Mortgage diversion – use of past contributions

Submission

(Matter raised by officials)

Mortgage diversion should apply only to contributions made after a person joins the mortgage diversion facility and not to a member’s previous contributions as well.

Comment

Currently, the wording of section 229 of the KiwiSaver Act could be interpreted as allowing up to half of a member’s total KiwiSaver funds to be diverted, including all past contributions. It is the policy intent that past contributions cannot be used under the mortgage diversion facility and the legislation should be clarified accordingly.

Recommendation

That the submission be accepted.