Child support debt 'extortionate'

Ross Smith holds Inland Revenue Department statements with ''extortionate'' child support...
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 penalty payments.

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 appalling.''

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 support.

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 Southland's.

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 debt.''

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.''

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