fund hardship applicatio­ns increasing

- TAMSYN PARKER

AUCKLAND: The number of Kiwis tapping into their retirement savings due to financial hardship continues to rise and experts say the latest lockdown could spur more claims if it drags on longer than three days.

Inland Revenue figures show that in December last year 2526 people withdrew money from KiwiSaver accounts due to financial hardship, taking out $16.4 million.

That was a significan­t jump on a year earlier when 2000 took out $11.6 million in the year to December 2019.

Statistics show the number of people taking money out of KiwiSaver for hardship rose steadily over 2020, despite the amount of economic stimulus being pumped into the economy and employment levels staying strong.

Glenys Talivai, chief executive of Public Trust, which is a supervisor for multiple KiwiSaver schemes and signs off hardship applicatio­ns, said it had seen an average monthonmon­th increase of about 20% since the first lockdown in March last year and December had been a record month for it.

She said the higher numbers in December was more about timing.

‘‘Both members and providers really tried — we pushed through as many applicatio­ns as we could in December ahead of the Christmas and summer break.’’

Since then January applicatio­n numbers had been much lower.

Ms Talivai said it was too early to know whether or not there would be any impact from the latest lockdown.

‘‘If it is just three days, I wouldn't imagine that would be significan­t but you just don't know where some of these businesses are at now.

‘‘That is the biggest question: is a threeday lockdown enough to push some businesses over the edge?’’

One of the biggest drivers of people applying for a financial hardship claim is the loss of their job.

Harry Koprivcic, chief executive at Guardian Trust, another firm which acts as a supervisor for KiwiSaver funds, said if the lockdown dragged on longer than three days there could be an impact on applicatio­ns.

‘‘It's a short lockdown, but I think if it goes for more than a week or two weeks you could.’’

Mr Koprivcic said Guardian Trust saw a slight increase in applicatio­ns in April after the first lockdown.

‘‘There was a slight jump. There was never a big spike, it was manageable, but I think the industry was preparing for that.’’

After that it tailed off until another slight increase in September and October after the Government subsidies dropped off, he said.

Tom Hartmann, personal finance spokesman at the Commission for Financial Capability, said he hoped the latest lockdown would not be the ‘‘straw that breaks the camel's back’’.

‘‘People's situations can vary in terms of how precarious they are and maybe a seemingly small thing for one person is actually a really big thing to another and pushes someone to that level where they have to rely on KiwiSaver to get by, to keep food on the table and that is legitimate.’’

Applicatio­ns can be made only by those struggling with daytoday living costs. It can not be used to pay off credit cards or other forms of debt or fines.

Newspapers in English

Newspapers from New Zealand