Plans outlined for bankrupt KiwiSaver members
KiwiSaver providers have been told how the Official Assignee will access the savings of people who go bankrupt.
Sunday, November 15th 2015, 3:31PM
A long legal fight has been raging over whether bankrupt KiwiSaver members’ money can be used to pay their creditors.
Estimates are that more than 5500 members of KiwiSaver are bankrupt, with accounts worth about $30 million.
The Court of Appeal ruled this year that bankrupts’ KiwiSaver cash did not vest to the Official Assignee, which administers bankruptcies, so could not be used to pay their debt.
It said: “There is nothing in the KiwiSaver Act to suggest that a purpose of the legislation is to accumulate funds for the benefit of creditors in the event of the member’s bankruptcy. If that were the case, the important social and economic purposes of the Act would be undermined and the burden of providing for the welfare of individuals would fall back on the state.”
DLA Piper, which acts for KiwiSaver trustee Trustees Executors has written to providers.
It says it can still summons people and request information from them, that money paid to a KiwiSaver member during bankruptcy could be claimed, such as money withdrawn in the case of a serious illness, and that it would investigate irregular contributions to KiwiSaver that might indicate people trying to put money into their accounts before they entered bankruptcy.
The Official Assignee is planning to repay money it received from KiwiSaver scheme providers before the ruling that it was not entitled to it.
MBIE is expected to issue a discussion document over the coming months.
| « Adviser KiwiSaver schemes lose share | FMA raises KiwiSaver bar » |
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