NZ Herald 5 August 2023

AI’ve seen bitter fights within whanau about this issue. There are two ways you can look at the situation:

• The parent of one child feels that their family got less than the parent of two children.
• But is it fair for the cousin in the single-child family to get more than the other two cousins?

I think the second argument is stronger — although some will disagree with me.

There’s another issue that sometimes arises too. What if, after the grandparent dies, one of their children produces more offspring? The new babies will miss out.

The grandparent, when making their will, might think, “All my kids have finished their families”. But what happens if, say, your 60-year-old son’s marriage ends, through divorce or death, and he enters a new relationship with a much younger woman, and they produce more kids?

My suggestion is to make the legacies in these situations small — perhaps a few thousand dollars. Then the parents can probably give the same amount to children born after the grandparent’s death.

Also, if the amounts are small, people are less likely to get upset about, “Your family got more than mine!”

Come on, everyone. Surely family bonds are more important than that stuff.

AThanks for this. I certainly know of 12-step programmes — most notably Alcoholics Anonymous. They work well for many people. But I didn’t know there was one for people having problems with debt.

The Debtors Anonymous website says, “Is your life unmanageable because of debt? Are you sick of bouncing checks, paying late fees, and having creditors knocking at your door? Debtors Anonymous offers hope for people whose use of unsecured debt causes problems and suffering in their lives and the lives of others.”

Debtors Anonymous currently runs two weekly Zoom meetings in New Zealand. For the Monday evening meeting see here and for the Thursday evening one see here.

AIf everyone who made a bad financial decision was embarrassed, we would all be walking around red-faced. Besides, there were no alarm bells jangling as I read your letter.

On the KiwiSaver versus mortgage choice, I recommend trying to do both.

Ideally, put in 3 per cent of your pay if you are an employee, so you get the employer and government contributions. If you’re not an employee, or if you really can’t afford 3 per cent plus mortgage payments, go on a savings suspension but put in $87 a month, paid directly to your provider. This will get you the maximum government contribution of $521 a year.

Why do this? In KiwiSaver, because of the government and employer contributions, the return you get over the years is higher than on other investments of a comparable risk, including a house. It’s a real pity to miss out on that.

However, beyond contributing the minimum to KiwiSaver to get all the perks, if you have a mortgage it’s a good idea to put all your other savings into paying down the loan as fast as possible.

In your situation, then, I suggest you join KiwiSaver — or restart your contributions. You’re on good pay, so I’m hoping you can make that happen. That will let you build up some cash for retirement.

On your home, I don’t see any reason to sell it at this stage. Assuming that you prefer to own your own place, your best to stay in the house market.

When you retire — or sooner if it suits you — you could look into moving into a cheaper home so you can be mortgage-free, and hopefully have some cash to add to your savings. It might be an apartment or a smaller home, or it might be a similar house to your current one that is cheaper simply because it’s further from downtown.

Later in retirement you could look into a reverse mortgage, to make use of some of the equity in your home. I’ve written lots about this over the last few months.

I’m not keen on your daughter becoming a part owner of your home. At just 21, she might well find in a few years she wants to use her savings for setting up a business, further education, travel or buying a home of her own.

AOkay, the battle with your provider is on! Inland Revenue confirms what I said last week. The legislation “makes the fact the member made the contribution after they turned 65 irrelevant as long as:

• “The contribution was made on or before 30 June; and
• “Their KiwiSaver membership was still active at the time they made the contribution.”

The IR spokesperson also says it’s the provider’s job to tell Inland Revenue who is eligible for a government contribution.

“If by the time someone made the extra contribution, their provider had already made a final government contribution claim for them, then the provider should have filed a revised claim to include the extra contribution. IR would then recalculate their government contribution and pay any additional amount to their provider.”

It’s not too late. “Assuming they are still a member, their scheme can still file a revised claim for a member at any time (including in subsequent years),” she says.

Time to get back to your provider, perhaps showing them this Q&A. If you’re not happy with their response, contact their disputes resolution scheme. They have to tell you who that is. The disputes scheme is entirely separate from your provider and its services are free to you.

After this is resolved, I agree that it might be time to switch to another provider. Do let us know how this goes.

AIt seems I was too harsh on the bakery that a reader complained about last week.

The bakery had charged him 27 cents extra on a $10 purchase of a pie and a sausage roll, which he bought with a contactless card. I quoted the Commerce Commission’s website as saying that, while the payment fees that businesses pay vary, many payment service providers “offer rates of 0.7 per cent for contactless debit card transactions and 1.5 per cent to 2 per cent for domestic credit card transactions.”

The reader had paid 2.7 per cent, which I called “suspiciously high”. But your letter suggests that charge might simply reflect the cost to the business when a customer uses a contactless card. Perhaps the Commerce Commission needs to change its advice.

Apologies to that unnamed bakery, and other businesses in similar situations.

Readers might want to note that the Commerce Commission also says every business must offer at least one fee-free way to pay — often by cash or inserting or swiping a debit or EFTPOS card.

AThere’s good news. “Sharesies is currently building out another payments service to offer a cheaper alternative for instant payments,” says a spokeperson.

“But our overall strategy is to encourage people to use the free bank transfer service where they can.

“For those who want to use a card for instant top up or purchasing gifts, we charge 18¢, plus 2.65 per cent (this is based on the different rates charged by the card providers). We always show the fee that you’ll be charged before you confirm a card top up.”

She adds that “Fees differ on each investment platform, but what we charge is in a similar range to those of other providers.”