Remember to update your IRD CS Estimate of Income
All non-custodial parents who are paying IRD [Spousal and] Child Support should think through whether they should submit a new Estimate of Income, before the 31st March.
If you haven’t submitted an Estimate and your income has reduced, you might end up paying quite a bit more CS than is set by the formula. This is a bigger risk, if you are self employed.
As it is late in the year, you should visit an IRD office in person, taking two copies with you. Ask the receptionist to date stamp and initial the copy that you take away with you. (This is important to give you an item of evidence, just in case IRD feel that they might have forgotten receiving your Estimate of Income.)
(I am not fully up to date in this area, so if my advice is out of date please correct me quickly!
If you have any concerns, discuss these issues through with someone knowledgeable, but don’t delay.
Cheers, MurrayBacon.
Murray is right. I checked my IRD online account just now and the IRD have already assessed my income for the next tax year at $1000 more than the 2 per cent pay rise I just got! My payment schedule has already been set up in the online account and I guess I will now have to challenge the formula assessment.
Comment by Gerry — Sun 8th March 2009 @ 9:15 pm
I don’t know of any “solution” to the IRD automatically increased income estimate problem. At least this is only a 1 or 2% issue.
The biggest problem, is for people whose income has dropped significantly, for example if they had had a few months unemployed. For example, a 10% drop in income can leave you still paying unreduced IRD [Spousal and] Child Support. Only if the drop is over 15% do IRD have to allow a reduction in CS paid. This situation is commonplace and problematic for people on fluctuating or dropping incomes.
Comment by MurrayBacon — Sun 8th March 2009 @ 9:40 pm
I am one of those with a fluctuating income and I’m preparing for the annual argument to take place.
I have a base salary (Which, like most has just been frozen)I then earn a bonus/commission based on reaching a target. Although I have done OK in the past, they are trying to add on approx 35% to my base. If this was to go through and I didn’t earn a bonus, then I would be $260 out of pocket every month. That’s $260 that may pay off my Lawyers bill, maybe one day get me into a my house again, maybe the difference between putting food on the table. Even 15% is one hell of a big gap between actual and estimated. I’m sure a bank wouldn’t allow 15% as an ‘O well, you earned that last year so we’ll just assume you’ll earn that again’ Her’s $xxxxx dollars mortgage for you.. and don’t worry if you can’t make the payments, as we’ll charge an extortionate amount that will send you in to spirraling debt forever.
Oh.. and if you do estimate your income and you don’t get it right, well we’ll screw you anyway with as many penalties as you can imagine. Lose / lose situation you, win / win for us. Does the child benefit? No.
Comment by Instinct — Mon 9th March 2009 @ 10:53 pm
I haven’t worked in a number of years and they are trying to charge me as if I had been earning an amount that I have never earned in my life. I would love to be on that wage!
Comment by Scott — Fri 13th March 2009 @ 10:13 am