Majority of Children in State Care Set to Miss Out on KiwiSaver in New Bill


By Joshua Sade-Inia

A promising Bill which aimed to make it easier for children in state care to open KiwiSaver accounts has been met with fierce opposition. The result is a significantly watered-down piece of legislation. Contributor Joshua Sade-Inia talks about his own personal connection to the initial Bill, and looks the reasons behind the somewhat disappointing outcome.

As someone who spent most of their childhood years in state care, I have experienced first-hand the feelings of vulnerability that come with not knowing what my future holds. Feeling like a product of the state, rather than a child with feelings and dreams like any other. Moving from home to home, I had little to no expectation of financial security for my future. This meant at times losing every belonging I had, including my savings. Although I have overcome these obstacles for the most part, for many children in state care, this is not the case.

A recent Bill sponsored by National MP Hamish Walker and supported by NGO VOYCE  and the KiwiSaver scheme Simplicity would have worked towards changing this lack of financial security for the more than 6000 children currently in the care of the state. The KiwiSaver (Oranga Tamariki Guardians) Amendment Bill, aimed to give vulnerable children the same right that more than 300,000 other children in New Zealand currently have – the ability to open a KiwiSaver account. Only parents and registered guardians can sign a child up for a KiwiSaver account, while foster parents are currently barred from doing so. This means that, while the sign-up process can be completed in a matter of minutes for some, children in state care have next to no ability to do the same. Not only would the Bill allow foster parents who have been doing a superb job under the shadow of Oranga Tamariki to open a Kiwi Saver account for a child in their home, it would also contribute to furthering children’s identity, allowing them to start saving for their future. 

Being the only financial instrument in New Zealand that can only be accessed by the account holder, allowing these children to have their own Kiwi Saver would ensure financial security both in the long and short term. As they transitionfrom one home to another – something that increases the vulnerable state they find themselves in - they would not have to worry about their savings being safe or not, nor would they have to worry that others would be able to access it. Further, it would allow them not only the opportunity to save for retirement or a first home deposit, but also should they come under financial hardship they could use the savings as a safety net. 

For many it would seem a no brainer to secure the financial future of children in state care, however this Bill has not been without political challenges on its journey to becoming law. It would make sense to put aside political standings and allow something in the best interests of children in care to pass- particularly when there are few identified downsides to the Bill.  Nonetheless, Oranga Tamariki recommended restrictions be put in place on the move whereby only legal guardians would be able to open accounts. However, it remains to be heard why such a move was necessary, considering at this stage Oranga Tamariki has not given any reasons as to why or how the original Bill would negatively impact children in state care. Under former legislation only the CEO of Oranga Tamariki had the authority to sign children up to Kiwi Saver, and little to no action was taken to do so.  

There are some who see the call for more restrictions on this Bill as a means for Oranga Tamariki to maintain power and influence over the lives of these children, rather than having their best interests in mind. The extent of the power is not to be under-exaggerated - it spans so wide that foster parents must get permission to have a child’s hair cut; something that I have personally experienced. 

In its second reading the restrictions proposed by Oranga Tamariki were allowed. The government chose to turn down Bill additions that would have allowed KiwiSaver access for all 6000 foster children in New Zealand. The amended Bill now applies to foster children under the care of a legal guardian, which only accounts for roughly 10% of children in state care. In defence of this, Deputy Prime Minister Winston Peters asserts that it would be unwise for the Government to support any action that would undo “careful recommendations made by the Social Services Select Committee” which is responsible for this area. 

The outcome of such a move now means that a mere 500 of these children out of the 6000 will have access to KiwiSaver through their foster parents now that the Bill has passed through its final reading. Although this is a small win for those 500 children, it is overshadowed by a majority that will be missing out on the opportunity to secure their financial future and take a small step towards financial stability.

As has been mentioned, it makes sense to allow children in state care the same opportunities as the majority of other children in New Zealand. To allow them to look forward to the possibility of a future with financial security and one less situation of vulnerability they have to face. Whilst I am personally deeply disappointed at the move to restrict this process so narrowly, I do have hope for these kids. I am happy that 500 will at least get the chance to realise what it means to be financially secure and hopefully live a stable and more fulfilling life as a result.


Header image sourced from pixabay

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