Appendix 1: Legislative history of child support in New Zealand
The Child Support Act
The Child Support Act 1991 came into force on 1 July 1992. It revised the rules relating to child maintenance in cases where agreement proves difficult, or when the receiving parent is a beneficiary.
What differentiates the child support scheme from the previous arrangements under the Family Proceedings Act 1980 and the Social Security Act 1964 are its legislatively fixed standards, which set the level of financial support to be provided by parents for their children, and its coverage. Previously, many of the situations now covered by the child support scheme would have been determined by the courts.
The Destitute Persons Act 1910 and the Domestic Proceedings Act 1968 created a statutory means by which women could seek maintenance orders against the fathers of their children. The court could, at its discretion, set the rate it thought appropriate for the father to pay the mother to support the child.
This kind of maintenance continued until the child reached the age of 16, but continued to be payable for a child over that age if the child was in full-time education.
Under the Social Security Acts of 1938 and 1964, and the Social Security Amendment Act 1973 (which introduced the statutory domestic purposes benefit), sole parents’ access to benefit assistance was conditional on pursuit of maintenance through the courts.
Even though the legislation provided a means by which mothers could seek maintenance from the presumed father:
- a mother had to resort to the court to enforce the maintenance agreement or order when the father did not voluntarily comply; and
- an unmarried mother had to obtain a court order, an acknowledgement of paternity from the father or a declaration of paternity from the court which would entitle her to seek maintenance. Naming the father on the birth certificate was not enough to create an automatic obligation for maintenance.
From 1981 to 1992 when a sole parent was in receipt of a domestic purposes benefit, the Social Security Act 1964 provided for the former Department of Social Welfare to make an assessment against the other parent of each child included in the benefit for a contribution towards the cost of the benefit. This was the Liable Parent Contribution scheme.
Sole parents not in receipt of a social security benefit could agree on maintenance of their children which could subsequently be registered in court for enforcement, or they could apply directly to the court under the Family Proceedings Act 1980 for a level of maintenance to be decided on.
Problems with this dual approach included:
- Complexity. Many parents escaped contributing and consequently the objective of recovering from liable parents a proportion of the cost of the benefits paid to sole-parent beneficiaries was not met in many cases. For the year ending 31 March 1990, only $55 million was collected from paying parents, whereas expenditure on the domestic purposes benefit was $1,136 million. The amount owed by paying parents was $136 million, so the collection rate was very low at around 40 percent. The estimated cost of administering the scheme was $27 million.
- Parents who could not agree on their child support financial arrangements had to go through the courts for a solution.
Consequently, it was decided to rationalise these two approaches into a single, unified child support scheme, open to both beneficiaries and non-beneficiaries, which would provide for administrative assessment of child support liabilities using a formula approach.
In 1989 a working group was set up to establish principles and objectives for a new child support scheme and put forward possible options for reform. Early in 1991 the Government agreed on the broad principles for reform. Those principles were:
- that children have a right to support (including financial support) from their parents, and parents have an obligation to provide support according to their capacity to provide, irrespective of whether they are living with their children;
- the State has a responsibility to ensure an adequate level of financial support for children and families and, if necessary, to supplement the financial support that parents can provide; and
- the State has an interest in ensuring that caregivers of children are not left without income. It has a role through an up-to-date child support scheme in ensuring that parents meet their obligations to provide financial support, thereby limiting dependency on the State.
At the same time the Government identified the key objectives of the reform which formed the basis for the objectives in the Child Support Act, as outlined below:
- To affirm the right of children to be maintained by their parents.
- To affirm the obligation of parents to maintain their children.
- To affirm the right of caregivers of children to receive financial support on behalf of those children from non-custodial parents of the children.
- To provide that the level of financial support to be provided by parents for their children is to be determined according to their capacity to provide financial support.
- To ensure that parents with a like capacity to provide financial support for their children should provide like amounts of financial support.
- To provide legislatively fixed standards in accordance with which the level of financial support to be provided by parents for their children should be determined.
- To enable caregivers of children to receive support on behalf of those children from parents without the need to resort to court proceedings.
- To ensure that equity exists between receiving and paying parents, in relation to the costs of supporting children.
- To ensure that obligations to birth and adopted children are not extinguished by obligations to stepchildren.
- To ensure that the costs to the State of providing an adequate level of financial support for children and their caregiving parent is offset by the collection of a fair contribution from paying parents.
- To provide a scheme whereby child support and domestic maintenance payments can be collected by the Crown, and paid by the Crown to those entitled to the money.
It was decided that the scheme should be administered by Inland Revenue, given its access to income information, and collection and enforcement capabilities.
Like its then Australian model, the New Zealand child support scheme was based on the application of a formula to the paying parent’s taxable income but with important differences:
- The Australian legislation left existing court-ordered arrangements for child and spousal/partner maintenance intact, whereas the New Zealand legislation overrode some existing private and court-ordered agreements.
- The living allowances in New Zealand were changed to include new spouses/partners and stepchildren whether they were financially dependent or not.