Hon Peter Dunne
Minister of Revenue

5 October 2011

Dunne: Bill to improve Child Support introduced

In introducing the Child Support Amendment Bill to Parliament today, Revenue Minister Peter Dunne said the changes it would bring would ensure the Child Support scheme was fairer and more efficient.

Mr Dunne said the Bill being taken to Parliament had been strongly shaped by an extensive public consultation process.

“People have very strong views on child support. It deals with the welfare of their children, and it needs to be a scheme that fits with the realities of parenting and raising and supporting children today.

“And in all of that, it needs to be seen as fair. I believe we are achieving that with this Bill,” he said.

The bill will:

• revise the child support calculation formula to include a greater recognition of shared care and the income of both parents
• update the scheme to take account of other key factors such as new estimates of expenditure for raising children today, and
• improve the rules for payment, penalties and debt.

”The scheme was introduced in 1992 and so much has changed since then in society, notably with both parents more frequently working now, and child care arrangements much more fluid and flexible. The child support scheme needs to reflect those changes,” Mr Dunne said.

He said that the scheme’s current payment, penalty and debt rules can discourage payment of child support, and therefore disadvantage the children involved. Changes such as compulsory deductions from salary and wages and a reduction of penalties in later years should help to reduce these concerns.

The Child Support scheme is intended as a back-up when parents are unable to make satisfactory private arrangements for the financial support of their children and currently helps provide financial support to approximately 210,000 children.

“By making the scheme fairer, the Government will be putting in place the right incentives to ensure that child support payments are made for these children and made on time,” Mr Dunne said.

More information is available on Inland Revenue’s tax policy website www.taxpolicy.ird.govt.nz

ENDS

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