Changes

What makes it worse are the uncertainties resulting from the changes to the Child Support scheme which are currently taking place because the Inland Revenue keep changing their mind on the changes and whether to implement the original proposals. It seems that despite spending tens of millions getting ready for the change and having many, many years to think through the changes and improve the scheme, it is still chaos. Take a look at the articles on Stuff (search on Child Support), not just from those parents both payers and recipients who are worse off under the changes but on the Inland Revenue's blowout overspending and backtracking on potential changes.

One of the most annoying changes to the scheme is the new way of checking the amount of Child Support you have to pay. The new calculator is poor and doesn't seem to give you the right answer despite running the figures through the calculator more than once. The Inland Revenue try and say that it is just an estimate of the Child Support payable but to me that is just frustrating beyond reason. When it's your money it's not unreasonable to want to check that you're paying the correct amount so I can only assume those who have designed the calculator are not payers of Child Support!

Unfair

There are still so many aspects of the scheme which are unfair. For recipients the Inland Revenue is lousy at collecting unpaid Child Support and in consequence, it was recently announced that the Inland Revenue are going to write off 1.7 billion of uncollected Child Support debts. Where is the fairness of that both to parents who have not received a cent of Child Support owed and to those payers who have actually paid what they owe? 

The Child Support scheme, despite the changes, does still not adequately take into account the income of the recipients. Take, for example, the client of mine whose ex-partner who has moved in with another man who is the sole earner between the two of them. The Child Support my client is paying does not take into account the income of the recipient's partner which is surely nonsense. Nor does it take into account the expenses like school fees which are paid directly by the paying parent which again is nonsense. There are loads of other examples, like the client of mine paying full Child Support despite his daughter attending university and he having paid half the Hall of Residence fees.

Income Definition

One of the biggest proposed changes dropped by the Inland Revenue is the change to the definition of Child Support income. A couple of years ago the Inland Revenue announced that the definition of income for payers of child support would be extended to take into account business income not directly reported on the payer's tax return. This would bring the definition of income for Child Support into line with that used for Working for Families and student allowances but for some reason the definition of income is to stay the same which is direct taxable income reported on one's tax return.

For payers of child support this of course is good news because it means that other business income, perhaps income retained in trusts, will not be taken into account in setting the amount of Child Support income. However this is not necessarily good news because it means that the honest will suffer at the expense of those who arrange their affairs to avoid paying a reasonable level of Child Support. 

For recipients of child support this is of course bad news because for many, the Child Support they were likely to receive would have increased substantially, assuming of course that the Inland Revenue would actually be able to collect the child support they owe. Yes they can ask for an Admin Review but that all takes time and can cause stress and hassle.

What to Do Next

Don't assume that the Child Support you are paying or receiving is correct because often it is not. Seek advice from someone who knows how the scheme works and who will not be bullied by the Inland Revenue officials who work for the Child Support section who can be particularly difficult to deal with, to say the least!