KEY POINTS:
The Government has admitted inconsistencies with the system for child support payments and says it hopes to come up with a new formula next year.
Revenue Minister Peter Dunne said many liable parents considered the current assessment of child support to be "unfair" and it was timely to
reassess the formula, he said.
The system needed to be more responsive to the complexities of shared care, the income levels of both parents and the costs of raising children.
"These are the most commonly identified areas of concern of the many people who write to me and to other MPs about their child support problems," he said in a statement today.
The standard formula for assessing the amount of child support payable by a liable parent was straight-forward and in most cases provided certainty for both parents, he said.
"However, it is based solely on the economic circumstances of the liable parent and his or her ability to provide financial support for the child involved.
"It does not take into account the income of the principal carer of the child.
"Nor does the formula take into account all the parental circumstances surrounding the aged care of children and the associated costs of raising them, and at different ages."
Many liable parents said they incurred considerable costs in providing for their children during often significant periods of contact, but those costs were not recognised under the current formula.
"Some say those costs affect their ability to make the child support payments required of them, placing strain on other financial commitments.
"Ultimately, however, both parents are responsible for supporting their children and it is the child's interests that must predominate."
Mr Dunne said he had asked officials to examine options for a better formula.
Under the current scheme, to share care "substantially equally" a liable parent must care for a child for at least 40 per cent of nights - or if less, prove that he or she meets the shared care test in other specified ways.
That was one of the most contentious features of the scheme, Mr Dunne said.
To make things easier, the wording of the definition could be changed so that parents who do not meet the 40 per cent of nights test but undertake significant care on a daily basis can have the associated costs recognised.
That is one option. Another is to reduced the shared care threshold from 40 per cent of nights, allowing a greater number of liable parents to benefit and pay less in child support.
"A third and more fundamental option than changing the shared care provisions is to adopt an approach that takes account of both parents' income as well as the costs of raising children.
"Such an approach has recently been adopted in Australia and is in use in Norway and part of the United States."
Mr Dunne said he hoped by next year the Government would be able to put forward some soundly based proposals for improving the system.
- NZPA