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Inland Revenue

Tax Policy

PUBLISHED 13 September 2006

Child support bill passes

The Child Support Amendment Bill passed its final stages in Parliament last night. Changes include a partial write-off of late payment penalties - to encourage lapsed payers of child support to begin making regular payments again - and strengthened Inland Revenue powers to investigate liable parents' financial affairs. For more information see the media statement.

Hon Peter Dunne
MP for Ohariu Belmont
Minister of Revenue
Associate Minister of Health


Dunne welcomes child support changes

Revenue Minister Peter Dunne has welcomed the passage last night of law changes aimed at getting non-paying parents back into the child support system.

"The main purpose of the Child Support Amendment Bill is to get parents who have stopped paying child support to begin making regular payments again," Mr Dunne said.

"To do that, the bill provides incentives to encourage lapsed payers of child support to resume their payments.

"If they front up, agree to start making regular payments again and keep to the agreement, some of the late payment penalties they owe will be written off, though they will still have to pay all the child support they owe.

"It's very important to get lapsed payers back into the payment system, before their debt becomes huge.

"Penalties for not paying child support quickly mount up, so those who have defaulted in their child support payments soon find they owe a lot more than the total of their missed payments.

"The latest figures for child support debt nationally show that the total is just over $1 billion, with unpaid penalties making up about $640 million of that.

"As a complementary measure, the bill also strengthens Inland Revenue's powers to investigate parents whose financial affairs are structured in such a way that the child support payable under the standard formula is less than it should be.

"There is much anecdotal evidence of liable parents who appear to have luxury lifestyles but pay only the bare minimum of $14 a week in child support.

"The new legislation will enable Inland Revenue to be the one to initiate an administrative review in such cases, when an investigation shows that a liable parent is paying less child support than he or she should be.

"New appeal rights will ensure greater fairness between applicants and respondents following an administrative review. Applicants will no longer be the only ones allowed to have their case reconsidered in the Family Court.

"The bill also introduces a temporary exemption from child support payments for parents under 16 who are still at school and a permanent exemption for parents who are victims of sexual offences, whether male or female.

"The new legislation introduces a balanced package of measures designed to enhance the administration of our child support laws and to encourage liable parents to maintain financial responsibility for their children," Mr Dunne said.

Contact: Ted Sheehan, Press Secretary to Mr Dunne, Tel: 04 470 6985, Cell: 021 638 920