Why Do I Still Have To Pay Child Support When I Share The Care Of My Child 50/50?

Shared care 50 50

In a fair world if you had equal shared care of your children, with your ex-partner, you would reasonably expect that the cost of the children would also be shared.

But what if it wasn’t?

What if you, as the mother, or father of these children had to pay the other parent and/or the Inland Revenue Department thousands of dollars a year, yet you didn’t earn a big wage.. (and your ex partner hadn’t worked for years)?

How would you feel?

Of course you would never want tax payers to have to pay for your children. You would expect to pay your half while they were at your house, and the other parent in the equation should be paying for the other half of the basic expenses.

Changes to the child support formula came into effect from April 1st, 2015.

These changes are affecting NZ’ers that were already struggling to make ends meet.

It is taking money out of homes, and away from children and giving it to the other parent (who can spend the money on whatever they like).
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In some cases this might be the fair thing to do, but in many situations money is being taken away from the parents that were already the primary financial contributors to their kids.

Previously if your ex didn’t want to work, and wanted to cruise along in life that was their choice and it did not greatly affect the other parent.

When you have to pay your ex money to sit on their butt while you work like a dog it can be extremely hard to make sense of it all.

IRD’s answer to the question of why someone has to pay child support in a 50/50 care situation

Even when the care of a child is shared equally, child support is usually required to be paid by the parent with the higher income.

This is to ensure that the child’s standard of living remains relatively unchanged when moving from one parents care to the other and reflects the support they would receive if the parent’s and child all live together.

Parents who share care together can choose to have a private arrangement outside of Inland Revenue as long as the receiving carer is not on a sole parent benefit.

Note that answer also applied to some that have more than 50% custody! And still had to pay for the other parent.

Example of 50/50 Care Where One Parent Pays

In this simulated example which we have conjured up with the IRD magic calculator we have parent x and parent y. X earns 70K a year and y owns there own business, manages to write off most of their expenses via the business and declares a taxable income of 10k a year.

From our calculations on 2 kids that would then point to the fact that parent x has to pay parent y $621.80 per month. This is despite them spending one week at x’s house and the following week at y’s house.

child support 50/50

What Can Be Done About An Unfair Formula?

Of course if you believe the formula is unfair you can file an admin review, however from the feedback we have had to date, this is extremely difficult to succeed with unless you have “extraordinary circumstances”.

One of our community members, who has found herself in this horrendous situation has asked the following questions of the government:

  1. How is this fair?
  2. Why am I being penalised for working?
  3. How do my children benefit from this?
  4. How do you justify making me pay 90.02% of the child care costs when I only have my children 50% of the time? i.e. Why do I HAVE to pay for my ex-husband to look after his children?
  5. Why isn’t my ex-husband expected to work full time?

The problem is that the answers received to date just rehash how the formula is worked out and advise that if one considers it not fair then there is the option to do an admin review.

This does not help anyone understand why this is the way it is.

Surely with all the millions of dollars that have been spent, some kind of reasonable explanation should be forthcoming?
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We have essentially, it appears, copied a system similar to what Australia implemented in 1998.

When we look at Wikipedia for Australian child support it states as one of its criticisms:

For those where 50/50 shared care agreements are in place further issues have arisen often creating bitterness, fuelling arguments and generally breaking down goodwill between the parents. An example where both parents are gainfully employed yet one parent has to pay the other parent a percentage of their income.

Many consider this unfair as one parent is simply collecting money from the other when they are more than capable of paying their own share. The argument being that if both parents share care and both parent pay 50% of all shared costs why would one parent have to provide the other parent with more money?

The CSA don’t appear to have a specific clear response to this. Responses have ranged from “it’s a little top up for the kids” to “it’s just the rules of the system”. Critics of this particular aspect of the system argue it should be on a case by case basis yet response from CSA representative has been that it’s too much micromanagement.

The Wikipedia article is a little short on references, but hopefully you get the idea.

Why did we not learn from the mistakes of our tran-tasman colleagues?

If you were in charge of implementing a new system worth 163 million dollars, would you not look at any current concerns and try to address them as part of the implementation?

What Should Happen in a 50/50 child support situation?

We believe that each parent is equally responsible for the upbringing of their child.

The starting point should be no money changes hands, and expenses should be shared.

If one party earns substantially more than the other, they can agree to pay more of the expenses.

This solution offers the following benefits:

  • There is more incentive for both parties to work hard and earn money. (the current method, could be perceived as discouraging both parties)
  • IRD does not need to even be involved saving the country money spent on time, and administration
  • There will be less bitterness and aggravation between parents, with both parties being made responsible for the support of the children they brought into this world
  • Laziness and/or hiding behind accountants will not be a financially rewarding career option

Please share what is happening, a lot of people don’t understand how unfair this new formula is.

We want both parents to take responsibility for their children. Not just one of them!

Come and join us on Facebook.

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Comments

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6 Comments

  1. “Parents who share care together can choose to have a private arrangement outside of Inland Revenue as long as the receiving carer is not on a sole parent benefit.”

    this is a lie. I know because a friend of mine always maintained a “private arrangement” with her ex even while on a sole parent benefit. She was firm and insisted to WINZ that there was a private arrangement in place and that child support was not an option.

    I realise not all parents are this considerate but up until recently I was battling with my ex wife about having to pay a fairly big monthly amount purely because she was on a benefit and the IRD (and WINZ) attitude was that I was subsidizing her benefit. The money I paid did not go into her pocket it went into theirs.

    Therefore I find the IRD’s excuse:
    “This is to ensure that the child’s standard of living remains relatively unchanged when moving from one parents care to the other and reflects the support they would receive if the parent’s and child all live together.” – hard to swallow.

    Child support works when dead beat parents are being slack – it doesn’t work when the government uses it to recoup losses to their welfare system.

  2. In my situation, I have 50/50 shared care of my son with his mother. I work full time but my ex (who has remarried with 2 more children) was a stay at home Mum, and is now studying. Therefore she has no income. Because of this I have been assessed to pay $4,800 per year. This means that I am paying around p/w for the 26 weeks per year that my son is with his mother. Why am I being constantly penalised because of her lifestyle choices? The sad thing is that my son is the one that misses out as this money has to come out of my household budget.
    Inland revenue has told me that I should ask for a shared care arrangement, which I did but she refused.
    I don’t see how this is fair.

  3. 50/50 care should have no money changing hands . A parent should not be able to claim child support in this situation as it is very simple. The expenses for school and agreed extra curricular activities can be split 50/50 and paid directly by each parent to the provider (ie school, sporting code) if one parent earns more than the other parent, the child will natural benefit from that parent when in their care. (This parent will often by default of the poorer parent pay for more for the benefit of their child anyway, they are also already caring for them 50% of the time) It is a nonsense for IRD to say “it is to ensure that the child’s standard of living remains relatively unchanged when moving from one parents care to another and reflects the support they would receive if the parents and child all lived together” . News flash the family unit has broken and the parents are moving on with their new , often very differing and changing lives. The child natural benefits from either of their parents who have more income than the other parent or who may improve their lot financially etc by being in that parents care 50% of the time. Why should that parent have to ‘up’ the standard of living for an ex partner where that ex has elected differing lifestyle choices…. It is totally unfair, nor equitable to have one parent paying the other for their lifestyle choices that often have occurred well after the divorce! Your ex partners in a 50/50 shared care arrangement are not your top up allowance per month because you choose not to improve your own individual financial position or are in a lesser financial position to them. No doubt through any matrimonial split everything you had jointly has already been split 50/50. Just as ongoing expenses for your child can be split , there should not be a net liability by one parent after this just because you earn differing amounts !
    We have had this exact situation for years and the mother of my step daughter who is in our 50/50 care has received substantial payments each month because of her lifestyle choices to work part time & have more children since her divorce to my husband. She also fully expects 50% of the child’s schooling/extra curricular expenses etc to be paid on top of the substantial monthly payments she gets. All because IRD told her the net liability is just her top up between her ex’s and her income!!! Yet she elects to remain underemployed on part time hours & had more children (so gets a living allowance removed from her income for these children ) further widening the gap on paper between her and my husbands incomes. Meanwhile over the years he has improved his financial position and promotion at work. Why does he effectively end up paying more to his ex wife for her new biological children that are not his legal or financial responsibility and for her choice to work part time ??? Because effectively that is what the formula creates for him in an increased net difference between their incomes !!! This is so unfair and creates animosity, conflict and even further break down between separated parents. It also creates a reward system for the parent who chooses to reduce or not improve their financial position through lifestyle choices they have made long after a divorce! It does not benefit the children caught in the middle of this rediculous 50/50 shared care formula !

  4. My husband’s ex got almost everything from him when they divorced and he still has to pay child support every month with 2,475nzd per month just because he has to work hard and earn more money then her while she just works part-time as a cleaner. She bought herself a nice and warm house after divorcing and now with her small income I don’t know where she get money from to pay her house off every month, where she get enough food to feed her mouth and paid for her mom to travel from Russia to stay with her in nz for more than a month cuz we know her mom is poor.
    With the amount my husband has to pay child support every month, she should save some to buy things for the kids when they need for example the daughter said she wanted to have a laptop for her study then right away my husband’s ex come up an email that he has to pay for that if not she was willing to sent him to IRD to solve this.
    I think child support is paying for kid’s living and my husband has to pay a lot cuz the rule says for kids good life not paying for the ex lifestyle. This is completely not fair.

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