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Wed 18th August 2004

Minister claims Child Support Act based on sound principles.

Filed under: Child Support — Scrap_The_CSA @ 4:08 pm

On July 28 David Cunliff delivered an address to the Child Support National Worksop.

My response to David Cunliff’s speech is in italics

What is clear is that the advice Mr Cunliff receives is very different from the reality of the experiences of Parents and Children subjected to the Chilod Support Act 1991.

Hon David Cunliffe
28 July 2004

Address to Child Support National Workshop

We all have something in common. We all have jobs where our clients have pretty much decided they don’t like us before they come to us. They come to us at difficult times. At times of stress. And we tend to hear from people when something is going wrong, or they disagree with a decision that has been taken. Not much correspondence comes through my office that congratulates me on a decision or policy.

I don’t get a lot of letters saying that the writer has just had an interaction with our department where the staff were helpful, that the decisions were fair and that the system is based on sound principles. In light of that is can be easy to forget the basic truth that in child support I know staff want to be as helpful as possible, that the level of payment is fair and that the system is based on sound principles.

Its all very well preaching this erroneous information to the to the converted. Spin doctoring does not change fact.

I challenge David Cunliffe to debate with me the fairness of the Child Support Act and the soundness of its principles. I have spent extensive time working with parents subjected to the current Child Support Regime. I can produce real people to back up the mountain of issues experienced by parents affected by this Act. I have extensive knowledge of NZ and International child Support Law and systems.

The reality is that the Act is based on flawed principles that have lost any vestige of credibility that proponents of this unfair and draconian Child Support Regime claim.

Overall, we have a basically sound piece of legislation in place. It needs some updating, which I will discuss later but it is basically sound. That means that it is up to those that administer the legislation to do so in a manner that is consistent and fair, and with a customer focus

They can administer it fairly or consistently but it does not change the fact that the Child Support Act 1991 is fundamentally flawed. The hundreds of millions of debt point to the underlying problems with a “simple formula” that stems from an Act. The Act is all about benefit recovery and not about supporting children.

The figures show that you are doing this. Customer satisfaction survey results have shown an increasing level of overall satisfaction with Child Support’s service, with levels increasing from 65% in 2003 to 69% in 2004.

Not the whole story. Ask them about the other 21%. The department has written them off, placed them in the category that you can never please them.

Stop calling us customers David. It’s a compulsory scheme I am not a customer I am a prisoner of the formula assessment, serving a 19year term of forced payment for being a separated parent

Inland Revenue has lifted its game in operational performance since the Finance and Expenditure Committee review when the department was opened up to critical scrutiny on its performance in a number of areas. I was a part of that committee as it followed up on the recommended changes to Inland Revenue’s culture and I have seen a perceptible shift in attitudes over that period. There have been significant improvements brought about by a strong leadership team and with this a performance culture that is recognised in the community.

The change in Child Support Culture has to be even more draconian in collecting so called Child Support. It comes back to the fundamental flaws of trying to use one size fits all formula for calculating child supports. The current model is an abject failure and that reflects in the administration.

Staff passion has been a very important part of these improvements and the ongoing success of the Child Support programme. It is important for staff to enjoy what they do and to remember that you are making a real and positive difference to the lives of many New Zealanders. As I said above, because of the nature of the feedback we all get it can be easy to forget that.

The theme of this workshop is “outside in”. This is about seeing the system the way both custodians and paying parents, your customers, do. I will now discuss what some of those perceptions are.

Working with people when they are most vulnerable means that there is a need for sensitivity as well as being straightforward in discussing their obligations with them. We also need to recognise that the first interactions over child support are likely to be at a very difficult time, for example, when parents first split up, when they are dealing with issues around access to their children. They may also be living off a benefit and trying to make ends meet. It isn’t enjoyable dealing with a bureaucratic process at the best of times but having to do so when under the pressures some of your clients are under is a recipe for stress. It is therefore crucially important that clients are treated with the sensitivity and respect for their emotional and practical circumstances.

And this hasn’t been said every meeting with them for the last 3 years? Same message every time and three years on they still perform the same! I suspect that hell would freeze over before I could get the same answer from any IRD child support staff member. The Act is what the agency administers, problems with the administration stem back to the fundamental flaws of the Child Support Act

At the same time the aim of any child support system is to have a high level of compliance so that parents can meet their financial obligations to their children. As administrators and policymakers we need to understand the issues that stand in the way of people complying with the system. What are some of these issues?

Only one issue here: Its all about money for benefit recovery, money that does not go to children but to the State. “financial obligations to their children” show me how the system contributes to my financial obligations to my children. If you think that you take money from one parent at an exorbitant rate and pay it to another parent and that’s child support you should really analyze how much of that money is used to support the child.

I regularly receive correspondence from both custodial and non-custodial parents. These letters give me an indication of some of the issues for customers. The most frequent types of complaints that I see coming through my office relate to:
The administration of the Reciprocal Agreement with Australia
The collection of child support being too slow (from custodial parents)
Child support being too high and/or legislation being unfair Try Number One on the list!
Shared custody issues and service
Administrative Reviews result being unfair or the process being too inflexible
Formula components
The child being financially independent
Enforcement actions being too harsh
And penalties being unfair.

The Child Support Act is fundamentally flawed. Tinkering with the Act will not resolve this. Building on a rotten crumbling foundation will only result in further problems. Consistently they change the act and the complaints increase!

These complaints may or may not have substance to them when investigated further. However the general nature of the complaints does give an idea of where more focus needs to be in providing a satisfactory service to customers.

Service to customers. It’s a compulsory scheme I am not a customer I am a prisoner of the formula assessment, serving a 19year term for being a separated parent. Given this that’s another 15 years to pursue my interests in child support law reform. We will get the political reform required to achieve a fair and reasonable child support system that works in the best interest of both parents and children.

You will be aware of the Men’s Convoy that travelled through the country earlier this year. A number of their issues are similar to the ones I hear through my office. Some of these include inflexibility of the formula assessment — that it is a ‘one size fits all’ approach; a view that the living allowance doesn’t take into account the cost of access for paying parents, or that they may have other commitments such as student loans; they are concerned that there is no accountability that money collected actually goes to support the child. They generally believe that that the system is designed to favour the custodian at the expense of the paying parent and child.

Study of the Australian Act, on which this Act is modeled, clearly indicates that Horizontal and Vertical equity (a measure used by economists) in that Act favors the custodial parent.

Lets not forget for a long time we have watched the system and I have been collecting logitudinal dat for 5 years. It’s all about favoring the custodian because the Act is biased in the custodian’s favor. This is at the expense of parent and child, real parents and real children.

This group has also highlighted the increasing child support debt situation and see this as a result of child support being assessed at unaffordable levels.

If it was affordable why would over $800 million be owed? Why would such a huge number of Liable Parents be debt? I work with parents every week who are financially crippled by this legislation.

One of the main issues for custodians who have contacted me has been the need for information about the collection of their child support entitlement. I understand that it is sometimes difficult to reconcile the custodian’s rights to information with the paying parent’s right to privacy. However, I have heard about examples where staff are taking an overly cautious approach and have not provided all the information that they are legally entitled to receive in the first instance. We need to find a way to ensure that we are better meeting all those competing needs.

So lets take no caution and pass information that will be passed onto the other parent? What information? Your statement of financial means? Your contact details?

With this information where do we propose to go from here?

Some of the complaints we get will not be addressed by any change to the system. They arise from a misunderstanding of the basic principles of the child support system.

My understanding of the basic principals of this of the child support system are clear, it has nothing to do with supporting children. Most of the money ends up in the States Coffers, or with the custodial parent, not the child

For example, I understand the frustration of someone who may be struggling to make ends meet and be paying to support a child in a situation where the custodial parent is in a new relationship with someone on a high income. However, the principle remains that the non-custodial parent is still responsible for his or her own child.

Thank you for agreeing with reformers “the principle remains that the non-custodial parent is still responsible for his or her own child.” We are not responsible for any state-funded benefit your government chooses to pay to the custodial parent. This Act is focused on Benefit Recovery, read the objects, read all expert opinion and it’s about benefit recovery not about supporting our children.

There may be a role here for clearer communication of the underlying principles of the Child Support Act.

Clearer communication is a euphemism for propaganda.The CSA social marketing campgain has alreaduy begun, the reponse is comming!

However, there are some issues that need to be addressed. The Government is proposing a package of incentives and disincentives designed to lift compliance, reduce debt and improve the flexibility of the system. This will be done mostly though legislative change that will be going through the House this year.

Overall, the package of changes aims to get more financial support to children and families by ensuring that paying parents pay the child support they are assessed to pay.

No interest in anything but compliance and collection and benefit recovery! Now they are telling me that Child Support aims to get more financial support to children and families. Why families, surely child support is about supporting your children, not your children’s custodial family? What about your role as a liable parent, surely you are his family also!

Child Support debt has been growing at an increasing rate. In the last year (to 30 June 2004) paying persons debt grew by 15% to $825 million. This unacceptable growth in debt is, in good part, due to the inflexibility around the penalties regime. This growth rate is neither sustainable nor necessary. The package of changes we are working together on, combined with your efforts will address this.

For the payment of core debt, we are proposing to write off a portion of the penalties that have accrued on the debt. This helps to get people back on track with their payments and helps to make sure that those who have taken a head in the sand approach to their mounting debt can get back to making regular payments. It will bring liable parents back into the system and reduce unsustainable debt becoming a barrier between parents and their children.

We are extending some of the exemptions for child support to recognise that in some situations it is unrealistic to expect a person to earn any income in order to meet child support payments. These exemptions include long- term prison inmates, hospital patients and children under 16 who become parents and who have no reliable income source.

So if you’re a sexual abuse victim and you have to pay child support. Its OK well make it all right by letting you adjust to the fact that once you reach 16, your abuser will have a legal right, given them by the State, to collect at least 18% of your income till the child conceived from this abuse is 19

To offer a balanced package we’re going to toughen up in some areas for paying parents who continue with other non-compliant behaviour. I want to make clear that this package is anything but “soft on delinquent liable parents”.

Lets punish parents harder, keep them compliant by threat of the use of the oppressive state apparatus. Over half the liable parents are “delinquent.” Every time politicians tinker with this Act the situation worsens.. Parents are driven to depression and danger of suicide by this system and they want to get more draconian!

There have been increasing numbers of “international evasions” with more people moving overseas permanently who have child support obligations. We know of 7019 liable parents who have moved overseas. This represents an increase of 54% from 4550 living overseas in June 2001. Of the 7019 people overseas, almost 5000 of them have a child support debt.

You were told that this would be the result of removing the cap on income at the select committee. When you amended, yet again, this flawed piece of legislation.

Why do you continue to rely on such poor policy advice from your officials?

We’re looking at ways to increase the collections the Australians make for us through our reciprocal agreement. The message is that fleeing the country won’t be a way out. We want to make sure more paying parents in Australia meet their obligations to their children. My main aim is for a seamless trans-Tasman child support system that means there is nowhere to hide.

In this case it will be interesting to see the outcome of a planned legal challenge to the status of the Reciprocal Agreement in Australia and New Zealand (Constitution and Bill of Rights) Keep watching the updates.

We’re also looking at some changes around how we deal with paying parents with sizable debts looking to head overseas. People have been stopped at the border in the past and we’re giving consideration to whether the threshold to trigger and/or the system for managing these interventions should change.

We’re looking at giving the Commissioner of Revenue more ability to investigate a paying parent’s financial situation if a parent’s child support liability doesn’t reflect their ability to pay. For example, someone in business with strong cash flows, but who pays him or herself a very low salary; or someone with very high assets and an unusually low cash income.

Like the structures the politicians have? Have they not realized that one day soon some of their key proponents of this draconian child support regieme will be “out-ed” as their structures and incomes are analyzed so that it is clear that their message is “do as we say not as we do!”

This year’s budget contains additional operational funding of $4.25m for Child Support to allow a substantial increase in the amount of debt work carried out, including targeting of debt owed by child support payers living in Australia. It will also allow for more targeted education for all new paying parents to improve future compliance.

And why is it that NZ parents are forced to deal with the Australian CSA to negotiate repayment of their debt. Why are NZ parents subjected to Australian Courts and Agencies?Mind you that’s Ok because Australian CSA will tell you that you must deal with NZ and NZ will tell you that you must deal with Australia.

The expectation is that this investment will significantly reduce the levels of debt owed and increase the level of voluntary compliance among new customers.

Get some good advice, non-compliance is a reality that is going to grow as a result of your failure to address the fundamental deficiencies and inequity of the Child Support Act 1991.

As some of you will be aware we have enhanced our cooperation with the Australian Child Support Agency. Following from a meeting held between Australian and New Zealand officials in May this year, both countries have agreed to exchange all cases with each other. To date Australia has sent us a total of 3300 cases and New Zealand has sent over a total of 4100 cases.

Both organisations are also working on a plan to improve security of web interfaces so that information can be exchanged more quickly and easily between us.

Border control issues have also formed part of these considerations. Our Australian counterparts have agreed to work with us to place Departure Prohibition Orders on New Zealand paying parents where a case has been exchanged for collection and will also consider placing these orders on paying parents that New Zealand has been unable to seek an arrest warrant for.

We are also talking with Customs and the Police to enhance our ability to track and stop non-compliant paying parents from leaving the country.

What next special “Child Support Internment or Re-education camps. ”? I’m a non-compliant paying parent. I’m non-compliant because I pay what IRD tell me to pay and that’s wrong. Because of following the instructions of IRD as to what to pay will I be denied the ability to leave New Zealand?

I believe that, with your help, these changes will take us a long way to having a seamless Trans-Tasman operation.

As you can see there are a number of excellent initiatives in place to build on the good work already being undertaken by Child Support.

In the long-term I want to reflect further on client and operational feedback to consider whether further service performance improvements are possible, and I encourage you to use the opportunities you get from your day to day interactions to make further improvements to the service you provide. I look forward to receiving, through the department, any thoughts you may have on future potential improvements.

The success of the Child Support programme depends on the commitment and passion of the IRD team. You can all take some responsibility for the many gains we have made in providing an outstanding service for our customers

As I said at the beginning, our roles have some similarities. As a Minister what keeps me motivated is a hope that if I do a good job my work can have a positive effect on people.

As a father, I know that there is nothing more important than providing for the wellbeing — emotional, physical and financial — of all our children. Your role is the crucial, the more you can do to provide an exceptional service the more likely it is that children will be getting the child support they need.

This Act has nothing to do with supporting children. You know this! The Act was put in place to increase the level of money recovered to offset the payment of benefits like the DPB.

I hope that you will take immense satisfaction from that. I want, on behalf of the Government, and the public we represent, to thank you most sincerely for your tireless efforts.

Thank you all.

Friends please respond to this ultimatim from Mr Cunliff. Post your comments below.
Regards

Scrap_The_ CSA

5 Responses to “Minister claims Child Support Act based on sound principles.”

  1. Mark Shipman says:

    Customer: (noun) a person or organisation who brings their custom of their own volition.

    I am a Dad with three children. The IRD penalise me 27% (that’s what the formula says) to "support my children".

    During the three and one half years I have thrown away over $50,000 in payments to my children’s mother. I am now in a poition where I may be forced to stop seeing my children because I will be unable to maintain an environment that allows them to visit with me.

    How is it my children benefit from not seeing their Dad?

  2. David Perry says:

    I am a father of two, divorced two years, my ex-wife recently quit her $50,000 per year job and went on the DPB (how is that allowed??)and then the IRD started to demand Child Support. I am now in financial ruin and can’t even afford to do anything with my children. I have them 45% of the time yet still have to pay $477 per month to the IRD. For what exactly?? I’ve decided to pay no more, it’s just wrong. I had an agreement previously with my ex-wife which worked very well, she was happy, my children were happy and I was happy, now my relationship with my ex-wife is very bad and my children are suffering. I have mountains of debt and I hold the present government accountable.

  3. Mark Shipman says:

    David [Cunliffe],

    I hope we may call you that as you seem to know all of us so well.

    I too hope you will gain "immense satisfaction" from the fact that you are raping and pillaging the very people whom you represent. I, personally, would have trouble sleeping at night if I were being that unethical and insensitive.

    How many more innocent Fathers need to jump off a bridge before you will notice the decline in the tax take that pays your exorbitant salary and supports all of your perks?

    How many more children will no longer have a Dad before you start putting the children first? After all, that is what "CHILD support" is for, is it not?

    How many more Fathers will you sentence to decades in penury while you lavish in decadence that is at complete odds with your socialist beliefs in "Wealth Redistribution"?

    There are some roses in this prosaic piece, David – I suggest you wake up and smell them before your decadence is a thing of the past.

    Failure to perform means failure at the next election. “Upstairs for thinking; downstairs for dancing” – time to stop dancing, David.

  4. Alan says:

    Drat

    I wish I knew about this forum earlier.
    I have just stepped out of virtually 19 years of this punitive system of additional tax collection, and it has cost me 2 children, such was the dependence on hiding behind the judicial system/IRD my ex wife had. Not to mention the cost on my new family.

    Mercifully, my new wife and I are still together after 16 years of marriage, but the IRD and this punitive system to recover costs has been the biggest strain on the marriage.
    I live in the provinces, with an good paying job,but the child support whacked me into the 55%+ plus of my entire wages. I would bet another months Child Support my ex wife hasn’t done anything with the $900 per month she got in the last 2 years to further assist my son financially over the next few years.
    Child Support for the PAYE earner is a cheap cop for the Govt.
    Yours (was frustrated)
    Alan

  5. Mark Shipman says:

    You may enjoy thinking about this one, David…

    “This time you’ve gone too FAR!,
    Shut your mouth!
    And know what you are.”
    (Peter Gabriel)

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