Cannot pair Apple Watch, receive message “ the apple id on this iphone is not eligible to create an icloud family”?

Hi there,

I was trying to setup a family sharing for my son and daughter. I have created family sharing under my Apple ID. My Apple ID is also setup with two step authentication. However, when I tried to pair, after click “set up for a family member”, a message pop up says “the Apple ID on this iPhone is not eligible to creat an iCloud family”. I tried to reset my iPhone, check wifi connection, turn off all other Bluetooth device. None works.

I am using iPhone 14, IOS 17, for Apple Watch 9. I even tried with my wife’s iPhone and with her Apple ID, the error message still pop up the same.

has anyone experienced the same? appreciate any advice.

lala