Reform NZ Child Support Legislation for Fairness

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We have a serious issue in New Zealand that’s been put on ice for the last few years, child support legislation that’s punitive in nature, fails to take into account the unique circumstances of individual parents, is not in the best interests of the children it’s intended for and often pushes non-custodial parents and their families into financial hardship.

Current legislation arose from a reform of the Child Support Act, broadening the assessment criteria scope with the intent of introducing fairness into the formula calculation. In practice the opposite occurred, with the scheme increasing considerably in complexity, not accurately reflecting the complex nature of separation (and child care arrangements, along with the lengthy process to agree child care arrangements) and often having a punitive effect on the paying parent.
 
The following list represents a number of challenges with the Child Support Amendment Act 2013 which the then National government brought into force, which include:

  1. The formula calculation is complex and difficult to understand without the help of the Child support – liability/entitlement calculator (which in itself is complex to complete). It’s often difficult as a paying parent to understand actual liability until a notice of assessment is produced through IRD.
  2. While a child’s cost of care is seen to grow as a paying parent’s income increases, a paying parents living allowance does not, the inflation adjustments haven’t reflected actual increases in living cost. For example, the current rate $19,585 per annum isn’t representative of a living wage in Auckland (which in 2018 was calculated at $20.55 per hour by the Living Wage Movement, or $39k per annum based on a 40 hour working week).
  3. There is limited recognition of a paying parents new family arrangements, dependents and financial circumstances other than through administrative review (while the review grounds are public, the assessment guidance used to reach a determination isn’t published).
  4. Following on from point #3, often there is a dependence on administrative reviews with unclear policy guidelines to handle complex care arrangements, i.e. where paying parents contribute costs above the assessment liability. Instead it is left to the review officer to exercise discretion in their determination.
  5. The scheme is administered by the IRD with the responsible Minister being the Minister of Revenue, which represents a conflict of interest in terms of best outcomes for the child and family concerned (both custodial and non-custodial), as the Minister of Revenue’s principal goal is to maintain integrity of the NZ tax system.
  6. IRD treats Child Support collected as a cost recovery exercise, offsetting receiving parents benefits through WINZ rather than directly benefitting the children it’s intended for. Contrast this to receiving parents in work, who receive the full entitlement. In work non-custodial parents are therefore double taxed!
  7. Large interest bearing debts are often accumulated as paying parents grapple with the size of the liability placed upon them.

 
Non-custodial parents must hold a degree of financial responsibility for the children they bring into the world, however this responsibility MUST be in the best interests of the child’s ongoing care, development and upbringing, MUST maintain strength of the relationship between the non-custodial parent and child, MUSTN’T be punitive, MUSTN’T be treated as cost recovery by the government.
 
This petition advocates the Minister of Revenue, the Hon. Stuart Nash take action towards the development of a simpler system of child support, one which is progressive, capped at a certain rate per non-custodial parent, where non-custodial parent living allowances are recognised at a living wage and inflation adjusted and which the children realise the full benefit of without WINZ intervention.