Grandparents will have the opportunity to help secure the future of their grandkids as part of a re-elected Liberal and Nationals plan to futureproof the finances of a whole generation through Kids Future Fund accounts.
NSW Premier, Dominic Perrottet, said this would give grandparents the opportunity to give their grandkids a head start in life.
“We know that grandparents want the best for their grandchildren, which is why we’re giving them the opportunity to help set their grandkids up financially for the future,” Mr Perrottet said.
“Through the Kids Future Fund, grandparents will be able to partner with parents to make contributions to their children’s future and help change the lives of the next generation of kids across NSW.
“For some kids in NSW, there could be up to six adults contributing to their fund, making small investments over time to grow their wealth and help secure their financial future.”
Deputy Premier and Minister for Regional NSW, Paul Toole, said even a small contribution could help grandparents build a sizeable nest egg for their grandkids over time.
“Nothing brings greater joy to a grandparent than seeing their grandkids grow up and knowing they’ve got what they need. Any money they chip in to their grandkids’ Future Fund will grow right along with them, setting them up for the future,” Mr Toole said.
“Plenty of us remember getting cash inside a birthday card from gran or pop. Getting a nest egg that could help set you up to buy your first home or train for your first job is a gift with lasting impact.”
Treasurer, Matt Kean, said enabling grandparents to contribute to the Kids Future Fund would help bolster their grandchild’s wealth and help them on the path to financial security.
“A small cash birthday or Christmas present placed in the fund would deliver big dividends down the track,” Mr Kean said. “This initiative will help build financial security for a whole new generation.”
As part of the Kids Future Fund, parents and grandparents together will be able to contribute up to $1,000 annually to each fund.
The Kids Future Fund:
- Each account will receive an initial $400 contribution provided by the Government when it is created.
- Each year, the child’s parents (or grandparents) will be able to contribute up to $1,000 per year to the account. The Government will match these contributions up to $400 per year until the child turns 18.
- If parents (or grandparents) make a contribution of $400 each year, alongside the Government’s co-contribution, the fund is expected to be around $28,500 by the time the child turns 18.
- If parents (or grandparents) contribute the maximum amount of $1,000 per year, the fund is expected to be around $49,000.
- For families receiving Commonwealth Family Tax Benefit A, the Government will automatically contribute $200 a year to the child’s account without requiring a matched contribution from parents (or grandparents).
- If the parents (or grandparents) also contribute $200 each year, the Government will match this with an additional $200.
- Contributions can be made to the fund after the child turns 18, however the Government will not provide any further matched contributions.
- When the child turns 18 they will be able to draw down on the fund for only two purposes:
- Housing – e.g. a contribution towards purchasing a residential property
- Education – e.g. textbooks and other learning materials, laptops, private tuition fees, micro-credentials, tools required for getting a qualification
- The fund will be open for children aged up to 10 years old (in the 2023 calendar year). From 2024, new accounts will only be created for newborns.
- There are around 974,000 babies and children aged up to 10 years old in NSW in 2023.
- There are around 100,000 babies born in NSW each year.
