Child Support Debt
The politicians have a field day slaging off parents who owe money to Inland Revenue for Child Support. Who are these “deadbeat dads” these “irresponsible parents”? I’d like to introduce you too some of them. I’ll let you judge if it’s the dads that are deadbeat or the Child Support Act 1991 and its administration by Inland Revenue that creates the problem.
For about six years I have been recording data on the parents who have come to me with Child Support issues.There are two recurrent themes, Debt and administrative reviews.
This is the first of a series of articles that looks at how parents get into debt with IRD.
John was in his forties and had a child support debt; this debt was a result of changes made to the Child Support Act in 2000 when assessment was shifted from being based on your earnings from two years ago to being estimated on your current earnings.
To do this IRD had to take your income figures to December and extrapolate this through to 31 March of the following year. If you received more income than expected for the period the figures would be adjusted in June/July and a reassessment notice issued. If you have the spare money (and how many separated parents do?) you can pay within x number of days if not you would be advised that you have a child support debt.
While all this is going on, John changes jobs and his income for the current year is has dropped by 9%. John had no option about changing his job; it was a fixed term contract. Come June, John is in debt to the tune of $1500. IRD tell John, who is committed to keeping a 3 bedroom home for the Jim (7) and Jane (9) who stay with day every Friday and Saturday night, that the minimum they will accept is $20 dollars per week until the debt is paid. The budget prepared by the Budget Advisory Service, shows that at most John could afford $5 per week, IRD don’t accept that. They tell John he can change his living arrangements and move to smaller rented accommodation — this would mean that John could only have one of his children visit at a time!
John is in the worse place any man (or woman can) be, he’s in debt to the tax man. John is just keeping his head above water and is so stressed by IRD’s collection mafia that he can’t see any light at the end of the tunnel. Its not only IRD staff who are bridge jumpers!
Five months later John was paying IRD $10 per week and the debt was still showing as increasing on his statements. IRD had agreed to waive penalties, both incremental and initial, but try getting a reconciliation that adds up out of them it is near impossible!
John is still paying off the debt created by a flawed Child Support Act. The kids still come and stay every weekend and he, and his accountant mate, still cant reconcile his child support statement.
IRD figures show about 23,000 parents put into debt by reassessment each year, through no fault of their own.
Over the next few weeks I will post more examples of the systemic failure of the Child Support Act 1991.
Feel free to leave your comments on Child Support Debt-You would be surprised who reads these pages.