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Retrospective Departure Orders an Update

Filed under: General — Scrap_The_CSA @ 9:02 am Tue 10th July 2007

The previous post The Wrath of IRDrequires an update.

First the good news. After years of parental alienation and tens of thousands of dollars in court costs this Dad is finally beginning to rebuild the relationship with his children. The message here is never give up.

The Dad has secured legal representation and while he bears up well this action by IRD is placing a severe strain on his personal life.


This case is going to see an attack made,with the full force of Crown Law and the IRD, on the the long established principle that a departure order cannot be retrospective.

In plain English : If you are subject to an administrative review you are part of the departure order process. Departure order is the legal term for the mechanism used by an administrative review to create a variation to the formula assessment.In most cases the order is upward and you are required to pay more Child Support.

The departure order cannot (except in very limited circumstances) be retrospective. This means that IRD cannot reopen and vary assessments from previous years. If IRD could, via a departure order, open up previous years to reassessment then any custodial or liable parent could suddenly find themselves reassessed for any year they paid or received child support(TAX).

The likely effect of retrospective departure orders on anyone who is or who has been a paying or a receiving parent

I want this to be very clear.

The law on administrative reviews has changed. Before only a liable or custodial parent could initiate an administrative review. The law that Peter Dunne, Minister Responsible for Child Support and United Future Leader, pushed through Parliament gave IRD the power to initiate administrative reviews. To quote IRD

The Commissioner of Inland Revenue may decide to review an assessment if an investigation into a paying parent’s financial affairs shows that their assessment doesn’t accurately reflect their ability to provide financial support to their children. This is called a Commissioner review.

If you are a liable parent it opens you up to having a child support income plucked out of the air.General accounting principles do not apply when creating Child Support Income.

Some examples of where this may be applied for an upward departure order
*You are self employed
*You have an investment property
*You have an employer who matches your contribution to Kiwi Saver or a superannuation scheme.
*You receive tax credits form the Kiwi Saver
*Any situation where IRD believes that formula assessment does not reelect your perceived ability to pay.
*You are father of a child that you have no knowledge of you child until IRD demand child support(Tax).

If IRD are successful in achieving their goal of retrospective departure orders and this is then combined with their ability to seek a departure order will cause many parents extreme financial and personal hardship.

If IRD, with all the resources of the Crown backing, them are successful in achieving their goal of retrospective departure order then it allows any liable or custodial parent license play havoc with a parents life. A custodial or liable parents financial position will be extremely insecure if they cannot rely upon the protection of previous years child support assessments being correct and unalterable.

Yes its a two edged sword as TR V The Commissioner of Inland Revenue shows but it is my view that retrospective departure orders will only be allowed to be upward and the chances of liable parent “recovering overpayment of child support” via a downward departure would be slim.

It will be open season on reopening previous years assessments to collect more revenue if IRD’s challenge is successful.

The Case Law and IRD Administration
There are two published and one unpublished decision from the High Court that deal with the question of retrospective departure orders.Two cases clearly come out against retrospective departures one allows retrospective departure in very limited circumstances.

IRD have for a number of years not issued retrospective departures via administrative review.Their view of the law has been that retrospective departure orders should not be granted.

There has been a direction to change this position and they see their best chance at collecting an increased amount of Child Support (TAX).

What Next ?

The hearing of this case is likely to occur in Wellington at the High Court. I will keep you posted on planned activity as soon as the date is confirmed.

Please note that the issue here is should retrospective departure orders be allowed and what the effect will be on parents if they cannot be guaranteed that previous years child support (TAX) assessments are correct and reliable.



9 Responses to “Retrospective Departure Orders an Update”

  1. Frank & Earnest says:

    Maybe the time is long overdue that all men’s salaries are simply paid direct to HER, and she simply doles out whatever she thinks HE needs to live off; maybe $50 per week (for food), and nothing else.

  2. Bevan Berg says:

    Frank and Earnest that already does happen. You loose income tax and child tax at source, you never see that money. The arbitrary $50.00 a week you use as a residual ammount is effectively the 30% of gross income otherwise called protetced income or 60% of nett. What is happening here is that the collection rate of the 40% of nett is being increased first in quantity by the arbitrary assessment of earning potential (then penalties)and secondly by the relative collection rate through the effect of a % break, and the effect of inflation. It is a money game that is rapidly impoverishing men.

  3. Benjamin Easton says:

    I haven’t researched this legislatively yet but I intend so to do. Paul Catton brought it to my attention, where like I say I haven’t given child support any thought at all, I just haven’t paid it. I’mnot sure yet if I agree with the term child tax because a separation was involved. I’ll go with Caz at this stage if negativity reaches so deep that the cynicism in here precedes separation – but it is a small point. Masoginism has nothing to justify a deflection from justice: even if this is the considerable reflective problem we face as an active group.

    But the point is that tax and child support are taken from the same dollar. This is inconsistent with democratic process protective of teh citizen agaisnt exploitation by an administration. It will be a legal argument requiring (back again to s.21 of the HRA as consistant or not consistant with s.4 BORA) demonstrable justification. There is no justification in taking from $1 twice and saying you are giving all of the $ taken that is due to the child to another kind of tax. It is like the PM saying 1 plus one equals me.

  4. Mark Shipman says:


    This is completely consistent with the picture I saw when the Child Support Amendment Bill (No 4) was first tabled by Cun[silent-T]liffe in 2005 and was then picked up in 2006 by Duplicitous Dunny-boy in return for his ministerial salary (there’s a word for offering your services in return for money…).

    The Commissioner Initiated Review provision [that is now law and is being used by THE Department now] only makes any real sense when you bring this little gem of a legal case into the picture.

    It means that the penalised parent who has been diligently paying Child Tax (Sorry Ben, it is a tax and nothing more), while the “custodial” parent is receiving the DPB, is no longer safe after the children reach 19 years old.

    Instead, when the penalised parent is frantically trying to save for their retirement [and consequently earning more], the Commissioner will initiate a review (but this is not “revenue gathering”) and quite simply set the “Capacity to Provide” based on the penalised parent’s CURRENT income.

    Remember also that, when the review is complete and the decision is in the Commissioner’s favour (you have to presume this will be the outcome), you will have 28 days to come up with the entire amount owed or the Department of Inland Revenue will apply cumulative penalties from the date the decision applied to. ALL penalties go to The Crown…smell a rat here?

    When you put your Cold-fish-Cullen hat on (the one that takes away every intellectual capacity for dealing with financial matters) and look at the $600 MILLION in penalties that “Deadbeat Dads” (J Collins) are alleged to owe, you have to deduce that the number is in his budget.

    The Commissioner of Inland Revenue is simply Cold-fish-Cullen’s way of turning the fictitious figure into real Crown Revenue.

    With the Commissioner Initiated Reviews AND this horrific miscarriage of justice being perpetrated by the Department of Inland Revenue, Cold-fish-Cullen will be able to actually INCREASE this number.

    From what Cot-case-Collins in the National paddock is saying, she and John Key will be even harsher in their treatment of people who it is alleged “owe” Child Tax and/or penalties.

    Bring on the Great Darkness!

  5. Sparx says:

    Bring on the Great Darkness!

    Nice sentiment, but you’re too late.

  6. Benjamin Easton says:

    No, noone is too late to effect a more direct challenge on these conditions and so to presume is to disaffect ones own disaffection – grizzling yet submitting.

    I think I understand a little better reading your comments mark, but honestly I am still a long way off having never really bothered with the numerical demands as against the social impacts when those demands are commandered as tantamount – thereby the orchastrated effect of equivelancy. Having money as deemed more important than contact with children is simply ludicrous and ever bound to collapse.

    What your comment describes in my thinking is the reasons for rejecting the social impact and again we come back to what Bevan is saying. The problems that are under taking us is that the present socialist expansion has denegrated the family values. In my version it is more that when women championed for themselves, they forgot that men are different and that for any neglect the children had to be the victims. Same end different path and serious damage at this end where money is more important than people.

    Additionally I have a distaste for these sentiments of “bring on the great darkness”. What does it mean even if it is going to eventuate? If this kind of end is predicted and must come about then nothing you are going to do, think or say is going to interfere with it as it is well above any human capacity that any of us can presently manipulate. So concentrate on the primary value instead. Copncentrate on the relationships that children have with their fathers. That’s how to fix this problem.

    When JC talks about deadbeat dads tell her she is thinking like a deadbeat until she stops. If that requires protests protest – not let’s have another cup of tea. I don’t mean to sound disparranging Mark – not at all but the point is if we are not doing enough then we’ve got to do more.

  7. Benjamin Easton says:


    I don’t know if you have replied to my question of you on the BORA and s.6 and s.7 being not any other enactment but consistent themselves with the BORA and hope that if you reply to this you will alert me to the reply and the thread’s title. I cannot remember.

    For any others reading this comment, I will ask you to think about what I am asking you very, very carefully. If you read up you will come to my reference of a comment to me made by Paul Catton. Paul is an exceptionally clever man. He has identified the unifying point of all fathers. Think about what he has said. Think about it in the terms of billions upon billions upon billions of dollars. Don’t slip into any kind of bullshit coma with verbal diahorea as the predominant response, I am simply not interested in this kind of rubbish. If you want to answer answer sensibly with a direct consideration to the point he has raised.

    The IRD take income tax from gross earnings. The removal of tax is compulsory and belong to the first part of any and every dollar. Let’s focus on this for an example’s sake as 10c. Child (tax) Support is taken from the same dollar yet it too is taken from the gross. It too is compusory. It too thereby is taken from the first part of any and every dollar. To continue the example, label this as well as 10c.

    This means that two separate sets of 10c come out of the same part of the one and every dollar. One is for general tax and the other which belongs to the child is removed by the State. In the example, the first part of the dollar is 10c. This means that 10cents is available to be removed but twenty cents comes from that part of the dollar. Both halves of that 20c goes to government. That is theft.

    To be justified Child (TAX) Support can only legitimately come from the nett $.

  8. Benjamin Easton says:

    IN another post Stephen says people don’t understand what I write. That’s weird.

    Gross $. $1. Income tax (say) first 10c because it is compulsory. Child tax (say) first 10c because it is compulsory. Same $1; 20 cents out of the same first 10c.

    Wake up.

  9. confused_dad says:

    Has there been an update on this matter at all? I don’t understand the legalese, it seems that Administrative Reviews can be retrospective for multiple years? Is that correct?

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