Compulsory deductions of child support from the employment income of paying parents
(Clause 27)
Summary of proposed amendment
The bill proposes making it compulsory for child support payments to be automatically deducted from the employment income of paying parents.
Application date
The amendment will apply from 1 April 2014.
Key features
Clause 27 introduces new section 129 which makes it compulsory for child support payments to be automatically deducted from the income of a paying parent who falls into one or more of the following categories (regardless of when the person’s liability to pay financial support arises, or whether the person has defaulted in a payment or payments of financial support):
- a PAYE or ACC income recipient;
- a person who is in receipt of a specified social security benefit; and
- a person who is in receipt of a basic grant or an independent circumstances grant under the Student Allowances Regulations 1998.
Background
Receiving parents may be adversely affected by the non-payment of child support by paying parents, or alternatively be concerned about the potential instability of future payments. Currently, child support payments can only be deducted from the employment income of paying parents when those parents have defaulted on their child support payments.
Making it compulsory for all child support payments to be automatically deducted from the employment income of paying parents will help to ensure that as many payments as possible are made, and made on time, by giving more certainty to receiving parents. Paying parents will have their payments automatically co-ordinated with their pay periods, whether those periods are weekly, fortnightly or monthly.
It is recognised that some paying parents will have concerns about their employers knowing that they are making child support contributions. However, the public interest in operating an effective child support scheme should outweigh these individual concerns.