Cancer sufferer "Christopher" is discouraged by the KiwiSaver early withdrawal process. Photo / 123rf
By Susan Edmunds of RNZ
A cancer sufferer says he has been so discouraged by what he has discovered about early KiwiSaver withdrawals that he hasn’t even tried to get much-needed money out of his account – and wants the system to change.
The man, who wants only to be identified as Christopher because he has not told his teenage children about his prognosis, said he had been given about three years to live.
He was told in August that his cancer was stage four and terminal.
“At the time of discovery in August, the doctor said that based on what he saw, I only had a handful of months left. Fortunately, I have private health insurance and was therefore able to actually be seen and start treatment. If I hadn’t already had private health insurance, I’m sure I would have died before I was able to start treatment, if I’d been forced to rely strictly on the public health system.”
He said researching what was involved in a hardship application for KiwiSaver was “so discouraging” that it did not make sense to go through it and be rejected.
“I’ve got limited time and fighting with someone that’s holding my money and refusing to give it up is just one more stress I can’t afford.”
He pointed to a case that was dealt with by Financial Services Complaints Ltd, in which a woman wanted to withdraw her money early.
She too had incurable cancer and was not expected to reach 65.
She applied on the basis of serious illness but was declined because the supervisor for the scheme said she did not meet the criteria because she was expected to live at least another 12 months.
She argued it was unfair because she was not going to need the money for retirement. She said it was also unfair to say she was able to work because she was sacrificing time with her family to do so.
FSCL said the decision to decline her application was reasonable given that she did not face an imminent risk of death, which was determined as likely to happen in the next six to 12 months.
Christopher said he had lost his job as a public servant and had eight months without work before he found a contract role that lasts until June.
“Different kinds of cancer have different effects. Pancreatic cancer for example, is extremely painful and quite brutal. I’ve got bowel/colon cancer so the immediate first-order effects are moderate in comparison. However, things like the side-effects of chemo, the fact that treatment is two days out of five working days ... it’s a lot for an employer to be willing to deal with. Those two days are strictly for the treatment/chemo infusion. The next day … it’s hard to even get out of bed. For me, that’s every other week.
“And that’s not even going into the various side effects of the medication, like puking, hyper-sensitivity to cold, brain fog and so forth.
“Even when I move, I’m super slow compared to a few months ago … Future contracts mean I have to disclose my diagnosis and hope that doesn’t mean I lose the contract to someone that doesn’t have cancer.”
He said living in Wellington with a mortgage and two kids meant that he had to work.
“I’ve got two or three years where I’ll be able to essentially function but ... living ain’t easy. And dying is surprisingly hard too, it seems. Instead of being able to spend time with the family, I’m either working or sleeping.”
He said the system should change.
“In theory, it’s my money. The Government is apparently confident enough in my ability to manage it and get good returns, that they’ve cut the amount they’re willing to match.
“And yet trying to actually do something with it, people are treated as if they’re applying for a loan and have to justify it to the bank/service provider. I understand that there needs to be rules to prevent people withdrawing it willy-nilly but when you’re talking about someone literally dying ... I think it’s a bit ridiculous.
“I don’t deserve to actually enjoy the couple of remaining years of good life that I have and instead have to wait until I’m knocking on the hospice door, before they’ll reluctantly agree that they guess they can release my money? It feels like the banks/service providers consider it to be their money and it’s massively inconvenient for them when we need access to it. With the amount of profits the banking sector has turned in over the last few years, it’s kind of hard to swallow that these rules are in place just for my own good.”
David Callanan, general manager of corporate trustee services at Public Trust, said he was sorry to hear about Christopher’s situation. He said while he could not speak about a specific case, in general people could apply to withdraw money under significant hardship or serious illness criteria.
“Under a serious illness application, people may meet criteria for ‘imminent risk of death’ as stated by law, allowing a full withdrawal of their KiwiSaver investment. The Financial Services Council’s guidelines interpret this as the person being diagnosed with a terminal illness with 18 months or less to live.
“However, supervisors and providers are encouraged to take a common sense approach and the supervisor assesses each application individually.
“As part of the withdrawal application, the person will need a doctor or nurse practitioner to complete a declaration form confirming their illness. This form asks the medical practitioner to give a detailed description of their patient’s condition and attach any supporting evidence.
“Under a serious illness withdrawal application, a person may meet criteria to withdraw if they are totally and permanently unable to work due to their illness. This could allow them to access a full or partial withdrawal, or one-off costs.
“A person can also apply to withdraw on significant financial hardship grounds. In most cases, this could allow them to access an amount equivalent to up to 13 weeks of living expenses, including any one-off costs. We encourage people to speak to their KiwiSaver provider in the first instance to discuss early withdrawal options.”