In New Zealand, the child support scheme is governed by the Child Support Act 1991 and is managed by the Inland Revenue Department (IRD).
If two parents separate, one may have to pay child support to the other, as financial support for the costs of raising the children. Whether child support will have to be paid, and how much, will depend on several factors, including how much each parent earns and how much time the children live with each parent.
In considering whether child support must be paid, the scheme considers both parents’ incomes, and weighs the difference in their incomes against the difference in how much ongoing daily care each parent provides for the children.
If a parent does have to pay child support, they are called the ‘liable parent’, and the amount they must pay takes account of the typical costs of raising children. It does not simply depend on how much the paying parent earns. It also takes into account factors such as the paying parent’s own living costs and whether they have other dependent children. Section 5 of the Act sets out that child support applies to a ‘qualifying child’ which means children and young people under the age of 18, however, an 18 year old will still be covered by the scheme if they are still at school. To qualify they must also either be a New Zealand citizen or ordinarily resident in New Zealand.
Regardless of that age limit, child support is not paid for a child if they start living with someone in a marriage, civil union, or de facto relationship, or if they become financially independent (working more than an average of 30 hours a week or receiving a benefit or student allowance).
Voluntary and Private Agreements for child support
Instead of one parent applying to IRD for a formula assessment of child support, the two parents can agree to make their own child support agreement – a ‘voluntary agreement’. The agreement must be in writing, and it will need to be registered with IRD who then collect and enforce payment. The agreement must be for regular payments, either weekly, fortnightly or monthly. The amount to be paid under the agreement must be at least $520 for the year ($10 a week).
The voluntary agreement should state; that the liable parent accepts he or she is responsible for paying child support, how much will be paid, how often the payments will be made, any extra payments the liable parent will make – for example, paying school fees.
You can also pay child support by way of a private agreement. You decide the amount and manage the payments without the involvement of IRD. If neither you nor the caregiver receives a sole parent or unsupported child’s benefit, you can make a private agreement and IRD does not have to be involved.
We therefore recommend that you seek legal advice about the different types of agreements and how these might impact on you before agreeing to a private arrangement.
A formula assessment is the most common form of child support agreement. Parents and non-parent carers can apply for a formula assessment. Based on each parent or non-parent carer’s circumstances the IRD works out who pays child support and how much. The IRD will collect money from the paying parent and pass it on to the recipient.
A formula assessment is a good option when you want the IRD to decide the child support amount and make sure payments happen. It is the best option for you if:
- you cannot agree on an amount
- you want us to decide on an amount
- you want us to make sure payments happen and follow up on missed payments
- you do not get on with the other parent
- you do not want to deal with the other person.
However, if you are on Sole Parent Support or an Unsupported Child’s Benefit you must apply for a formula assessment at the same time you apply for that benefit. The assessed amount will go to Work and Income (WINZ) to help pay for your benefit and you will receive any remaining amount.
A formula assessment ends when a child no longer qualifies, usually when they turn 18 or when both people agree to change to another type of agreement, or when the person or people caring for the child chooses to end the agreement.
How is child support calculated?
The amount of child support payable can vary over time because of changes in the financial or personal circumstances of the parents or child.
The formula used to calculate child support payments is quite complex and provides flexibility to consider a range of factors. Generally, these factors include:
- both parents’ incomes
- both parents’ living costs
- the amount of time the child is in each parent’s care
- the cost of bringing up a child
- the costs of other children in their care.
If the carer is not a parent, then their income is not included in the formula.
Can I object to a decision made by IRD?
Sometimes a child support assessment may not fully consider the special or unusual needs of a child, or the circumstances of a parent or carer. Alternatively, parents who pay child support may have a change in circumstances since the assessment which now makes it difficult to meet these payments. This could occur, for example, through the job loss or other incapacity of the payer.
You can apply for a child support review, also referred to as an administrative review, when you think the amount, worked out in the formula assessment does not take your special circumstances into account.
You can apply under one or more of the 11 grounds for a review, which cover things like having another child or person in your care, unexpected costs, or inability to earn income. Either the liable parent or the receiving carer can apply for a review. The other parent or non-parent carer involved in the child support assessment will have the option to respond with their point of view.
Child support reviews are free and managed by IRD who seek to finish reviews within 10 weeks of receiving your application. If you think an assessment has been calculated incorrectly or that your personal and financial circumstances have not been fully considered, our team can assist you with preparing an application for the assessment to be reviewed or lodging an objection.
What happens if my ex-partner won’t pay child support?
If the child support arrangement is through formula assessment by IRD, or a voluntary agreement that was registered with IRD, you can contact them if the liable parent stops making child support payments (or doesn’t pay the right amount or pays irregularly etc). If the paying parent is an employee, their employer must make child support deductions from their pay. IRD can organise to recover overdue payments, by arranging to have deductions made from your ex-partner’s wages or salary; benefit payments; ACC payments; bank accounts; and other payments such as from a trust account or superannuation pay-out. If your ex-partner has moved to Australia, IRD can ask Services Australia to collect child support money from them.
If you have a private child support agreement that IRD is not involved in, and you disagree about the number of payments or payments have been unreliable, you could switch to a different way of getting child support, you could choose to do one of the following:
- have the child support agreement registered with IRD so they arrange and enforce the payments you had agreed to (this is called a voluntary agreement); or
- apply to the IRD formula assessment so that IRD calculates the child support payment amounts and arranges and enforces the payments.
- If you (the parent who is meant to be receiving child support payments) want to apply to IRD for a formula assessment, you do not need the other parent’s (the liable parent’s) agreement, but you should let them know about it.
- If you already have a voluntary child support agreement i.e. agreed to by both parents and the payments are arranged by IRD, you can notify IRD and they can enforce the agreement.
However, you should note that child support payments as calculated from a formula assessment might not be the same as the amount you agreed to in your private agreement.
Arrangements between Australia and other countries
New Zealand has arrangements with several countries known as ‘reciprocating jurisdictions’ and can assist with the management of child support payments between parents living in different countries. This can be a complex process and the efficiency of such arrangements is generally influenced by the other country’s laws and processes. Special arrangements are in place for the payment and collection of child support payments between New Zealand and Australia.
How can we help?
It is important to understand your legal rights and obligations under child support laws and obtain advice if you are unclear or having difficulty paying or being paid child support. We can assist you with navigating this complex process.