The Child Support Scheme is managed by the Inland Revenue
Department of the New Zealand Government (IRD) and operates under
the Child Support Act 1991 (the Act).
The Child Support Scheme (Child Support) is financial support
paid by parents who either do not live with their children or who
share the care of their children with another person.
The Act provides a formula to work out the amount of child
support payable. In a nutshell, it uses the adjusted taxable income
of both parents and subtracts standard amounts for personal living
costs and the parent's other children, while taking into
account the care each parent provides for the children and the
costs of raising them. A care cost percentage is then determined by
Child support is not mandatory for parents or carers who do not
receive a sole parent or unsupported child benefit from Work and
Income New Zealand, as those parents or carers can make
arrangements between themselves. However, if an arrangement cannot
be agreed, those parents and carers can seek the assistance of the
IRD to determine the amount of child support payable.
On 1 April 2015 the first set of major changes were introduced
to the 20 year old formula used to calculate child support. We
summarise the major changes as follows:
Both parents now receive assessments that take into account
both of their respective incomes and it provides allowances for any
other children of their own who live with them (taking into account
the age of those children and the defined current cost of raising
children in New Zealand).
The parent's assessments no longer provide allowances for
partners or children living with that parent who are not their
The threshold of the amount of care recognised by the IRD has
been reduced. Previously the child support formula only took into
account if a parent cared for a child 40% of the time; however,
this has now been reduced to 28% of the time or 103 nights or more
a year, or two nights a week.
From 1 April 2016, further changes will be incorporated. We
summarise the major changes as follows:
The qualifying age for children eligible for child support will
reduce from under 19 years to under 18 years, unless the 18 year
old child is still enrolled in and attending school.
Changes to penalties and write off rules for child support.
These include: replacing the current 10% initial late payment
penalty with a two stage late penalty payment of 2% on the day
after due date and a further 8% eight days after the due date,
reduction in incremental penalty charges, and relaxing the rules
pertaining to writing off penalties and interest in particular
Introducing two further grounds for administrative review of
IRD decisions to the current 10 grounds, which take into account
re-establishment costs and debt offsetting.
It is estimated that of the approximate 137,000 parents paying
child support, 33,000 will have their amount increased under the
new changes and a further 46,000 will pay less, with 58,000 being
unaffected. More information can be found on the
Child Support page of the IRD website.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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