The Social Services and Community Committee has examined the KiwiSaver (Foster Parents Opting in for Children in their Care) Amendment Bill and recommends that it be passed with the amendments shown.

The KiwiSaver (Foster Parents Opting in for Children in their Care) Amendment Bill is a member’s bill in the name of Hamish Walker MP.

The bill seeks to enable any foster parent or kin carer to open an account with a KiwiSaver provider for a foster child in their care. The bill would amend section 35 of the KiwiSaver Act 2006 to allow the enrolment in KiwiSaver of:

• a 16- or 17-year-old who is in foster care if they and 1 of their foster parents or kin carers jointly contract directly with a provider

• a person who is under the age of 16 and in foster care if one of their foster parents or kin carers contracts directly with a provider.

This commentary covers the main amendments we recommend to the bill as introduced. We do not discuss minor or technical amendments.

The bill as introduced would allow any foster parent to enrol a child in their care in KiwiSaver. This would include those with care arrangements that are only temporary. Several submitters expressed concern that this provision is too broad. There were concerns that a short-term foster parent may not be best placed to consider what is in the long-term financial interest of the child.

We also heard concerns about situations where foster care arrangements are short-term and may change over time. One submitter noted that a child’s subsequent caregivers may have different views about finances, including KiwiSaver. Additionally, it may be difficult for KiwiSaver scheme providers to accurately identify who is authorised to enrol a child in KiwiSaver.

We recommend amending the bill to enable only those foster parents who have committed to a long-term care arrangement to enrol a child in KiwiSaver without the consent of a child’s other legal guardians.

Accordingly, we recommend inserting clause 3A, to amend section 4 (Interpretation). Our proposed new clause 3A(1) and (2) would repeal the definition of “CYPFA guardian” and replace it with a new definition of “Oranga Tamariki guardian”.

Our proposed new definition of an “Oranga Tamariki guardian” under clause 3A(3) would include:

• Any person appointed under section 110 of the Oranga Tamariki Act as the sole guardian or additional guardian of a child. This would now include “any other person” that a court has appointed as a guardian of a child under that Act.

• Any person appointed as a special guardian under section 113A of the Oranga Tamariki Act. Their guardianship will continue until the child turns 18 (unless, before then, the person enters a civil union type arrangement).

• Any person whose sole guardianship of a person is as the result of section 119 the Oranga Tamariki Act (about the death of a guardian appointed under section 110(1)(e) of that Act). This provision mirrors paragraph (b) of the current definition of a CYPFA guardian.

We consider that this would be consistent with our recommendation that foster parents who have committed to a long-term care arrangement should be able to enrol a child in KiwiSaver.

Clause 4 of the bill as introduced would insert section 35(4A) to allow a person who is 16 or 17 years old and in foster care to be enrolled in KiwiSaver if they and 1 of their foster parents or kin carers jointly contract directly with a KiwiSaver provider.

Clause 4 would also insert section 35(4B), in addition to existing settings, to allow a person under the age of 16 and in foster care to be enrolled in KiwiSaver if 1 of their foster parents or kin carers contracts directly with a KiwiSaver provider. The bill does not define the terms “foster parent”, “kin carer”, or “in foster care”. While the terms were not defined, we understand that the intention of the bill was to authorise foster parents or kin carers to obtain birth certificates and IRD numbers for the purposes of opening a KiwiSaver account under a court-ordered care plan.

We recommend several amendments to make clear the care arrangements that would enable a person to enrol a child in KiwiSaver. We recommend inserting clause 4(1), to replace section 35(3) of the Act. Our amendment would provide that a 16- or 17-year-old could opt in to KiwiSaver if they and their guardian or an Oranga Tamariki guardian jointly contract with a provider.

We recommend inserting clause 4(2) to replace section 35(5). This would replace references to “foster care”, “foster parents or kin carers”, and “CYPFA guardians” with “Oranga Tamariki guardians”. This would enable a person under the age of 16 to be enrolled in KiwiSaver if one of their Oranga Tamariki guardians contracts directly with a provider.

Accordingly, we also recommend inserting clause 4(3), amending section 35(6). This would replace all references to “CYPFA guardian” with “Oranga Tamariki guardian”. This would extend the power to make non-enrolment membership-related decisions on behalf of a child in their care to Oranga Tamariki guardians.

We recommend amending the title of the bill. This would reflect our recommendation that the scope of the bill be more tightly defined.

The proposed new title for the bill is the “KiwiSaver (Oranga Tamariki Guardians) Amendment Bill”.

We consider that some allowance should be made for KiwiSaver scheme providers to transition to this new legislation. We recommend inserting clause 6, new section 241, to allow time for providers to comply with product disclosure requirements and update their internal processes and staff training.

Our amendment would give KiwiSaver scheme providers four months’ transitional relief from non-compliance with product disclosure requirements and two months’ relief from other legislative non-compliance. We note that previous changes to the KiwiSaver Act have contained such provisions.

We were pleased to hear from Oranga Tamariki that it planned to improve internal systems and communications that will make it easier for caregivers to enrol a child in their care if they wish to.

We recommend that Oranga Tamariki should also explore the collation of data in regards to guardians and carers.

National members are concerned that the original intent of the legislation will not be achieved, in that foster parents with children in their care are not able to enrol them in KiwiSaver.

National members accept that there will be 500 more children that will have the opportunity to open a KiwiSaver account, approved in their name. However, we are still concerned that the bill does not achieve the original intent.

Oranga Tamariki states in the second sentence under the heading “Benefit of approach proposed in departmental report” that: “the purpose of the bill is to empower foster parents to enrol a child in Kiwisaver without having to obtain the consent of other guardians”.

The bill was always intended to provide a pathway for foster parents to enrol a child in their care in KiwiSaver whose only existing guardian was the CEO of Oranga Tamariki, and the evidence to date was there was no effective pathway to that CEO. Experience with trying to get a social worker to carry that application to the CEO, which is the current route, has proven fruitless.

The member in charge of the bill, Hamish Walker, stated the example of a specific foster child. This child has been in the foster parents’ care for several years, and they have been going through the process of becoming legal guardians. The foster parents have also been fighting Oranga Tamariki for over three years to get their foster child enrolled in a KiwiSaver Scheme. That child will not benefit from this bill as amended by this select committee. The bill as amended will not provide the required pathway.

National members were very pleased to see the future improvements to the internal systems that Oranga Tamariki plans to make.