KiwiSaver withdrawal plan delayed
A Government promise to progress KiwiSaver withdrawals for people with life-shortening conditions has been delayed.
The Opposition is calling on the Government to reconsider its member’s bill that would fast-forward the process but that request has fallen on deaf ears.
At the moment it is only possible to withdraw KiwiSaver money for a first home, in cases of severe hardship or at 65.
People with life-shortening conditions are typically only able to withdraw their savings when they are permanently unable to work or at imminent risk of death. Tim Fairhall
In December, two independent advisers were appointed to help Commerce and Consumer Affairs Minister Kris Faafoi find the best way for people with lifeshortening conditions to withdraw their KiwiSaver funds when it was time to retire.
The move followed a plea from Tim Fairhall, who has Down syndrome and wants to access his KiwiSaver funds early .
Fairhall was 39 when he spoke to MPs in Parliament in September, saying he wanted access to his KiwiSaver funds before 65 so that he could travel overseas while he was still in good health.
Having Down syndrome meant Fairhall is ageing faster than most people. The life expectancy for people with the condition is 57.
On December 11, Faafoi said he believed it was fair that New Zealanders who had 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.
Claire Matthews, of Massey University and Donna Mitchell, of the IHC, were appointed to look at how special circumstances could be dealt with to help people such as Fairhall.
They consulted people who are faced with this issue, with medical practitioners and KiwiSaver experts, before reporting back in early 2019. They were due to advise the minister by the end of February but Faafoi only received the report earlier this month.
‘‘I’m looking at how best to progress measures to ensure a fair outcome for people with life-shortening conditions. It’s a complex area so I have asked officials to work with urgency,’’ he said.
National List MP Nicola Willis believes her member’s bill could resolve the problem by providing a mechanism to permit an individual with a life-shortening illness or condition to apply for compassionate consideration, so they can make withdrawals before age 65.
Willis proposed that her KiwiSaver Compassionate Consideration Amendment Bill should be adopted as government legislation, which would fast-forward progress.
She suggested her bill be adopted as the template to give the issue momentum and accepted that it could be tweaked.
However, Faafoi has ruled this out. ‘‘A member’s bill isn’t the best way to tackle this and isn’t needed,’’ he said. He aimed to be able to confirm measures by mid-year.
Willis said she was disappointed by what seemed like an unjustified delay that would affect a lot of people who wanted to see progress a lot quicker.
New Zealanders with life-shortening conditions were being left in limbo because the Government punted the issue to a working group rather than accept her bill, she said.