Child Support . . .
• When parents no longer live together in a relationship and one of them (or another person) is caring for their children, the parent not having the children in their care can be assessed to pay financial assistance to help provide for the children’s needs.
• The Child Support Act 1991 (the Act) was enacted to ensure a child’s right to be supported by their parents and affirm the parent’s obligations to support their children.
• A person caring for the child is defined as a receiving carer and the parent paying support as the liable parent. A receiving carer can be a parent or a non-parent carer.
How New Zealand Child Support works . . .
• In New Zealand the assessment and collection of child support is regulated by the Child Support Act 1991, this Act is administered by the Department of Inland Revenue (IRD).
• The Child Support (Reciprocal Agreement with Australia) Orders 2000 allows New Zealand and Australia child support authorities to assist each other with the collection of child support.
• If a paying parent with a New Zealand assessment lives in Australia, initially they deal with IRD. However, if payments get behind, collection can be referred to the Australian Child Support Agency (CSA) which is part of the Department of Human Services.
Different ways to pay child support . . .
• Direct between parents or carers by private arrangement. This option is available to receiving carers who are not getting a government benefit.
• Or through IRD by either formula assessment or voluntary agreement, where IRD will administer the collection of child support.
• Formula assessment: A formula assessment is where a receiving carer lodges a child support application with IRD, who calculate the level of payment to be made by the paying parent, collect the payment and pay it out to the receiving parent.
• Voluntary agreement: A Voluntary agreement can be put in place where the parents/carer agree on the amount to be paid towards providing for the children’s needs and want IRD to collect and pay out the amount.
Collection of Child Support . . .
• Child support for each month an assessment is in place is required to be paid to IRD by the 20th of the following month, what has been collected is paid out to the receiving parent on the 7th of the next month.
• Example: Child support for May is due to be paid to IRD by the 20th of June, the amount will be paid to the receiving carer on 07 July.
How do I apply for child support? . . .
• You will need to complete an IR101 Application to assess child support if you are a parent of the children.
• If you are a non-parent carer you complete an IR954 Application to assess child support by a non-parent carer.
• Parents agreeing the amount child support to be paid would, if criteria are met, complete an IR102 Registration of Voluntary Agreement for child support and attach their written agreement if they want IRD to collect child support.
• Completed forms are sent to IRD and will be accepted from the day the form is received, provided all information required is supplied as requested.
Receiving child support while on a benefit . . .
• The Child Support Act stipulates that any receiving carer in receipt of a sole parent benefit (with exceptions) or an unsupported child’s benefit for the child in care must lodge a child support application with IRD if there is no good reason for them not to.
• When a receiving carer is getting a benefit, any child support collected will be used to offset the monthly benefit already received by the receiving carer.
• Effectively, the government is paying the receiving carer their child support entitlement in advance by way of benefit so they have funds to look after your children. Once the assessed amount is received from the liable parent the amount received by the carer is paid back to the government.
Examples to show how payments are allocated:
1) If the receiving carer gets $1000 of benefit payments in a month and the liable parent is assessed to pay $1000 a month. The full amount will be used to offset (pay back) the benefit received by the receiving carer.
2) If the receiving carer received $1000 of benefit payments in a month and the paying parent is assessed to pay $500 a month. The full amount received from the liable parent is paid back to the government to offset the amount of benefit already paid to the receiving carer. This ensures the receiving carer receives funds to help care for your children.
3) If the receiving carer gets $1000 of benefit payments in a month and the liable parent is assessed to pay $2000 a month the payment will be split. $1000 will be paid back to the government to offset the benefit received, and the remaining $1000 will be paid to the receiving carer.
How are child support payments calculated?. . .
• For a formula assessment Inland Revenue uses a standard calculation to work out which parent pays child support (liable parent) and which carer receives it (receiving carer), and to decide how much child support needs to be paid.
IRD has a calculator for you to use if you have all information required.
Living allowance. . .
• This is an amount deducted from a parent’s gross (before tax) income figure prior to the calculation of child support to be paid. It’s not meant to be an amount the parent is expected to live on, it is a figure set annually by the government which is not included in the calculation of child support.
• Living allowances vary depending on the type of income being received.
• For example: If a parent has a living allowance of $ 19,359.00, gross income of $372 a week is not counted when assessing your child support payments.
Recognised care. . .
• Where a parent has more than 28% of care, that can be taken into account when the formula assessment is calculated.
• The care percentage increases with the amount of care provided
Penalties. . .
• Penalties are charged on child support not received by IRD by the due date. Penalties are not paid to the carer.
Deductions of Child Support. . .
• Can be voluntarily made from a liable parent’s income while child support is being paid by the due date.
• Liable parents in receipt of a benefit will have their child support payments deducted from their benefits.
• If a liable parent fall into arrears they lose the ability to choose if deductions are made from their wages, and IRD can instruct an employer to make deductions or recover payments from other sources.
Exemptions. . .
• May be put in place where a liable parent is in prison, a hospital inmate or under 16 years of age provided certain criteria are met.
• A receiving carer can request a review of a liable parent’s exemption.