Using Kiwisaver to fund Weight Loss Surgery

3 Mar 2020 | Announcements, Bariatric Surgery, Gastric Bypass, Sleeve Gastrectomy

UPDATE 2023:
Unfortunately since this blog post was first written the grounds for accessing KiwiSaver under the ‘Serious Illness’ category has very much tightened up.  Withdrawals for disability are not permitted if surgery would treat or resolve that disability, as is usually the case with bariatric surgery.  As the criteria for Serious Illness are set in legislation, we are no longer able to support Serious Illness withdrawals outside of these criteria.  Withdrawal of KiwiSaver funds may still be possible under the Financial Hardship criteria, where medical certificates are not required.

One frequent question I am asked is “Can I access my KiwiSaver to pay for weight loss surgery?”

On the face of it this is a very good question.  Many people have enough money in their Kiwisaver accounts to pay for weight loss surgery and feel the health benefits from significant weight loss will improve their quality of life in retirement.  Also, in the past it has been possible for people with Australian Superannuation to use this to fund weight loss surgery.  Unfortunately, in New Zealand things are not so simple.  Kiwisaver has been established to allow New Zealanders to fund their retirement over and above whatever NZ Superannuation is able to pay in the future.  Aside from the First Home Grant, is is difficult to withdraw money from your Kiwisaver account, until you reach your age of entitlement.

There are however, two possible exceptions that some people may be eligible for.  According to the KiwiSaver Act 2006, an application for early withdrawal may be on the grounds of serious illness.

‘Serious illness’ is defined as: an injury, illness or disability that results in your being totally and permanently unable to engage in work for which you are suited by reason of experience, education or training or a combination of those things; or an injury, illness or disability that poses a serious and imminent risk of death.

While the second clause precludes bariatric surgery as an imminent risk of death means that someone is likely to die very soon as a result of their weight.  If this were true then almost certainly any elective surgery would not be safe.  The first clause however may be applicable to some people, particularly if weight related health complaints prevent you from working in your chosen occupation.  A doctor will need to certify that a person does meet this clause, and even then the fund manager of a person’s Kiwisaver scheme will still need to make a decision based on the advice they receive.

For people who do not meet the serious illness grounds, then KiwiSaver withdrawals may also be available for significant financial hardship.

Significant financial hardship is defined by the KiwiSaver Act as significant financial difficulties that arise because of … the cost of medial treatment for an illness or injury of a member or a member’s dependent.

Here at ABLE we are not financial advisors.  We strongly encourage anyone considering applying to access their Kiwisaver on the grounds of serious illness to consider the effect it will have on their retirement savings and discuss this with a registered financial advisor.  We also recommend you discuss this with your GP and your KiwiSaver provider, as they are probably the best placed to advise you as to whether your health problems may qualify under the serious illness category, or whether you may be eligible under the significant financial hardship grounds.  If you have any other questions, please Contact Us.