Yet more child support lunacy!
More than 10,000 parents have been saddled with debts to the Inland Revenue they were powerless to avoid, and one angry solo mum is calling for change.
As well as collecting tax, the IRD administers child support arrangements, which are a financial lifeline to single parents.
But one mother is facing a large debt as the IRD tries to claw back “overpayments” by her former partner – a debt she did nothing to incur and could not have prevented.
According to official figures 10,002 people were in a similar position as of April this year, paying back child support debts totaling $11.5 million.
I am not surprised at yet another example of child tax lunacy.
This type of scenario will be more prevalent with the introduction of the new complex formula.
The promised calculators fail to appear on the IRD website.The IT changes required to implement Dunne’s disaster are driven by date,not quality. Looks like a potential nova pay to me.
…the comment from the un-named woman I quite liked was:
“The debt was an emotional blow, she said, and it felt like she was being asked to pay money to an ex-partner who had deserted her”.
I wonder how many “paying men” can relate to that?
Does anyone know about this process and panel? I do know that IRD do write off so called “custodial parent” debt but I was not aware they had a panel that made these decisions. Who might be on it? Is their decision appealable anywhere.
Then the $64 million dollar question; Can paying parent apply and be considered for relief??
I wonder but I suspect I know the answer.
The real issue here is IRD’s ability to recover the money from a custodial parent. Easy enough to ding a father; but o the uproar! The injustice! when you take it back from the mother! How could IRD be so callous as to take food from the child’s mouth.
Guess Peter Dunne won’t be addressing these q’s anymore ….
For a significant number the party donged for recovery will be the long suffering taxpayer (you and me).
the comment section goes on and on, now can the govt realise it’s just a big waste of time and scrap the whole system of child support?
“Revenue Minister Peter Dunne said in a statement that the IRD worked hard to calculate payments correctly based on the information provided to it.”
I have a reply from IRD (lower levels) this morning and I still await a response from the Commissioner herself and Mr English.
So may has now become July and they still can’t work out that they are on a near to impossible task due to some of the inputs required being “private”.
It’s all private until it’s an admin review, then it is “screw the privacy act, we’re gonna show your ex everything!”
There are currently 84 comments in response to this story on the stuff site showing a high level of dissatisfaction with the child support system.
Response to post 8 above.
IRD are crafty when it comes to Admin Review applications. They almost demand information from the parties including detailed budgets and lists of assets for you and your partner (and from your ex and her partner). However they are also very explicit in saying whatever you provide they will share with the other side.
If you choose to fill in their forms and make this information available they you breach your own privacy and all they have done is act as a conduit for correspondence.
It is about getting good advice BEFORE you enter the admin review process.
People I assist never fill in those nosey forms and normally we never submit their application forms either. All you are required to submit is a letter of application stating the ground(s) under which you are applying and the years you are applying for. I have seen some applications based on a single sentence.
Manukau Office who are now handling Admin Review applications, and some review officers, don’t like this but they have no option but to proceed.
Many reviews are a complete waste of time and can be seen as such from the application itself.
For example paying parents seeking ground 8 applications against their ex based on her income, assets, resources or lifestyle. It will pay a lawyer several hundred dollars to hear the matter and write the decision but everyone could have been saved the trouble as it was never going to be a starter anyway as the receiving (custodial) parents situation is irrelevant unless in a shared care situation.
I suspect about 25-30% of application are so poorly made they don’t stand a chance of success.
The other problem that I see a lot is people have shared a whole lot with IRD on the basis that more information is better and almost certainly it is not. I have people every week who lament with me that they have been unsuccessful at IRD and I let them know that the information they have chosen to share with IRD will make any subsequent application on different grounds, or with a different slant, very difficult.
IRD have a long and good memory for detail to use in their search for revenue.
To Alan Harvey; you state “So may has now become July and they still can’t work out that they are on a near to impossible task due to some of the inputs required being ‘private’.”
IRD can readily enable a calculator covering both parties incomes; either party doesn’t need to cite the other party’s income. Just enough details for IRD to shoot off and retrieve their income from their database.
If I say I earn $60,000, have 2 children for 73 nights each year, and their mother is Jane Austen, born 1/4/1880, and residing at xxxx address, they have just about enough information.
What they should not do (but we know they will) is make it obvious back to me in the calculation what Jane Austen’s income is; only that I would be liable for 13,333 total CS tax.
The glory of data matching is that they can retrieve information whether Jane Austen is on a benefit (DPB);
they can determine that if I have our children 113 nights a year (30.9% of nights) then Jane must have them the balance of nights; They can confirm my income from their database; For all we know, they can probably even tell me who I had sex with last Wednesday night.
OK, maybe they can’t automatically tell me if there are any other children co-habiting with Jane and her current benefactor. (unless they filch the Census data, which of course they’d never do (wink wink).
IRD might keep up a veneer, but those of us who have been financially raped by them, we know otherwise …
Hell, under anti-money laundering rules kicking in next month, IRD should be able to reconcile everything we spend, back to our declared incomes too!
John Key (NZ Prime Minister) – give my money back you arrogant, oppressive, corrupt, thieving bastard!
The new child support calculators are now up on the IRD website. I make five predictions having kept across the legislation as it was evolving, having commented through the process, and knowing only too well what the implications will be – which are now proven in running several calculations to test it out ….
1. The non custodial parent will LOVE the new regime – it will reduce their liability in almost all cases
2. The custodial parent will HATE the new regime – their costs will not reduce in supporting the child(ren), but the contribution they get from the non custodial parent will
3. The non custodial parent is now very clearly and quickly incentivised to have the child(ren) for more nights – the more they have them, the less they pay
4. The custodial parent, will be worse off again – UNLESS non custodial comes to the party in paying for the core costs of the child(ren) – the cost of their main home, food, clothing, schooling, activities, medical, insurance etc … the custodial parent just gets worse off – just because the kids stay for more nights at the non custodial, doesn’t mean those core costs reduce does it!
5. IRD have not put up any new processes around reviewing the default assessments … I suspect they are going to get quite a few custodial parents knocking on their door once the custodial parents run the figures and see the impact
I don’t see any great detail on what IRD classify as the “costs of running children at the various age/stages”.
And for those parents out there that earn above the average wage and heaven forbid, earn well above, BEWARE … there is additional ‘running cost’ allowance for the reality and fact that when parents earn more money, they make different choices for their children i.e. the children typically have more opportunity afforded to them in education, activities, hobbies, etc – all of which cost money – sometimes a lot! When parents are together these choices are made jointly … when parents part, the custodial parent is left with the aftermath of those choices to continue to support or be the ‘bad guy’ in denying. The old child support formula better provided for this income ratio … be warned, the new one doesn’t … the runnings costs of the children is calculated at the same % irrespective of whether the parents are in poverty, earn the average wage or earn way over the average wage. Result being that the custodial parent will lose a lot of financial support for the children and not be able to continue to support those activities … the non custodial, will see the reduction as money in their pocket and bet your bottom dollar, they simply keep it!
It is pretty clear here who the winners and losers are in this new regime!
All I can say is check it out now – and start lobbying if you are not happy!
above should say there is NO additional running cost allowance ….
Zoe; you omitted one key fact. Child Support has NEVER been about the non-custodial parent meeting all the costs of raising a child. There has NEVER been any documented reason why these costs should not be shared equitably by both parents, taking into account the number of nights the children stay with each parent, and taking into account the incomes of both parents.
Therefore the calculator might at last shed some fairness upon the calculations.
Your language is quite emotive. How about we turn a couple of these around.
There is still every incentive for the custodial parent to minimise / reduce the number of nights the child is with the non-custodial parent.
The custodial parent is incentivised to reduce their own income in order that the non-custodial parent pays a greater share.
The non custodial parent is now very clearly and quickly incentivised to have the child(ren) for more nights
I dont understand, you say this as if its a bad thing???
Wouldnt it be better for the children to spend more time with the non-custodial parent?
Along those lines if we set the start point at 50/50 in any custody discussion then why the need for child tax at all. The core costs as you put it will have to be carried by both parents, and I for one, think that this should be a factor investigated by either party when considering a family break up. It seems wrong to me that someone can break up a family and then ask the other parent to fund their choice of lifestyle.
And with all due respect I find all this “running costs” discussion confusing, are we talking about kids or cars here?
And for the record Im a non-custodial parent and the new formula makes bugger all change to my child tax unless I can get the mother to agree to me seeing the children more, something I suspect she will immediatley baulk at if its going to hit her $$$ so it would appear that the predominantly mummies in reciept of child tax still have the final say on who gets what. What I suspect is some, predominantly fathers will see their time with their children suddenly curtailed as mum doesnt want to have a reduction in her $$$. I predict some guys just below the current thrshold for shared care will find their access restricted to the new threshold when the changes are made.
So then the kids miss out. How is this good for children?
the more they have them, the less they pay
I missed adding to this bit.
In my opinion its patently wrong. The more you have your children the more you pay, as you have the adorable loveable little money munchers with you and they sure do cost.
So I disagree, the more I have them the more I pay. I just dont have to pay it to their mother is all!
Just to be clear; Mits: its Zoe you disagree with?
Hi pretty in Pink
Yes its Zoe’s comments that Im replying to.
Hi Zoe and others,
IRD are beginning a major information dissemination of information about these changes starting next month. People can expect letters asking for information that the don’t have that is needed for the new formula. Look out for the new terracotta coloured communications that replace the old green colour of Child Support publications. They are currently testing website information that will be up shortly.
I think you are incorrect Zoe about so called non-custodial parents being winners under the new regime. My calculations show that people who have every second weekend and half the holidays or less will on average pay more. IRD are very clear that the new system is an encouragement for more sharing of care and if paying parents wish to pay less then the answer is have more care, meet more costs directly and in doing so the other parent will both spend less on care and receive less in Child Support. This is not a conspiracy but an explicit objective of the new changes which I welcome.
The way to appeal the new formula is via the Administrative Review system which will continue largely as usual and will not be significantly changed until April 2015.
…. half of holidays + second weekends + custodial parent on a very good income = halving of child support in my case ….
As it should be Pete. You doing over 28% so you get the percentage care costs awarded to you.