Wednesday, December 12, 2018

WINZ undermines KiwiSaver

The idea of KiwiSaver was to encourage new Zealanders to save for their retirement. But WINZ is undermining the scheme by demanding that people use their retirement savings rather than giving them benefits:

The number of people looking to dip into their KiwiSaver funds for hardship reasons is rising sharply.

One of the scheme's default providers Fisher Funds said how to access the funds because of financial problems is now the most common query received from savers, with some savers being told to withdraw funds by the Ministry of Social Development.

Fisher chief executive Bruce McLachlan said it is an unfortunate state of affairs.

"We do have very established [social welfare] mechanisms in New Zealand already... I would like to think that is dealing with the real hardship cases, rather than people getting access to KiwiSaver."

KiwiSaver savings are not treated as "cash assets" for the purposes of the accommodation supplement, or (it seems) for the purposes of receiving temporary additional support. So WINZ's response to someone going to them and asking for help is to demand they make themselves ineligible. Its both a terrible incentive, and simply illegal, and the Minister should be telling them to stop immediately.