Strict KiwiSaver rules may be blocking weight loss surgeries in New Zealand

A bariatric surgeon in Northland says about half of his initial patient consultations do not move forward to surgery, and stricter KiwiSaver hardship withdrawal rules may be the cause. The surgeon, Sean Liddle, stated that some patients now choose to travel offshore for cheaper treatment, while an increasing number rely on KiwiSaver withdrawals to pay for the procedure.

Withdrawal Changes

Christine Liggins, founder of Debtfix, noted that some KiwiSaver providers have changed how they assess weight loss surgery applications. Providers now often pay only the initial deposit and release the rest only after receiving proof of the surgery. Liggins supports paying funds directly to the hardship source rather than putting cash into a person's account.

Rules and Reasons

David Callanan from Public Trust explained that surgery makes up a relatively small share of hardship withdrawal requests, with living costs, overdue bills, and rent being the most common reasons. Meanwhile, Generate investment specialist Greg Smith said legal tests for accessing funds are strict. He stated that serious illness provisions require proof of being unable to work or facing imminent death, while significant financial hardship provisions require applicants to show they have exhausted all other options like savings or insurance.

Context

KiwiSaver is a voluntary savings scheme designed to help New Zealanders save for retirement, though funds can sometimes be accessed early under strict legal conditions like significant financial hardship. Bariatric surgery involves various weight loss procedures aimed at improving overall health and lifestyle for eligible patients.