Gov’t Proposes Pension Act Amendment to Cover Serious Illnesses and Hajj Financing

The government has submitted a bill to Parliament proposing amendments to the Pension Act that would allow pension funds to be used for the treatment of serious life-threatening or terminal illnesses, even if the individual has not reached the pensionable age.

The bill, submitted on behalf of the government by Member of Parliament Hassan Mufeed Abdul Gadir, was proposed in line with an announcement made by President Dr Mohamed Muizzu on 7 December. It is scheduled to be debated at an extraordinary session of Parliament on 5 January.

Under the proposed amendments, serious illnesses are defined as conditions in which a specialist doctor determines that the person is unlikely to survive more than 12 months despite adequate treatment. Pension funds could be used either as a lump sum or in multiple payments to cover medical costs, while individuals whose income exceeds the basic pension payout would be excluded.

The bill also includes provisions to allow pension funds to be used for Hajj financing. Eligible individuals could reserve a Hajj waitlist spot by paying 20 percent of the fee to the Maldives Hajj Corporation, with the remaining 80 percent covered from their pension savings. The proposed amendment specifies that funds previously used for housing down payments would be deducted when calculating the amount available for Hajj financing.

Eligibility for Hajj financing would be limited to those who have not previously performed Hajj and have accumulated sufficient pension savings to receive a monthly payout of at least USD 130 at pension age. Funds used for Hajj would be deducted from the pension account, while the remaining balance would stay intact.

The proposed amendments aim to provide greater flexibility in the use of pension funds, supporting both critical healthcare needs and religious obligations.