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Sun 13th May 2012

How to workout your child support for 2013

Filed under: General — Scrap_The_CSA @ 1:09 pm

Get ready Mums and Dads this is how child tax will be caculated in 2013 and as a result many of you are about to get done over by these changes.

How to workout your child support for 2013
Summary of key steps in determining child support payable for a particular child

Step 1: Work out each parent’s child support income amount (section 32). This is the parent’s taxable income plus adjustments to take into account a number of other forms of “income” (section 33), less:
– a living allowance (section 34);
– any allowance for other dependent children (section 35); and
– any allowance for other children from other relationships (referred to as child support groups) for whom the parent is paying child support (section 36)

↓
Step 2: Work out the parents’ combined child support income
↓
Step 3: Work out each parent’s income percentage (section 31)
↓
Step 4: Work out each parent’s and non-parent carer’s percentage of care for the child
↓
Step 5: Work out each parent’s and non-parent carer’s care cost percentage for the child (section 16 and schedule 1) that relates to their care percentage
↓
Step 6: For each parent, subtract their care cost percentage from their income percentage (section 18). If the answer is positive (i.e. the income percentage exceeds the care cost percentage), the parent is a liable parent. If the answer is negative, (i.e. the income percentage is less than the care cost percentage), the parent is a receiving carer
↓
Step 7: Work out the expenditure for the child using the child expenditure table (section 36D), taking into account the combined child support income amounts of the parents, the number of children in the child’s child support group; and the age of those children. This expenditure amount is divided by the number of children in the child support group to get a per child amount
↓
Step 8: The annual rate of child support payable by the parent for the child is worked out using the formula (section 29):
(parent’s income percentage – parent’s care cost percentage) x expenditure on the child
↓
Step 9: The amount that a carer receives is determined in sections 36A-C. A receiving parent receives an amount calculated applying the formula in step 8, based on their income and care cost percentages. If this is less than the amount that the liable parent pays, the balance is split between any other receiving carers
↓
Step 10: When a parent is paying child support for more than one child support group, the amount may be capped. If the amount calculated at step 8 is more than the amount calculated under the multi-group cap (section 29), the multi-group cap amount applies. This cap ensures the liability is no more than it would be if all the children from the various child support groups were living together
↓
Step 11: The amount payable may also be subject to minimum annual rate (section 30)

Dont worry, like any efficent tax they will be deducting at source and we all know IRD never get it wrong.

Regards

Scrap

47 Responses to “How to workout your child support for 2013”

  1. Gosh I Owe Lots says:

    except this hasn’t all come into being yet, has it?

  2. Down Under says:

    Question Scrap….

    What about if the mother is on the DPB with say two children and her oldest child is
    a. from different relationship and is living with the father or
    b. the oldest child elects to live with the father

    Would the Domestic Purposes Benefit be considered income and have child support deducted in the same manner as the unemployment benefit is considered income and has child support deducted?

  3. Scrap_The_CSA says:

    Gosh , its in the bill before the House. It will come into being.

  4. Ford says:

    now that the upper qualifying age is 18 i have less than 2 years to go for child extortion payments

  5. Scrap_The_CSA says:

    Down Under,

    I hace not had time to read all the documents fully.

    Scrap

  6. Scrap_The_CSA says:

    Congratulations Ford,

    Still getting done over for at least the next 2 years.

    Scrap

  7. Ford says:

    its been a long haul scrap

  8. Down Under says:

    @ Ford. Age 18 if your child is working. If you have a child in the 7th who turns 18 at the beginning of the year or your child is a polytech you will still pay child support until they reach age 19.

  9. Ford says:

    #8..i do expect to go the full distance and i also expect to be hit hard in the last 12 mths

  10. Down Under says:

    @ Ford. Age 18 if your child is working. If you have a child in the 7th form – year 13 – who turns 18 at the beginning of the year or your child is at polytech or university you will still pay child support until they reach age 19.
    Effectively the only thing I can see changing with the alteration of the age is that if your child is working less than 30 hours a week and still living not living independently it reduces that liability by 1 year.
    With the broadening of ‘the carer’ to a ‘non parent’ I would then see a payer becoming liable to some other person say a relative if that person attends an educational facility in another place.

  11. John Dutchie says:

    Reply to all…

    If this bill goes through, there are going to be a lot of people that going to be truly crucified to hell…This is so damn scary …

    In my circumstances all what I can say …..Thank goodness that my kids are now strong and vibrant…independent young adults…

    I say with genuine sincerity…. I truly feel for you people….

    Kind regards John Dutchie Free at long last

  12. Ford says:

    #10..it gets very confusing to say the least..ill just have to wait and see what happens

  13. Ford says:

    #11..i live a life of celibacy..i now know how a monk feels..lol..damn blisters

  14. John Dutchie says:

    Reply to Ford#13

    L.O.L…Been there to Ford…As in a ‘monk’,and as in the ‘blisters’ too…But on a serious note Ford,for quite a number of years now, I have totally lost any sexual attraction to western European women…I have no ‘desire’ at all for them…

    But as in for ‘Asian’ women…Just lets say… That’s a totally different story…wink…wink….

    Kind regards…. John Dutchie …Free at long last

  15. Ford says:

    #14..being anywhere in the vicinty of western European women is like playing russian roulette with a machine gun

  16. John Dutchie says:

    Reply to Ford#15

    L.M.A.O…Bloody hell Ford…Your one liners, pack one hell of a punch …

  17. Ford says:

    i wouldnt touch then with someone elses cock

  18. Mits says:

    Hi Scrap. Thanks for the info
    Im still going through it and trying to get a handle on what the likely outcome will be.
    I’ll bet dollars to donuts that the end result is an increase in my liability to pay child tax.
    I havnt heard much from the normal vocal feminists about this including of the other parents income, which has created some foreboding that Im missing something here that I should have seen.
    Am I missing something here that if the mummy claiming has 2 children and the daddy owing has two from a new relationship and in the unlikely event of them both having exactly the same income levels then no child tax would be liable.
    Rest assured I will spend some time looking over the info you have provided and you have my thanks for this.
    Mits

  19. Ford says:

    #18..not only will they take more $$$..theyll take your donuts too

  20. Mits says:

    Of that Ford I have no doubt, Dunne Nuthin isnt about to be the IRD minister who reduced the tax take
    All the rhetoric I have ever heard about child tax and making it fair blah blah blah being more transparent blah assisting NCPs to engage with responsibility blah…. on and on, it only ever goes up
    And I noticed that this latest effort has the obligatory changing of all the terms and descriptions so IRD and the legal snouts can show their superior knowledge and understanding of the system if you inadvertantly use an incorrect term
    Calling it “support” is still a farce
    Mits

  21. John Dutchie says:

    Reply to Mits #20

    Your comment Mits ‘Calling it ‘support’ is still a farce’…Beg to differ with you good sir..It should be called what it really is …’Government theft by pure deceit ‘

    Kind regards John Dutchie …Free at long last

  22. Ford says:

    i feel for any young man or any man for that matter that has separated with very young children

  23. Mits says:

    Actually I should clear up one thing wrong with my post
    As my ex finally got her lazy ass off the DPB when she hooked up with another poor sod she no longer gets the DPB so in reality Im not paying child tax as such, more like, disgruntled Ex spousal support to assist in her lifestyle choices.
    Whether any of it gets to the kids is only at her discretion and whim
    Its only the twats receiving it that insist it’s support with something to do with children.
    Tax or spousal support, the “child’ bit is a guilt trip and a salve to the recipients of it
    Mits

  24. Gosh I Owe Lots says:

    I can’t see the maximums going up – that would lose the government too many votes. And if you’re paying near-enough 15K for one child, it’ll be too hard for the government to justify increasinjg that.
    But I can see the minimums going up, and more pressure to collect from us dead-beats. Maybe even the percentages so that mid-rangers pay more too.
    I am cetainly convinced the total cs tax-take won’t reduce.

  25. Ford says:

    #24..it dosent really matter if the govt puts the maximums up..the next govt will still take it

  26. Scrap_The_CSA says:

    Gosh,

    Its a tax, once in placce it will be ratcheted up. Look at the previous list of “improvements’ to the CSA, all those ammendments that were going to imporove child tax blew the alleged debt out to $2.3b. Any drop will be short term overtime it will increase, yearly it will go up as guesstimates are adjusted.

    One can only guess at the outcomes as the guessemaites of the cost of rasing children dont seem to be available. Kind of Kills the debate without the figures.

    You may be a deadbeat dont assume others are.

  27. Kelvin Dunn says:

    All very interesting and good to have it a little more widely publicised for those who were unaware of the fact that this formula was in the IRDs Commentary on the Child Support Amendment Bill first published and publicly available in October 2011.
    As it stands, the formula gives rise to more questions than it answers, particularly since IRD will not divulge what figures they will be using as the “estimated cost of raising a child” at certain age groups and will not clarify how the age limit rules will be applied in defined circumstances. The Bill has had its first Reading and will, undoubtedly, in the near future receive Royal Assent and become Law. But even without figures it is clear that the end result will be far more disadvantageous to liable fathers than is currently the case and will result in greater incidences of delinquent payment. BE AFRAID. BE VERY AFRAID!!!!

  28. Mits says:

    I absolutely hate with a passion the term “deadbeat dad”
    I pay all the govt mandated tax, I also have paid above this for my kids.
    Ive been in arrears in the past and have paid off the penalties incurred or infreguently had them remitted, not due to any action or inaction on my part but rather IRD incompetance to manage their own system.
    who hasnt spent time waiting for ages on the phone waiting for IRD CS to answer?
    But deadbeat? No sorry I wont accept that term until mainstream media come up with the equivalent term for the other side of the equation
    I agree Scrap with what you say, “its a Tax” of course its going to be racheted up.
    As there is no hard and fast rule for the cost of raising children this is just another rort under the guise of “child support”
    what a crock
    Mits

  29. Scrap_The_CSA says:

    Kelvin,

    Agree, the formula is going to be a mine field.The guesstimates for 2013 is crucial for an informed debate. The true impact can only be assessed when guesstimates are on the table. However, that said I dont disagree with your conclusion.

    Mits, yes its an offensive term, a fabrication of the child tax colledtor mythology.As Murray Bacon pointed out its hard t0 debunk myths as they tend to endure dispite being false. It attacks the person, not the merit of the claim being made.

  30. Down Under says:

    This piece of legislation is being hailed in parliament as a miracle for 214,000 children, but is designed to isolate and attack a small number of people with a significant amount of money.

  31. Gosh I Owe Lots says:

    Scrap_The_CSA
    You misinterpret. I’m not personally a deadbeat. I pay close to the maximum for one child. I speak collectively of all of us as being deadbeats – if we were’nt, and we were all paying our dues, then they wouldn’t be out to reduce the massive arrears.
    As it is, its one thing to assess
    (1) a beneficiary on say 15K, currently assessed for maybe $75/month,
    vs (2) a midranger on 50K, owever some $6300 per annum,
    vs (3) a highranger on maybe 100K, owing some 15K per annum,
    Their question is twofold:
    (a) how to correctly and fairly assess CS, taking care-arrangements and mothers income into account;
    and (b) how to ensure it is paid on time, and doesn’t accrue arrears.

    On the first question, however they jig it, the total CS tax take will increase – that’s a given, at least for those mothers whom the government is supporting (ie beneficiaries including family living allowances). To that end, the Government is in cost recovery mode.
    The government knows it can’t simply increase the maximum and decide (arbitrarily) that it costs e.g. 20K to raise the child. That would see CS (assessed on roughly 85K out of a 100K income) rise to around 23-24%. They can’t justify that. Part of Dunne’s research has already assessed the actual cost of raising a child at a figure not dissimilar to the current 15K maximum.
    And for those mere mortals that can do maths, knowing that for each additional dollar earned,
    – 30c is tax;
    – 18c is child support;
    – 4c will soon be kiwisaver;
    – 12c will soon be student loan repayments;
    That leaves only 36c into the pocket (and the government will get at least 5c of that back in GST).

    So they will hit the mid-rangers harder to enforce they are assessed to the max (18% abover the 15K threshhold) and then do everything they can to ensure that that is paid.

  32. Scrap_The_CSA says:

    Gosh,

    You forgot ACC Levies.

    SCrap

  33. Kelvin says:

    Scrap

    As you say, until the IRDs assumptions on the cost of raising children at different age groups is divulged none of us can accurately calculate our future liability. I suspect that is one of the reasons why they are being intransigent. Knowledge is power after all!
    Nevertheless, and while I haven’t reminded myself of the contents of the earlier papers it may be that informed assumptions can still be drawn from them. These changes have nothing to do with the welfare and best interests of children but to reduce the drain on the public purse: liable fathers will pay more and that will further offset the various benefits received by custodial mothers.
    I urge all those affected to obtain a copy of the IRDs commentary on the Child Support Bill. It makes worrisome reading and highlights how much worse we will all be under the new formula. Small business owners in particular will be very hard hit and it is highly likely that a significant number will find it more advantageous to wind up the business and get a job stacking shelves in Countdown!!
    A lesser considered issue is the fact that the IRD will assess liability on the actual position regarding care arrangements if that is different from what is provided for in a parenting order. So, for example, if a liable father has a Parenting Order that gives the children 28% of time with him (or any other % above that)but the custodial mother frustrates compliance with the Order the IRD will increase his assessment as the Order is not being followed in practice. IRD will not adjudicate on the fact that the mother is frustrating the Order. The father will have to return to the Family Court to enforce the Order. I am sure I do not have to lay out what the implications of that are!!! S
    Section 15(5) of the Child Support Bill also has sinister implications in that it provides the IRD Commissioner with powers to consider a number of other factors that will affect CS liability e.g. about how the responsibility for decisions about the child is shared; who is responsible for taking the child to and from school and supervising leisure activities; how decisions about the education or health of a child are made; the financial arrangments for the child’s “material support” (whatever that means!); which parent pays what expenses for the child.It seems therefore that IRD will assume powers that are currently the preserve of the Family Court but their decisons will be purely financially focussed (not that the FC make any decisions that truly reflect childrens’ welfare and best interests).
    I could go on. But I have made myself depressed!!! YOU HAVE BEEN WARNED!!!!!

  34. Ford says:

    well the govt with a zero budget i guess they have to get the money from somewhere

  35. Mark says:

    I have just been for an assessment review. My ex partner took me to IRD where we previously had a private agreement and I was paying twice the required amount under this arrangement. I could no longer afford to do so so cut it back. This is where she went to IRD. So go the meeting… The review officer was a plonker and started asking me what my book value of my chattels were in my business (as you know it is not taken into account). Got the decision this week. He has disregarded my living allowance even though we have been separated for some 8 years. He disgregarded that we have one child full time with us. (not mine but my new partners). Did not take the right tax year for my income to be basded on. So now where does this leave me. Now IRD have ruled that my living situation has changed from 1 April and I am assessed as single.. Maybe now we can apply for the working for families tax credit as a single (my partner) person… Plus he backdated it to 1 April 2012 even though it was IRD up to this point who told me what to pay….. Not to mention that she wouldnt supply financial information for the meeting. Paid her over $500,000 when my liability was only $100K . Left her with all the contents of our home. mmmmm

  36. Good mum says:

    All the complaining about having to pay – seriously guys there are plenty of dads out there who are ripping off their kids! My ex (paying father) has tried every year to get out of paying child support. Yes I have full time work so yes I have my own income But it’s considerably less than his, however i contribute a much higher percentage of my income to the children’s costs than he does. He formed a company & said he would not be giving himself a salary so reduced his child support to minimum until I pointed out he was still an employee where he worked so even if he could be legally deemed a contractor, if all the company’s income was from the employer then personal services attribution rules apply & all company income is his liable income! He even told the IRD that he would have plenty of money in the company to pay his bills when they asked how he would live on no salary – dumb ass! So was assessed back up – $7000 a year for two kids who attend private school where the school fees alone are over $8000 a year so no there is no supporting my lifestyle out of that when you add uniforms, school costs let alone food, sports & everything else. So now he has quit his job & bought a business (though says he has no money) & well & behold he will not be earning any income from his company but his girlfriend will clearly Getting the salary allocation as he telling the kids he is going to earn about twice as much in the business than he did working – but his child support is now only the minimum. I ask you how Is that fair? He has NEVER paid a cent more than IRD have assessed him for & constantly defaults on that. Yet he buys the kids expensive gifts constantly which they are not allowed to bring home while I maybe forced to withdraw them from their school as I can’t afford everything on my own. He is a pig! Full credit to those paying parents who accept kids are not free & help out, equally I say shame on those mothers too lazy to get a job & bludge of government & ex baby daddy’s. But there are fathers out there who constantly rip their kids off & that sucks – mine included

  37. Hans Laven says:

    Good mum (#36): I have seldom heard any complaining about ‘having to pay’. The complaints are about financially-crippling so-called ‘child support’ orders under our system, unfair assessments based on some review officer’s fantasy about what a man earns or should be able to earn, and so forth. Much of these extorted funds generally goes towards the mother’s lifestyle or to reimburse the government for its family-wrecking DPB system that also exists to fund mothers’ lifestyles without reciprocal obligation towards the paying parent.

    Sure, some fathers will organize their finances in order to reduce their so-called ‘child support’. But really, if the system were fair, reasonable and focused on increasing the welfare of our nation’s children, few fathers would object.

    Our system should allow child support to be provided directly by the paying parent to the children. For example, if dad takes the children to buy their clothing, school books etc this would enhance their father-child bonding, help the children to feel loved and supported by their dad and contribute to their confident development into adulthood. However, under the current system that dad will be given no credit for his ‘voluntary expenditure’ on his children and most dads simply cannot afford to do much directly for their children after having 35 to 40% of their after-tax income taken from them for the mother’s benefit. The current system effectively hides fathers’ financial contribution to children by channelling it through the mother whom the children then associate with the caring and provision resulting from that money.

    In your case, your children’s father clearly remains involved in their lives and buys them gifts yet you describe him as a “pig” for not giving YOU more money. Not what I would describe as being a ‘good mum’ and I would be concerned that your nasty attitude will be conveyed to your children to damage their relationship with their father. Many questions arise from your statement. For example, whose decision is it to send and to keep sending the children to an expensive private school? Whose decision is it that the children stay primarily with you and that he is the one who has to pay his ex-partner, rather than equal shared-care in which the children get to enjoy each parent’s separate lifestyle and both parents have equal opportunity to forward themselves financially to their children’s ultimate benefit? Why do you believe that you continue to have the right to dictate how your children’s father manages his finances, when I’m sure you would consider it ‘male power and control’ if he tried to dictate your life in that way? What have you done to try to work out an arrangement that he sees as fair in contributing to the children’s needs, rather than using violent coercion by the state to make him pay YOU?

    Our so-called ‘child support’ system is a modern form of slavery, forcing men to pay for women’s upkeep when those men have about the same lifestyle costs if they want to accommodate their children and to maintain a meaningful role in their upbringing.

  38. Ford says:

    #36..i love sharing what i have with my kids..i hate having to give my money to the govt because the x dictates i do it that way and she does that by applying for CS even though i spend all my spare money on my kids.on one hand she dictates i pay CS and on the other she complains and expects me to contribute directly..why should i do both..afterall thats what CS is for..dont forget men need to have a life as well and its not all about the x and the kids..he has to take care of himself as well..if i want my kids around i still need to have a house to put them up..feed and clothe them when she wont supply me yet she receives CS..im on the understanding if the woman receives CS and/or the DPB she has to supply for the visitations to the dads place..but women being the selfish vindictive creatures they are, they dont do that because they want to make it harder for him..gives them something else to moan about..creating their own issues where if they helped a little there would’nt be any issues and seems you expect him to pay for all your expensive choices..pay for them yourself

  39. Skeptic says:

    #36
    ‘Good’ Mom, this site is for promoting a clearer understanding of men’s experience, not for unsubstantiated male bashing.
    Calling someone a pig is dehumanizing. It demonstrates to me abundantly how you view your ex husband as less than human. That’s very telling.
    I can see therefore why faced with such vitriolic dehumanizing alienation he would be perfectly justified in not wanting to pay you a single cent.
    Why would he want to finance and further empower you emotionally abusing him after all?
    I notice when he gets to spend money on his children directly giving them “expensive gifts” rather than being forcefully garnished through the state and you working in misandric collusion, then he is very generous.
    He therefore appears to me to be a generous father, rather than the scrooge-like pig you abusively characterize him to be.
    I fear for your children with an attitude like that!

  40. Kelly says:

    Can someone explain to me why under the new proposed formula, when ‘other dependant’ children are taken into account for a parent, there is an assumption that the parent with the other dependant children is assumed to have 100% costs associated in raising those children and therefore gets 100% of the ‘expenditure for raising children matrix cost’ associated to those dependant children deducted from their gross income on top of the living allowance before their income is combined with the separated parent. This is totally unfair when the ‘other dependant’ children being added to the deduction clearly have another parent financially responsible for them???? Do they not??? This has the effect that by having more babies in a new relationship and getting 100% of the expenditure for those new babies deducted from their total income before it is combined with the ex’s income for the child of the broken relationship will unfairly reduce their percentage share of the combined total going towards the child being calculated for. If the new formula is considering the incomes of both parents and their percentage make ups of this combined total to work out each parents percentage share of the expenditure of their children then why for any other dependant children any of the parents have in new relationships are they entitled to 100% of the expenditure associated to them!! Arghh who writes these policy’s, there is no equality! It once again makes for a totally unfair situation for the parent who chooses to work full time and not have any more dependant children while the lifestyle choices of the other parent having more children further reduces their percentage share by them obtaining 100% of the expenditure for their new children!!!! Why after you end a relationship should the choice of your ex having more children end up costing you financially through the child support formula, yet you had no say or choice let alone sperm/eggs responsible in the mix of those new children!

  41. Kev says:

    hmmm I’m looking forward to the changes folks as I have my kids 1/2 the school holidays and 5 nights per fortnight and just fall under the 40% currently. I did an admin review but my circumstances didn’t meet “special circumstances” under the IRD precedents either

    I’m looking forward to having some spare spending money to spend on the kids after investing $40,000 in debt to have good access through the court system as their mother decided after 3 years that they had a new “father figure” and a “new family home” to quote her

    I think the new system is fairer and kids need to spend quality time with both their parents to enrich their life’s and after all they are only young once folks

    k

  42. Allan Harvey says:

    Hi Kev,
    I don’t know what ground you applied for your admin review under but ground 5 is open to you on the information above. That is high “costs of contact” and if you spent 40K with lawyers then you are likely to have a great case. You do need to spend more than 5% of your gross earnings before the high costs are considered but after that it is up to the review officer and I have seen some give dollar for dollar relief and some down to 1 dollar relief for every $20 spent.

  43. Kev says:

    Thanks Alan
    I did 4 grounds (can’t remember which ones) and the IRD review officer decided that $40,000 was not out of the ordinary and it didn’t met the special circumstance criteria based on other cases. They also referred to my court judgement which stated the legal costs are to lie where they lay as my ex self represented herself. Therefore I’m looked forward to April 2014!
    cheers

  44. Allan Harvey says:

    Hi Kev,
    Send me your decision by e-mail (allan.harvey@xtra.co.nz) and I will comment to you.
    I know IRD say these decisions are confidential but they know I have a large collection and I have it from senior authority that they are relaxed about that and have no concerns for my advocacy on behalf of parents with Child Support issues.
    What you say above goes against a lot of prior precedents and if that is what the review officer based their decision on then they are on extremely thin ice.
    Manukau office who have taken over Admin Reviews since Christchurch earthquakes wiped out their building there may take a different view. There certainly has been a different tone to administrative matters since things have moved north. However I would look forward to them wanting to take action against me if they wished to be so stupid.
    Allan

  45. Devo says:

    Can anyone answer this question please, With regarding to the new Child support laws starting 1st of April 2014. If I’m earning $18,000-$20,000 per year and my ex is earning $60,000 per year and looking after our one child more than 80% of the time does that mean I’m looking at an assement of $80,000 combined incomes less my $15,000ish single mans living allowance leaving me paying 18% of $65,000 ?? That’s around $11,700 per year !! More than 60% of my current income !! If this is the case does anyone have a good strong rope ?? Thanks.

  46. By the new calculator $73 per month

  47. Allan Harvey says:

    Devo,
    That is what is called the statutory minimum.
    Allan

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