In recent times, newspapers have picked up on the petition a single mother has created regarding her ability to sign her kid up to KiwiSaver without having to receive permission from the child’s father. She is the sole contributor to her child’s life, including financially. She found it unacceptable that she would have to receive permission from her ex, who wants nothing to do with the child and extends no support towards the child’s financial or otherwise wellbeing.
The law prior to 2010 stated that only one parent or legal guardian of the child needed to sign any form of document and the child would automatically be accepted by providers as equipped to open a KiwiSaver account.
However, as of 2010, that law changed. This was done because the KiwiSaver Act had to fall into compliance with the Children’s Care Act of 2004, which states that any decisions made on behalf of the child have to be agreed upon by both parents and/or legal guardians. This is due to KiwiSaver’s nature as a life-long commitment and to avoid disputes about which parent should have guardianship of the account until the child turns 18 in the event of a divorce or other forms of heavier disagreements.
From 7 September 2010 onward (at date of publishing), the law has prevented single parents from signing up their kids on their signature alone. It made no difference as to whether the other parent was missing, in jail, had some form of restriction set up from the court or there issues still left between the two legal guardians that made it hard for them to come together and discuss the child’s KiwiSaver enrolment.
According to an article as early as 2015, some providers are much stricter than others when it comes to accepting applications from single parents. A widow who decided to join her kid up to KiwiSaver before they turned 16 had to provide a statutory document declaring that the father of her child was indeed deceased. Although it is at the discretion of the provider to decide how much proof is needed to allow a solo parent to make KiwiSaver decisions on behalf of their child, this seems like an unnecessarily large hurdle to be put in the way of a single parent. I think we can all agree that life is hard enough as it is for single parents, widowed or otherwise.
The petitioner, Keltie, was not happy with this rule and her financial advisor wrote to several government officials to advocate her right to sign her child up for KiwiSaver without the need of a corresponding ex partner’s signature. The then-Minister of Revenue, Stuart Nash, replied saying that the Inland Revenue Department (IRD) had received a ‘regular’ number of complaints from parents whose kids had been enrolled into the scheme without their consent. The state feared that this could potentially undermine the importance of family and did not ensure the best outcome for the child, often causing their scheme to be void because of parental disagreement.
Keltie found through research on IRD records showed that a maximum of five guardians had lodged complaints with the IRD regarding the issue, since 2017. It was but a small number of people, especially compared to the 1500 signatures Keltie was able to gather that were in favor of a change in legislation, all gathered within a few months.
Through these obstacles, providers remained aware of the importance of KiwiSaver and its benefits to a person’s life, no matter how old. Juno, a provider that National Capital partners with, tried their best to make it easier on single parents to sign their kids up for KiwiSaver if they so wished. They offered to have their staff be the ones to contact the other parent and receive the missing signature. However, although many parents agreed to let Juno handle it and received consent, a lot of others were discouraged by the fact that any form of contact was to be made with their ex-partner and decided to wait until the child was 16 or older. This could have repercussions as the child is potentially missing on a lot of contributions and returns made on those contributions.
It is important to remember that KiwiSaver is a lifelong commitment and once the parent makes that decision for the child, they cannot opt out once they come of age. Concerns about not being able to retrieve the money to use for other goals such as study and/or travel are valid and must be taken notice. Still, KiwiSaver remains a great option as a savings scheme and it is important to remain focused on its main purpose, as a supplement for retirement or a potential first home deposit. It is not to be used for any other purposes. If one wants to make the funds available to the child once they turn 18, there are plenty of other managed funds similar to KiwiSaver that do not keep your funds locked in until 65 or in some the few other special circumstances including extreme financial difficulties or incurable illness. Furthermore, many of them have much more relaxed policies and do not require signatures from both guardians in order to participate.
Coming back to the case of Keltie and her desire to have her child participate in KiwiSaver, the petitioner secured the support of Green Party MP Jan Logie. The MP received the petition on Tuesday, 06 of April, 2021, and will be presenting it to parliament.