Overhaul for child support system

The Government is seeking to make it easier and fairer for parents to make child support payments - but also make it harder to avoid stumping up.

Revenue Minister Peter Dunne today released a discussion document, Supporting Children, outlining wide-ranging proposals to change the system.

Parents owe about $2 billion but only about $600,000 of that is unpaid child care payments while the rest is penalties.

Mr Dunne said the scheme, which arranges financial support for the care of 210,000 children, needed to be fairer. At the moment, for example, a dad might care for a child before and after school every day but because he did not have them for 40 percent of nights (the current test) he was not considered to have shared care.

One of the options was to change the measure to a tiered system starting as low as 14 percent of nights and recognising other periods of time.

Other options around changing payments calculations included using an estimate of how much it cost to raise a child as a basis for payments, and taking the income of both parents into account - not just that of the absent parent.

Mr Dunne said most of the principal payments were made - 89 percent - but there were issues with penalties building up.

Options to tackle payment, penalties and debt included:

* making it compulsory for child support payments to be automatically deducted from salary and wages;

* reducing penalties after people made repayments for a reasonable length of time;

* providing an amnesty on penalty fees for people who pay the whole original debt;

* allowing penalties to be written off in some cases -- for example, when someone is ill.

"An important part of getting the scheme right will be creating a situation where paying parents are more likely to comply with their obligations voluntarily," Mr Dunne said.

"They are more likely to do that if they see their obligations as fair, transparent and reasonable - and not based upon some formula that seems to have no regard for their individual circumstances."

The document also looked at tightening up on non-parents claiming child support -- in some cases teens have left home and set up with people parents did not approve of but who they found they had to pay.

Mr Dunne said the scheme was introduced 18 years ago and was "outdated and sometimes unfair".

Families were often more complex: both parents were more likely to be working and often separated fathers had a greater role caring for children than in the past.

It was better if parents could reach their own arrangements but the scheme was a good backstop when that could not be worked out, he said.

The proposals would not please everyone but both parents had to share responsibility. Officials are trying to improve the tracking of absentee parents - about 27 percent of debtors are in Australia and 2 percent in other parts of the world.

The proposals, if adopted, would be more costly for Inland Revenue to administer.

Chief Families Commissioner Carl Davidson said parents needed support to continue to parent together as about 21 percent of households with dependent children were single-parent.

He said child support should be paid directly to the carer parent not through Inland Revenue and overseas experience showed people were more happy to pay when they saw the money going directly to their children rather than government departments.

He also said the system needed to account better for changing circumstances and flexibility around who paid what.

Every Child Counts spokeswoman Deborah Morris-Travers welcomed the proposals and said children in single parent homes were over-represented in poverty statistics.

She called on the Government to drop the domestic purposes benefit penalty for women who would name the dad.

The discussion document will be on Inland Revenue's website with submissions closing on October 29 and legislation would be introduced some time next year.

Labour's Stuart Nash said National had campaigned "hysterically" on the issue and was now taking a leisurely approach to fixing problems.