Modern blended families are making it hard for under 18s to join KiwiSaver, says a financial adviser.

Simon Hepple, a wealth adviser with Pie Funds Management Limited, says families have to jump through hoops to enrol their under-18 year old children in the scheme. Many struggle and give up before they finish the process, he says.

The problem is with the forms that have to be filled in, he says.

“Both parents or guardians must sign the KiwiSaver account application, so this is problematic if they aren’t on speaking terms.

“It’s also difficult if a relationship breakdown has occurred between biological parents or named guardians.”

He says proof of identity is also a problem.

“Under-16 year olds have to provide a birth certificate, because a copy of a passport is not enough.

“This can be a problem for children born in countries other than New Zealand, especially non-English speaking countries, because they’ll need to track down their birth certificate and get it translated,” he says.

Each parent or guardian’s identification must match the name on the birth certificate, and if the name is different, a marriage certificate, name change paperwork, or guardianship order also has to be produced.

Hepple says it can be a long process to get these certificates, involving applications at NZ$33 each, and it can take up to eight days to receive the paperwork.

“There’s an obvious cost and annoyance factor. Many people start the process but find it’s so hard that they give up.”

Children are welcome to join KiwiSaver but they no longer get a NZ$1,000 kick-start grant.

Once they reach 18 years old and start working, they’ll start contributing a minimum of 3 per cent of their earnings and qualify for the employer contribution of 3 per cent. Once they’ve joined, they can’t opt out, but can go on a contributions ‘holiday’ for up to five years.

The money can only be withdrawn for a first home or at age 65 or the current age of NZ Super eligibility.

First published 9 April, 2018

By Brenda Ward

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