KiwiSaver law change needed after fraudster Joanne Harrison's KiwiSaver protected - expert

Joanne Harrison was jailed in February this year. Photo / File

The Government will likely look at changing the Proceeds of Crime Act to allow police to seize KiwiSaver funds of those who have financially benefited from their crimes, a legal expert says.

Criminal Bar Association president Len Anderson was speaking to Larry Williams Drive on Newstalk ZB this afternoon after it was revealed Justice Rebecca Ellis ruled police could not seize $109,000 in the KiwiSaver fund of convicted Ministry of Transport fraudster Joanne Harrison.

Harrison was jailed for three years and seven months in February after admitting to dishonestly taking or using a document, and the Serious Fraud Office found she defrauded the ministry of $726,000 while employed as a general manager.

Police, under the Criminal Proceeds Recovery Act, have made a bid to seize assets owned or controlled by Harrison or her partner, including a half-million dollar property, BMW, expensive watches and the KiwiSaver fund.

But Justice Ellis ruled the KiwiSaver funds could not be seized as the provisions of the KiwiSaver Act prevailed over the Criminal Proceeds Recovery Act.

"It seems unlikely that the relationship between the two Acts was considered at the time the KSA was enacted. It may well be that legislative amendment is required," she said.

Criminal Bar Association president Len Andersen agreed.

"I think that as a result of this decision I'm sure the Government will look at perhaps changing that so it's subject to the Proceeds of Crime legislation," he told Williams.

"I can't think of anything else offhand that is protected in the same way as KiwiSaver."

It seemed unjust that KiwiSaver had protective positions — it was also protected in bankruptcy, although not in a relationship breakdown, he said.

The trouble with KiwiSaver was people were not restricted to just putting in the small percentage of earnings from themselves and their employer.

"There's nothing to stop people putting quite large amounts in ... if you think about it in terms of criminal enterprises, it would be rather shortsighted of a drug dealer not to have a KiwiSaver account."