The New Zealand Government has introduced regulatory changes intended to make it easier for parents to open bank accounts on behalf of their children.
Under the revised approach, parents may only need to present a birth certificate when opening a child’s bank account, provided the account is deemed low risk.
Currently, anti-money laundering (AML) rules require parents to submit various documents verifying their child's identity and their authority to act on the child’s behalf. These rules also mandate that banks gather information about the account’s intended purpose, conduct risk assessments, and carry out continuous monitoring.
New exemptions for low-risk accounts
Under the changes, financial institutions will be permitted to adopt streamlined due diligence processes in cases where the risk of money laundering is considered minimal. A representative from the Ministry of Justice explained that if banks impose certain restrictions, such as transaction limits, ongoing monitoring can be reduced or suspended. The obligation to collect details about the account's nature and purpose may also be waived.
Officials indicated that a birth certificate could suffice for verifying a child’s name, date of birth, and parental relationship in these low-risk scenarios. Full AML measures would only apply once the account’s settings change, such as when restrictions are lifted upon the child reaching adulthood.
Public hearings on the Government’s proposed Regulatory Standards Bill took place before the Finance and Expenditure Select Committee, drawing significant criticism. Legal experts and advocacy groups questioned the bill’s practicality and purpose. A legal scholar described it as unusually complex, warning it would impose excessive administrative burdens. A spokesperson for the Iwi Chairs Forum described the legislation as concentrating power among a select few.
Separately, officials also announced revisions to the FamilyBoost early childhood subsidy scheme, aiming to expand eligibility and improve participation rates. The rebate cap will rise from 25% to 40% of weekly childcare fees, while the income limit for qualifying families will increase from USD 180,000 to USD 229,000.
