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Concerns KiwiSaver bill could be stopped

There are concerns that a bill that would make it easier for foster children to access KiwiSaver may be stopped in its tracks.

Tuesday, February 19th 2019, 6:00AM 6 Comments

The private member’s bill was introduced by National P Hamish Walker and would allow any foster parent to approach a KiwiSaver provider to open an account for a foster child in their care.

Financial Advice New Zealand had offered its members’ services, pro bono, to any foster kids who wanted advice with their KiwiSaver enrolment.

The bill passed its first reading and is before select committee.

But it has been reported that Oranga Tamariki opposed the plan.

Sam Stubbs, founder of Simplicity, said that was outrageous.

He said the plan should have been a no-brainer.

"You couldn't do a more innocuous thing for a kid."

He said, if it were stopped, it would be a "triumph of politics over children's welfare".

KiwiSaver would be a safe place for them to put their money, or for other people to put money for a child, he said. 

"The only losers [if it doesn't go ahead] are the kids. Denying them their financial welfare."

He said he had dealt with one mother who had been trying for five years to set KiwiSaver up for her foster kids. Normally, parents can do it in minutes.

Financial Advice NZ chief executive Katrina Shanks said she was keen to see the bill proceed.

"We talk about wellbeing and inequality - this is a way to amek it better for these kids."

A spokeswoman for Walker said he could not comment on "privileged information relating to his KiwiSaver (Foster Parents Opting in for Children in their Care) Amendment Bill, while it is working through Select Committee".

Tags: Financial Advice New Zealand KiwiSaver Sam Stubbs Simplicity

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Comments from our readers

On 19 February 2019 at 4:20 pm Murray Weatherston said:
Cui Bono?

I have to wonder whether children's access to Kiwisaver is a policy that will save mankind.

I know the bil is about foster children, but I wonder why anyone would suggest children invest in a workplace savings scheme and/or superannuation scheme.

The kids don't get employer contributions, member tax contributions (govt contributions), a kick start nor any tax breaks. The money is locked in till their 65.

Where is the interest for a child or foster child to be in Kiwisaver?

I can see why kiwisaver providers would be interested in hoovering up kids kiwisaver money provided by parents/grandparents.

But benefit for the kids? Seriously? I look forward to hearing the excuses!
On 20 February 2019 at 1:40 pm mike6156@gmail.com said:
Murray you’re sounding like an old white male financial adviser. Many parents, grandparents have opened KiwiSaver accounts for their children and or grandchildren. Your grumpy old man view of an altruistic motive may not be of interest you. But I’m sure those with foster children would have another view. Why should we discriminate on the basis of what may or may not have happened between a child’s birth and teenage years. Why should they miss out? Personally I think it is merely addressing an issue overlooked when KiwiSaver was conceived.
On 21 February 2019 at 8:15 am Murray Weatherston said:
@Mike

I am offended by your discriminatory outburst which is misandrous, ageist and racist!

But seriously, you completely miss my point. I am not against familial philanthropy - not at all. My record on this would stand for itself.

My point is simply this - why would anyone choose to use a superannuation savings scheme as the vehicle to provide this philanthropy. Apart from death, financial hardship and first home purchase, the money is locked in till the age at which the child will ordinarily qualify for NZ Super. In the case of a 3 year old and today's qualifying age of 65, that's 62 years into the future. For a 16 year old, that's lockup for 49 years. Cui bono?

There is a financial life cycle, and our families might need support in many circumstances between the ages of 18 and 65.

On a related matter, I have never seen why support for first home purchase is restricted only to Kiwisavers. Why isn't a 24 year old purchaser not in Kiwisaver equally supported to buy their first home?

The current policy is discriminatory.

On 21 February 2019 at 8:52 am Dirty Harry said:
Murray appears to have missed the point about how unfair it is to not provide the same choices to foster kids as every other man woman and child enjoys in this country.
Murray appears to also have missed the bit about securing the money beyond the reach of those guardians that are inclined take it and spend it. "For the kids" of course.
Murray misses the point that this law change is both simple and cost-free to the Government because, as he stated, they don't have to put in tax credits or kick starts.
Murray missed the bit about how KiwiSaver providers are offering to waive their fees for the foster kids accounts.
Murray missed the bit where advisers are offering pro bono services to help the kids and their foster parents.

Funny how much you have to miss, to maintain a point of view.
On 21 February 2019 at 9:06 am gavin austin adviser business compliance said:
Murray
Just looking at one key benefit of Kiwisaver first home purchase. Do you not agree that the financial wonder of compound interest over a twenty plus time period would be of significant benefit to the child? I certainly would and even if that's not the case then again the effect of that wonderful thing called compound interest is even more beneficial. You also seem to have forgotten that the "child" can decide when they start in the workforce to also contribute with the associated befits. A no brainer really. No one is advocating that Kiwisaver is the only savings option for anyone who wants to "SAVE" for the future. Try having an open mind after all it's an individual right to follow any pathway people choose an it is arrogant for anyone to sit back and make critical comment. By the way there other support structures for first home buyers if you care to do some research.
On 21 February 2019 at 2:42 pm Murray Weatherston said:
I give up.
I didn't know that the "miracle of compound interest" is unique to Kiwisaver schemes.
I didn't know that if you weren't joined up for Kiwisaver as a kid, somehow your Kiwisaver choices were limited as an adult.
I didn't know that the guardians who presumably funded their foster children's accounts could not be trusted not to raid those accounts at some future date.
I didn't know that everything that is cost-free to the Government must be automatically good. [I'll have to unlearn about private cost.]
I didn't know Kiwisaver managers were so magnanimous.
Really, I just didn't realise how little I knew before.Thanks guys for enlightening me.

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