Major illness grounds to access KiwiSaver

QUESTION: My husband has been diagnosed with a serious illness.  He has given up work.  Can he apply to cash up his KiwiSaver?

ANSWER:  I am very sorry to hear about your husband’s illness.  Yes he can apply for early payout of his KiwiSaver.  Being diagnosed with a serious illness (or becoming permanently disabled) is generally the only time you can apply to cash up your entire KiwiSaver account before the age of 65 - including the ‘kickstart’ and the member tax credits (government contributions). 

According to the KiwiSaver Act there has to be ‘serious and imminent risk of death’ or an illness that results in ‘being totally and permanently unable to engage in work they are suited for…”  Your husband’s KiwiSaver provider should have a standard claim form that he can fill out.  As he is not well I assume you will be helping him with this. 

The claim form requires detailed information to be provided and the claim process may be time consuming.  It will have to be signed by your husband in front of a Justice of the Peace or lawyer as a Statutory Declaration.  It may make things easier for you if you can find a JP who lives near you (look in the Yellow Pages) and may be willing to visit your husband at home.  Your husband’s doctor will also have to complete and sign the claim form, giving detailed medical information to show that his condition is serious.  The trustees of his KiwiSaver scheme will then assess the claim carefully before making their decision whether or not to repay - in part or in full.  Be aware that the whole claim process may take weeks or even months.  If you are struggling financially then I suggest you talk to WINZ about what benefits you may be entitled to, if you have not already done so.

This is a difficult time for both of you and I hope you are getting good support from family and friends.

Shelley Hanna is an authorised financial adviser FSP12241.  Her disclosure statement is available on request and free of charge by calling 8703838.  The information contained in this article is of a general nature and is not intended to provide specific or personalised advice.  If readers have any KiwiSaver questions they would like answered please go to www.peak.net.nz or email shelley.hanna@peak.net.nz.

As published in the Hawkes Bay Today 30 August 2011