Ross Smith holds Inland Revenue Department statements with ''extortionate'' child support penalties. Photo by Gregor Richardson.
The billions parents owe the Government for penalties on
unpaid child support is ''extortionate'', Middlemarch father
Ross Smith says.
Inland Revenue Department figures released to the Otago
Daily Times under the Official Information Act revealed
that at the end of last year parents had $2.92 billion of
unpaid child support debt and 76% of that debt was overdue
Mr Smith (39) said he paid an extra $10,000 in penalties
since he started paying child support for his son in 2007.
The frequent penalties were ''extortionate'' and were often
unexplained by IRD staff, he said.
After Mr Smith paid his final child support payment, he
continued paying IRD until the penalty debt was cleared.
Calling a father with child support debt a ''deadbeat dad''
was unfair because it difficult to avoid penalties, he said.
''The way you get treated by Inland Revenue it's no wonder
people bugger off and don't pay their child support. It's
Of the 315,797 parents in New Zealand paying child support at
the end of last year, 43.3% had a debt from unpaid child
Of the 136,970 parents in New Zealand with child support
debt, 3531 were from Otago and 2495 were from Southland.
In Otago, 35.9% of the 9813 parents paying child support had
an overdue debt.
In Southland, 38.7% of the 6442 parents paying child support
had a debt.
Otago had $32.4 million debt and Southland had $30.3 million.
Penalty payments were 71.3% of Otago's debt and 75.3% of
Auditor-general Lyn Provost said, in the report Inland
Revenue Department: Managing child support debt, the
penalty regime was inflexible.
''In my view, Inland Revenue's debt strategy has not
adequately focused on preventing debt, nor has it addressed
the adverse effect the penalty regime is having on levels of
Revenue Minister Todd McLay said when a parent got behind in
their payments, a small debt could become a big problem and
it was important they spoke to IRD early.
''Significant penalty write-offs are available for paying
parents who make and comply with a repayment arrangement. If
an arrangement is not made to repay the child support, then
Inland Revenue is required to take action, to ensure people
meet their obligations to their children.''