Foster children face financial handicaps
By the time they turn 24, people placed in foster care during their childhood earn around half the incomes of those who were not.
Figures presented by Oranga Tamariki to Parliament show the average total income at age 24, for someone born in 1991 or 1992, of people who experienced a care placement was $19,000, compared with $33,000 for someone who had not.
Just a quarter of the 24-yearolds from those birth years who had been in foster homes earned
$25,000 or more, compared with 60 per cent of those who had not experienced a placement.
The figures, published on Parliament’s website on Friday, were given to MPs who must decide whether to pass a law allowing foster parents to open KiwiSaver accounts for foster children in a bid to give them a better financial start in life.
The KiwiSaver (Foster Parents Opting in for Children in their Care) private member’s bill was the brainchild of Simplicity KiwiSaver founder Sam Stubbs, but was introduced by National MP Hamish Walker.
Should the bill turn into law, Simplicity would set up a KiwiSaver account for every foster child in New Zealand who wants one, waiving all administration, membership, trustee and custodial fees for at least the first five years.
Currently, the chief executive of the Ministry of Social Development must approve the opening of a KiwiSaver account for a child in foster care, and should a foster parent ask Oranga Tamariki for permission to enrol a child in KiwiSaver, it can assist, though Inland Revenue said that had not yet happened.
Oranga Tamariki opposes the bill.
Only caregivers who are guardians under the Oranga Tamariki act should have the power to enrol their young charges in KiwiSaver, the agency said.
The government agency will have an increasing focus on helping children who experience a care placement get a better financial footing.
‘‘Financial advice and assistance to young people as they prepare to transition from care to independence, and through to the age of 25, is an important feature of the Oranga Tamariki (National Care Standards and Related Matters) Regulations 2018 that come into force on July 1, 2018,’’ Inland Revenue told MPs.
‘‘The ministry will also develop guidance for staff for dealing with financial matters for children and young people who are in care,’’ it told MPs.
While there was a $1000 ‘‘kickstarter’’ for every new KiwiSaver opened, Oranga Tamariki opened accounts for all children in its care but when the National government removed the kickstarter in 2015, it stopped doing so.
Stubbs believed foster children deserved the same chance to have a KiwiSaver account as other children.
‘‘The problem was brought to our attention last year by Megan Barclay, a foster mum, who had been frustrated at trying for years to open a KiwiSaver account for foster children in her care,’’ he said.
The average total income at age 24 for someone born in 1991 or 1992 for people who experienced a care placement was $19,000, compared with $33,000 for someone who had not.