Child support – how does it work?

Child support is money paid by a parent who is not living with his or her children, to help financially support their children. The aim of the law is to make sure that parents take financial responsibility for their children. To qualify for child support, the child must be:

• Under 19 years of age;
• A New Zealand citizen or ordinarily a resident in New Zealand;
• Not living with another person in a marriage, civil union or de facto relationship;
• Financially dependent, that is, not working full time or receiving a benefit or student allowance.

Child support can be administered either by the Inland Revenue Department (“IRD”) or can simply be paid by one parent to the other by agreement (unless the non-paying parent is on a benefit).

IRD

The parent who has the day-to-day care of the children can apply to the IRD to assess the amount of child support payable.  The IRD uses a standard formula to calculate how much child support must be paid each year.  The IRD then collects the payments from the paying parent on a monthly basis and passes the payments on to the parent with the care of the children.  The exception to this is if the parent with the care of the children is on a benefit, in which case the IRD pays the child support directly to the Government.

The amount a paying parent is required to pay depends on the following factors:

• Whether they live alone, or with a new partner;
• Whether they have any dependent children living in the house with them;
• How many children they are paying child support for; and
• What their annual income is.

For example, a paying parent earning $50,000 per year with no new partner and no new children, would be required to pay $124.10 per week for the support of one child.  If that parent then enters into another relationship, and has two more children to support (either his/her own children, or those of his/her partner) then the amount of child support is reduced to $68.40 per week.

Voluntary Agreement

Parents do not need to go through the IRD if they are able to come to an agreement between themselves as to how much child support should be paid (unless the parent who has the care of the children is receiving a benefit, then in most circumstances you must go through the IRD).  This is called a voluntary agreement and you can agree to pay as much, or as little, as you like.

If you are considering coming to a voluntary agreement, check the IRD website first, www.ird.govt.nz.  The “child support liability calculator” will give you a guide as to what would be a reasonable amount to pay.

If preferred, a voluntary agreement can be registered with the IRD who will administer and enforce the payments if necessary.

Shared Care

Child support can still be payable where a shared care arrangement is in place.  If you are a parent and you share the care of your children, then a different formula is used by the IRD to work out how much child support is payable.  For a shared care arrangement to affect child support payments, you must care for your children for at least 40% of the nights (146 nights) of the child support year (usually 1 April to 31 March).  Both parents can be assessed for child support payments under a shared care arrangement.

It is important to remember to let the IRD know if the living circumstances of yourself or that of your children change, or if your income changes, as this may affect the amount of your payments.

 It is also useful to remember that a parent may be able to apply for additional family assistance from the IRD or WINZ (www.winz.govt.nz).