KiwiSaver changes provide savings access for people with shortened life expectancy
The Government is changing the KiwiSaver rules so that people with congenital life-shortening conditions can withdraw their savings when they retire, Commerce and Consumer Affairs Minister Kris Faafoi announced today.
Mr Faafoi said the issue was brought to his attention last year by Tim Fairhall, a man in his 30s who has Down syndrome.
“Tim has a shortened life expectancy, but has been contributing to KiwiSaver for a number of years. I want to see Tim and others like him have the ability to use their KiwiSaver to support their wellbeing in their retirement – which is unlikely to be at age 65.”
Mr Faafoi has been working to broaden access to KiwiSaver for people like Tim, with life-shortening congenital conditions, and has created a new withdrawal category for people in this situation.
“KiwiSaver allows New Zealanders to build a financially secure future. However, the current requirement for people to be 65 years of age to access their savings significantly disadvantages those with life-shortening congenital conditions. The new category allows people with congenital life-shortening conditions to withdraw their savings at the point that it makes sense for them to retire.
“It’s only fair that any New Zealander who has been contributing to KiwiSaver should be able to access their savings when they’re ready to retire.
“By making these changes, we’re ensuring that people with shortened life expectancies get a fairer deal out of KiwiSaver and that all New Zealanders benefit from the scheme.”
Note to editors:
- KiwiSaver is a savings tool that helps around 2.8 million New Zealanders save for their retirement. Part of its success as a retirement savings scheme is because funds are not available until the age of 65.
- The new withdrawal category establishes a set list of conditions named in regulations that would automatically qualify people for withdrawal. People will need to provide a medical certificate and other evidence to qualify for withdrawal.
- There is also an alternative process for people who have a congenital condition not named in regulations to apply to their KiwiSaver provider to withdraw their savings.
- The change will be made following an amendment to the KiwiSaver Act 2006.