Government announces four life-shortening congenital conditions guaranteeing early KiwiSaver withdrawal

The Government has announced the four life-shortening congenital conditions that will guarantee sufferers the ability to withdraw funds from their KiwiSaver whenever they decide to retire. 

The KiwiSaver Act 2006 was amended last year so that people with life-shortening conditions can withdraw money from their funds before they reach the age of 65, which is when Kiwis become eligible for Superannuation and can access their savings. 

Those with a "listed condition" only need to show a medical certificate verifying they have the condition. If a condition is not listed, the applicant needs proof from a medical practitioner that they suffer from an illness expected to reduce their life expectancy to below 65. 

On Thursday, Commerce and Consumer Affairs Minister Dr David Clark announced the four illnesses that will be listed: down syndrome, cerebral palsy, Huntington’s disease and fetal alcohol spectrum disorder.

"The KiwiSaver scheme helps people to build a financially secure future, and the Government wants to ensure all New Zealanders can benefit from the scheme," Dr Clark said. "However, the previous requirement for people to be 65 to access their retirement savings puts those born with life-shortening conditions at a significant disadvantage."

He said the list of conditions was developed in consultation with health and disability experts and that these conditions are expected to make up the majority of applications under the new withdrawal category. 

"However, the flexibility exists for the Government to review the list periodically in consultation with experts to ensure it is up-to-date."

Those suffering from one of the conditions can apply to withdraw money from a KiwiSaver fund whenever they believe it is the right time for them to retire. They don't need evidence of the severity of their condition or ability to work. 

The decision to change the KiwiSaver rules was first announced in 2019 by then-Commerce and Consumer Affairs Minister Kris Faafoi. He said the issue had been brought to his attention by Tim Fairhall, a Kiwi in his 30s with 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," he said at the time.

Dr Clark on Thursday said the changes were a testament to Fairhall and his mother, Joan. 

"It's only right that the KiwiSaver scheme is fairer for everyone, and the Government has made changes to ensure that happens."

The changes will apply from March 26.