Fincap, the organisation that represents financial mentors around the country, has made the proposal to the Finance and Expenditure Committee.
Photo:
Financial mentors say organisations that benefit from their services should be willing to pay a levy.
Fincap, the organisation that represents financial mentors around the country, has made the proposal to the Finance and Expenditure Committee.
Forty-four financial mentor services lost funding in the latest round and Fincap spokesperson Jake Lilley said they are increasingly having to ask staff to take pay cuts or work as volunteers to be able to continue operating.
“We’ve had a lot close,” he told RNZ’s Nine to Noon.
He said it was a concern that the industry was also losing experienced people who knew how to navigate the complex situations that clients would seek help with.
But demand for their services has increased, and Lilley says many organisations rely on their services, including KiwiSaver providers who often suggest people making a hardship application seek help from a mentor.
Lilley said while financial services providers would have their own hardship teams, there were usually limits to what it was appropriate for them to discuss with clients. Financial mentors could look at people’s situations as a whole.
“You can get into a situation where the loudest creditor is the one who is paid when someone hasn’t got the assistance to look at the situation as a whole.”
He said some mentors said it took eight hours of their time to help a client with a KiwiSaver hardship withdrawal application.
Telecommunications and power companies also benefited from mentors’ work, he said.
David Baines, of Christchurch’s Kingdom Resources services, said his organisation lost funding in 2024.
“We were in a situation where government funding provided about 80 percent of our total income.” he said.
Of 11 staff, two became volunteers and four reduced their income, he said. But he said Kingdom Resources still received referrals from government agencies, even though funding had been stopped.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
