Child Support in New Zealand was set up to pay for the care of any children where the parents have separated. However, Child Support in New Zealand is implemented very very badly and is unfair. It is designed to prosecute anyone who has separated and has children, even if they are sharing the care and already paying for at least half of the children's requirements.
Here are some issues with the current scheme:
Child Support can be applied for by anyone who has a child and has separated from the other parent.
Applications are always accepted regardless of whatever agreement has been made previously by the parents, even if it has been drawn up by Lawyers and signed by both parties. The agreement is meaningless to the Inland Revenue Department and they will ignore it.
This creates an economic incentive for the lower earning parent. Parents should have the option to contract out of the Child Support regime and the Inland Revenue Department needs to acknowledge a signed agreement as the current arrangement and not accept an application for child support where such an agreement is in place.
Where the parents have shared (approx. 50/50) care of the child or children, the Inland Revenue Department should not allow money to be extracted from the higher earning parent when both parents are working, especially when the higher earning parent has the child/children for slightly more of the time. It does not cost one parent more than the other parent to bring up a child.
Where the parents have shared (approx. 50/50) care of the child or children, then expenses are already split equally.
If the paying parent ends up having the child for the majority of a period (by arrangement), the money they have paid the other parent cannot be re-cooped from the Inland Revenue Department for that period, instead they will need to ask the other parent for a refund on that period. Like that's going to happen, when the other parent has deliberately applied to the Inland Revenue Department.
Upon separation, all monies and possessions are split equally which means both parents are on the same ground financially to start with.
The environment for the child at each house is now also equal therefore income should not be used as a basis for child support payments as the environment that the child grew up in previously is no longer available. The amount of money spent on the child pre separation is irrelevant now. Parents have new expenses, debt and mortgages to fund now.
The Care of Children Act 2004 states "Child's welfare and best interests to be paramount". If this is followed and a shared parenting arrangement is in place, then the Inland Revenue Department will ignore that and accept a child support application from either parent. The Child Support Act conflicts with the Care of Children Act
Where the parents have shared (approx. 50/50) care of the child or children, both parents are treated as paying parents and the difference in calculation is paid to the lower earning parent. However, since both parents are classed as paying parents, they should both have to follow the same rules. The Inland Revenue Department states in its letter to each parent how much money will appear in their bank account on a certain date from the other parent. This does not happen for the higher earning parent and is a good example of the Inland Revenue Department not following their own procedure. The online system also states what money is owed by the lower earning parent to the higher earning parent but this money is never collected. Payments are to be made on time and penalties are to be applied to either parent when payments are missed. Why should one parent have to hold the responsibility of paying on time when the other parent can just sit back and reap in the money?
Children do find out what is going on and that one parent is paying money against their will to the other parent. This does have an effect on the child and creates tension in the relationship between the child and also the other parent.
The receiving parent is never held accountable as to how the money is spent. Even if the receiving parent was spending some of that money on the child, there will always be surplus since it does not cost a percentage of a parent's income to bring up a child. This surplus can then be spent by the receiving parent on themselves. Why should the paying parent partially fund the lifestyle of the receiving parent?
The amount payable is worked out through a formula based on income. For solo care, the rate is 18% and for shared care it is 12%. This rate is applied on the pre-tax income amount meaning that the actual amount taken is higher than those ratios. The shared care ratio should also be half that of solo care since the child is only there for half of the time.
Child Support can be cancelled if an IRD107 form is completed. This form can be done online or on paper. The webpage for this form states "If you want to stop receiving child support under a formula assessment you need to complete the IR107 form. You can also complete this online." It is reasonably expected that both forms will be identical and do the same thing. There is an option on both the online and paper forms indicating what is to happen to any outstanding amounts owed. One of the options states "There is no outstanding child support owed by the paying parent."
If you choose this option on the online form, the IRD WILL NOT honour the selection and write off the outstanding amount EVEN THOUGH THE IRD HAS BEEN ASKED TO! Their excuse is that the online form is wrong and that a signature is required to action it, however this information is NOWHERE on that form. If you choose this option on the paper form, it will be honoured.
A lot of the Child Support policies are neither just nor equitable!
Questions that IRD cannot answer about Child Support
The goal of child support is to "ensure that parents take financial responsibility for their children when marriages and relationships end".
It is also designed for "sitations where parents are unable or unwilling to make private arangements for the financial support of their children."
1) Since the goal of child support is to provide for a child where "parents are unable or unwilling to make private arangements", why does the IRD not honour private agrements that have been drawn up? Just because one parent decides they can extract more money through the child support system is not grounds for accepting a child support application from them.
2) If you have shared care, the IRD cannot explain why they are extracting a calculated amount from you which is over and above the amount it costs you to bring up your child for the same period.
It does not cost one parent more than the other parent to support a child when everything is being shared.
3) Why is it the role of the higher earning parent to provide financial support for the child for the vast majority of the time? This parent is supporting their child when they are with them and also for a good percentage of the time when they are not.
If a working parent receiving child support cannot support their child through their own means, then they should reduce the time spent with the child.
Child support is a culture of misinformation and obfuscation which allows women to live without accountability or responsibility for their behaviour and without accountability for the consequences for those children involved.
Family First New Zealand also have some very good points on the matter.
At the moment Child Support is automatically assessed on all non-custodial parents, even those divorced over their objections and who lose their children through no legal fault or agreement of their own. A parent can lose their child/ren and their property and earnings without fault.
While it takes two to marry and to create a child, it takes only one to divorce or walk away. The spouse that divorces or violates the marriage contract through adultery or desertion incurs no liability for the costs or consequences - this creates a legal anomaly - the only of its kind. In all other areas of contract law, those who break a contract are expected to compensate the other party. Under 'no fault' divorce, this doesn't happen.
Child Support effectively designates an active present parent as "absent". It can indirectly create an economic incentive to separate. Child support is about the continued welfare and upkeep of the child - not funding the lifestyle of the adult.
Forced expropriations under the name of 'Child Support' must be debated. The precise purpose of Child Support has never been made clear or publicly debated. Most people assume it is for parents who have abandoned their children. It was certainly never intended to subsidise the removal of children from living, innocent parents who want the family to stay intact.
Child Support should be strongly targeted at parents who abandon their responsibility or who are proved to be unsuitable to care for the children e.g. domestic violence, sexual, physical and psychological abuse - not at those who wish to maintain their responsibilities related to raising their own children.