The Child Support Act has been updated in order to make it less complex, to improve on the fairness of the payments and to increase compliance with child support rules. 

The new changes will remove incremental penalties to people who do not pay child support on time.  The penalties that are currently imposed have had the effect of leading people to stop meeting their obligations under child support payments. 

Before 1 April 2021, if you paid your child support payments late, there is an initial 2% penalty. If you are a further 8 days late, this penalty increases by 8%.

Another change is that there will now be compulsory direct deductions of child support payments, meaning that employers can deduct child support from an employee’s wage or salary and pay it directly to the IRD, as would be done ordinarily with their PAYE payments.

There is also going to be a fairer definition of income to bring in dividends earned by liable parents.

The final change is that there will be a four year time bar on reassessing child support which will better reflect the liable parent’s financial capability to support their children. This will mean less frequent reviews of child support and providing stability and certainty of support for children.

The key goal from Government is that children in the scheme will benefit from the new legislation.  Like any new legislation this will need time to settle before results can be viewed as being successful or otherwise.

The incremental penalties on child support will cease to take effect after 1 April 2021. 

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.