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Thursday, April 21, 2011

Quake victims expected to use KiwiSaver option

Quake victims expected to use KiwiSaver option

Last updated 05:00 21/04/2011
Many people adversely affected by the Christchurch earthquake will be applying to withdraw their KiwiSaver contributions after the Government's decision to relax the financial hardship criteria, a leading KiwiSaver provider says.

The Government added the February earthquake to the list of circumstances that can be considered for an early KiwiSaver contribution withdrawal to make it easier for earthquake-affected residents to take out money from their retirement savings because of financial hardship.

Gareth Morgan KiwiSaver customer services manager Steve Wiggins said their office started receiving inquiries from Canterbury residents about the process shortly after the minister's announcement. "So far we only have one application from Christchurch this week. We expect a lot more through next week."

Commerce Minister Simon Power said that under the changes, anyone living in Canterbury when February's earthquake occurred can cite destruction or damage to property, loss of employment and costs incurred, including moving home or dealing with trauma caused by the disaster when applying for financial hardship claims.

"Apart from the obvious physical and emotional damage, February's earthquake has seen many people suffer financially," Mr Power said.

There have been reports of people being turned down when trying to make an early withdrawal of their KiwiSaver contributions under the significant financial hardship rules because the threshold was previously too high.

Formerly a KiwiSaver member was only considered in significant financial hardship under strict criteria. They had to prove they could not meet minimum living costs, mortgage repayments, the cost of modifying a place to meet special needs arising from disability, or the cost of medical treatment or a funeral.

Many Canterbury KiwiSaver members have been unable to provide the documentary evidence formerly required to support hardship claims.

Mr Power said Government officials were working closely with KiwiSaver trustees to provide guidance on how to deal with earthquake-related hardship claims.

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