Disappointment at delays in child support system changes

By Kate Shuttleworth

File photo / Getty Images
File photo / Getty Images

Fathers paying child support are disappointed changes to New Zealand's child support system set to be in place by April 1 have been delayed a year.

The biggest changes to the child support system in more than 20 years have been held back by the social services select committee to allow the Inland Revenue Department time to make changes due to a new calculation formula being used.

Changes to the Child Support Amendment Bill include the formula for calculating child support payments to include both parents' income and changes to payment, penalties and debt write-off.

Debt from unpaid child support sits at $2.6 billion and 60 per cent of that is from overdue penalty payments.

According to the New Zealand Institute of Charter Accountants the effective annual rate of late payment penalties is 36.8 per cent in the first year of non-payment.

Revenue Minister Peter Dunne said the current system focused too heavily on penalties and people were not coming forward to IRD to make payments.

"What happens is people get behind in their payments and they incur interest and penalties and the figures get to be very huge and they drop out of the system because it becomes all too difficult,'' said Mr Dunne.

Father of two Scott Lewis said it wasn't good enough to have to wait for the changes to come into place.

"It's not fair from where I'm sitting''.

He has shared custody of his two children with his ex-wife. He has care of his children half of the time and pays $700 a week in child support payments.

New Zealand had a mutual agreement with Australia for child support payment cases and the law would make it easier to deal with unpaid child support.

"We are updating the scheme to fit today's social realities,'' Mr Dunne said.

The changes will bring New Zealand in line with Australian policy.

New Zealander Paul Jenkins killed himself in Australia last year after receiving a demand for over $53,000 of child support arrears relating to his daughter from a previous relationship.

IRD used its powers to request the Australian Child Support Services Agency to collect the outstanding debt.

Labour MP David Cunliffe said the National Party had been working on the issue for 10 years and should have tackled child poverty when looking at child support.

"Despite all of the time the Government has failed to provide an improved system that is transparent, fair and flexible and that will address the situation of the 133,000 kids growing up in poverty in single-parent families, most of whom are dependent upon child support,'' he said.

The bill is awaiting its third reading.

- APNZ

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf04 at 29 Dec 2014 20:48:37 Processing Time: 465ms