Parliament on Thursday passed amendments to the Pension Act allowing people diagnosed with terminal illnesses to withdraw money from their pension accounts before reaching retirement age.

The bill, submitted by Milandhoo MP Hassan Mufeed Abdul Qadir, states that individuals who are not expected to survive for more than one year despite receiving adequate medical care may access their retirement savings early.

Under the proposed changes, a terminal illness is defined as a condition where a doctor determines that a patient is unlikely to live beyond one year.

The bill allows eligible individuals to withdraw either a specified portion or the full amount in their pension accounts, either in instalments or as a lump sum.

The amendment also introduces broader changes to the Pension Act, including provisions allowing pension savings to be used as collateral for down payments on home construction, renovation or house purchases.

Current law only permits pension funds to be collateralised for the purchase of completed flats sold to the public.

The bill was passed following a vote in Parliament, with 61 of the 70 members present voting in favour. Eight MPs voted against the bill, while one member abstained.