Child support changes overdue

Child support changes are likely to become law as Minister of Revenue Peter Dunne's Child Support Amendment Bill awaits its third and final reading in Parliament.

The Bill will amend the Child Support Act 1991, which Mr Dunne says is ''long overdue for updating'', and needs to address issues of fairness, reflect changes in society, and provide better incentives for parents to pay.

The main changes are to the formula used to calculate child support (including recognising shared care at 28% not 40% of nights, taking into account the income of both parents, and revising the estimated expenditure for raising a child) and to the penalty scheme (including compulsory deduction of payments from wages or salary, changes to late payment penalty rates and relaxing the circumstances in which penalties can be written off).

Some, however, have criticised the pace of change. The legislation has been years in the making and - on the recommendation of the social services committee - alterations to the child support formula will not come into effect until April 2014 and to the penalty system until April 2015 to accommodate the Bill's legislative timeline and give Inland Revenue time to prepare.

The IRD has been heavily criticised by Auditor-general Lyn Provost for its ineffective penalty regime, under which unpaid child support ballooned to $2.6 billion last year, of which $1.7 billion is penalties.

Recently released figures contain revelations 15,590 fathers living in Australia owe $529 million - 20% of the current debt, at least 10 New Zealand fathers owe $1.3 million or more each, and 403 fathers owe more than $500,000.

A total of 3868 Dunedin parents owed $76.52 million. The figures also show more than 800 earning more than $100,000 a year owe an average of $10,000 each. With about 133,000 children dependent on those payments and total debt from unpaid child support and penalties forecast to reach $7 billion by 2018, changes to address the issues of non-payment are clearly required.

But the Bill has drawn criticism from various quarters.

The Labour Party - which supported the Bill in its initial stages - has said the Government has not gone far enough and merely ''tinkered'' rather than taken the opportunity to tackle the fundamental issue of child poverty.

It says the Bill does nothing to put more in the hands of children who need it, but will cost the taxpayer $42 million more, and lacks efficient means of enforcement, thereby penalising those who do make payments.

Labour has also argued the new shared-care threshold will end up adversely affecting more women, who are usually the primary caregivers and therefore responsible for a higher proportion of the general costs of raising a child, but whose support payments will reduce.

The Bill has also been criticised as a missed opportunity to put in the issue of child wellbeing as a core object of the Act, which many submitters - including the Child Poverty Action Group, the Dunedin Community Law Centre, the Families Commission, the Human Rights Commission, the New Zealand Law Society and Office of the Children's Commissioner - said were important given New Zealand's obligations under Article 3 of the United Nations Convention on the Rights of the Child.

Despite the criticisms, the Bill is addressing some of the major issues and - having reached its third reading and with the numbers to pass - is likely to become law. Mr Dunne is confident the legislation and the reciprocal agreement with

Australia - which came into force in 2000 - will make it easier to deal with unpaid child support.

While parents may not be able to bring up their children together for a range of reasons, in an ideal world they should be able to agree to individually continue providing financial - not to mention emotional and physical - support to their children.

Of course, in such break-ups the situation is often far from ideal and therefore enforced child support payments may become necessary. It is to be hoped the new system will prove more effective than its flawed predecessor to ensure tens of thousands of children do not miss out on support to which they are entitled.

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