6 Reasons Why Richie McCaw Should Become the Minister of Revenue (IRD)

Word on the street is that Richie is soon to be looking for a new career.

We think he would be great at running IRD, and here are our reasons why:

1 – Richie would NEVER try to align us with Australia

He understands that copying a bad system will never help you win the game.

Richie knows a good organization has its own unique game plan, and sticks to it.

2 – He knows how to count

Counting is very important in rugby:

  • You need the right amount of players on the field
  • You can only have so many in the lineout
  • It’s important to keep an eye on the scoreboard

Richie would crunch a few basic numbers and understand that a kid costs more than $73.75 a month to survive.

He would also probably question that a 13 year old girl costs $1587 a month and try to find some sensible middle ground where ALL kids were treated fairly.

3 – He realizes that things are not always black and white

Richie, I think it is fair to say, knows when a rule doesn’t relate to common sense.

He is not afraid to push the limits and challenge the boundaries of the rules.

Not everyone likes, or agrees with what he does but he does it anyway.

4 – Richie is great at giving honest answers to hard questions

There is noone better at facing up to the country and answering the tough questions.

He would never hide behind legislation, or simply not answer important questions.

5 – He understands what 50/50 means

Rugby is all about 50/50 decisions.

  • It is, as we all know, a game of two halves
  • There are plenty of 50/50 calls by referees
  • If you don’t get the breakdown right you will probably lose the game

There is no way Richie would let a parent like Helen, who has 50/50 custody of her kids, be forced to pay money to the government because of another parent that didn’t contribute – we just know he would understand that, and many similar situations are wrong.

6 – Richie knows how important kids are

Dan Carter
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This is the man that turned up to a primary school and apologized to the kids that it was him instead of Dan Carter.

R eliability
I ntelligence
C haracter
Honesty
I nspiration
E xcellence

Richie – no matter what happens on the early hours of Sunday morning we as a nation stand strongly beside you.

We look forward to watching proudly, as you move on to the next stage of your career.

Do you think Richie would make a great Minister of Revenue?

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50/50 Care dilema – Looking for answers and discussion

50 50 care dillema

The current system does not appear to deal well with all cases that are 50/50 and the below is an example.

We have real people in these situations reaching out to us all the time, and really struggle to give helpful advice as we have a child support formula that seems to take money away from families that are trying to care for their kids.

This was sent to us anonymously – we would really value your feedback as always:

So my husband and I have his 2 children shared care 5 nights a fortnight.

We are going through family court to try extend this to 50/50 split.

At first ex wife (their mum) was fighting it and now is saying that we can have 50/50 split if we pay half of everything – school uniform fees etc plus extra activities (they do a large amount of activities which we have no say in) thing is my husband pays child support and she is on a benefit so she doesn’t actually see the money.. (not really our problem) ird have worked it out and say he will still be paying 220pw so $880 per month!!

And on top of that she wants us paying half of everything.

The way I see it is 50/50 split each home is already sharing costs of everyday needs so no money should need to exchange for that and the $880 per month he will pay will cover his half of everything else. Why should we be punished and made pay more on top of that because she is on a benefit.

At the moment he is paying $1300 per month.

If she was not on a benefit she would receive $880 per month thru child support assessment, would she still then expect more? I would hope not.. so why do we have to pay more because she choosing to be on a benift.

Children are 8 and 11.

Ps we also travel one side of chch to the other for school ect activities ect

There are a number of questions that come up regarding this.

Firstly why does one party have to pay $880 in child support to the government, when they have their kids half the time?

We know the government is recouping the benefit money, but is it really fair to take that from the other parent?

Should it not be one parent pays the costs when they have the kids in their house, the other pays when they are with them and expenses are shared?

It seems like an impossible situation, that doesn’t appear to have the child support system looking out for the best interests of the children.

If you were this Dad what would you do? Offer to pay the 50% of extras even though you were already paying $880 a month? Or what is your suggestion/thoughts?

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Gaping Loopholes and Issues With the Child Support System In NZ

Do you struggle to understand how exactly the NZ Government came up with the current child support system? Are you a paying parent that works your ass off yet you are completely broke? Are you a receiving parent that works your ass off and yet you are completely broke?

Try to imagine anything worse than being tasked with creating a child support formula that actually worked fairly.

Much of the time the system is required to enforce a type of contract between two people that intensely dislike each other.

You have 6 main groups of humans directly or indirectly affected by child support, 5 of which are very outspoken.

  • Paying parents
  • Receiving parents
  • Partners of paying and receiving parents
  • Parents that should receive but don’t
  • Parents that should pay but don’t
  • Kids

(some people cross multiple groups – yes we realize that but are trying to keep the explanation as straightforward as possible)

The only group that doesn’t complain if things do not appear to be fair is of course the most important group – the kids themselves.

Each group has different priorities and views of the world. In many cases a paying parent has no idea of what life is like as a receiving parent, and vice versa.

The system as it stands now actually makes one person financially accountable for the actions and life choices of the other, this is despite them being no longer in a relationship.

  • Example 1: If the receiving parent has another child in a new relationship the paying parent will likely have to pay more due to circumstances entirely out of their control.
  • Example 2: If the main paying parent has another child then the receiving parent will normally receive less.
  • Example 3: If one parent works less hours or quits their job the other will have to pay more money.

Parents ARE accountable for providing for their kids, they should NOT be accountable for the personal life choices of the other parent.

Child support is like being forced into a marriage with your worst enemy. It is rare to find parents that can form an agreement that doesn’t involve a gun to the head (aka IRD) of one or both parties.

The loopholes within the current child support system

There are currently (at least) three glaring and gaping loopholes that can be used to either get more, or pay less child support – these are important to address because they directly affect the lives of the most important group that this whole system is meant to be based around (remember those little humans we mentioned earlier on).

The Glaring Loopholes:

  1. Quit ones job and go on the dole
  2. Go into business and cover up true income
  3. Find a country to live in where you can hide from the NZ IRD

The first two loopholes work well for either receiving or paying parents. The third is usually only an option for paying parents.

Those are the loopholes that enable people to get out of paying what they should be paying, or to receive more than what they should be getting (child support is now based on the incomes of both parents).

And as if these loopholes were not enough of a problem in themselves, we then have the issues….

Issues with the child support system

When looking at the issues within the child support system it is easy to see that we are looking at an enormous Pandora’s box of icky problems.

Time and time again, these and other issues have been brought up to our members of parliament as well as the IRD.

IRD even came onto our website a couple of months ago in order to answer everyone’s questions. If we were lucky enough to get an explanation, it was at best a brush off.

It is clear to see that the powers that be wish to hide from these difficult, and hard to solve, problems.

Unless a huge fuss is made we are allowing our Government representatives to continue to hide their heads in the sand, like a herd of petrified ostriches.

head in sand
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1./ Living allowance Issue

To understand the true significance of this issue, we need to look at a study done every year, by the government around the average living costs of private households in NZ.

The study is called the Household Economic Survey.

From one of these studies the IRD created a guide called the AD694 which is to be used by lenders to ensure that borrowers are correctly reporting their expenses.

In other words if you are trying to borrow a large sum of money, and you state your household expenses are $480 a week and you live in Auckland they would probably not believe you as the average household living expenses for Auckland are reported (as per the IRD guide) to be $750 a week.

The point of all this (in case you were wondering!) is that IRD know full and well approximately how much it costs to live, on average, around the different towns and cities in NZ – YET when calculating the living expenses for a child support paying parent the amount is calculated at only $17,687 per year – $340 a week.

When asked why the amount is calculated at such a low amount the IRD could not directly answer how the figure was arrived at. They told our community that it is based on a sole parent support amount, which is a pointless answer as a benefit allows the person receiving it to also apply for an accommodation supplement – the child support living allowance does not include an accommodation supplement.

We have covered this more fully in a previous article.

Suffice to say the amount is ridiculous and not only out of date, but completely different to what the IRD’s own research is telling them.

Sidenote: In Australia the living allowance is approximately 50% greater at NZD $26101.58 (AUD $23,610)!

2./ How is Child Support calculated?

You would think that such a question would be easily answered by the organization that is responsible for doing the calculation however the fact is they simply cannot tell us. The IRD, it is fair to say, cannot explain why or how our child support is calculated at the rate that it is.

As part of the calculation used a “basket of goods” approach was implemented – unfortunately neither IRD, nor the department of statistics (who apparently supplied IRD with the information) can tell us what was in that basket of goods despite a request under the official information act.

Statistics NZ does not hold the exact list of goods that was used by the study’s authors to estimate the costs of raising children.

Please refer to our article on this for more information.

3./ Private agreements?

We are also concerned that private agreements were meant to be the default – the IRD governed child support system was to be a backstop, yet that is not the reality.

Private agreements are very rare, an exception you could say.

Surprisingly if the receiving parent is on a benefit there is no option to even have a private agreement.

Is it even lawful to state that private agreements should be the overriding way to go, and then not allow them?

Check out around 2:30 into PD’s speech.

4./ Wild extremes of the formula show that it is NOT based on the cost of a child

Why when we are told that child support is worked out on the cost of a child, can one child be worth so much more or less than another?

E.g (Actual real world examples):

  • Jonathan pays $1587 for one child per month.
  • Apryl receives $62.80 a month for her child.
  • Tracey receives $0 a month for her child.

Please refer to our article on the worth of a child for more information.

5./ Different rules for similar scenarios

In the Working for families entitlement calculation both partners incomes are included despite the lack of biological linkage. Why then is it not the same when calculating child support living allowance and why is the paying parent treated as single when they are a in a relationship?

For more discussion on this check out our article.

How can it be this wrong?

The NZ Government doesn’t appear to need to justify or explain anything. (Any serious questions or doubt cast on the system can, from what we have experienced, be completely ignored.)

The majority of the NZ public seem to think that issues with child support should be avoided like the plague.

With such a deeply entrenched system it is very hard to break through the status quo. But even though it may be nearly impossible, or at least incredibly hard to evoke change, that doesn’t mean that we should all throw it in the too hard basket and give up.

What happened to our millions of dollars?

The first $163 million spent on our upgraded system was, from what we can tell, used to copy some parts of an already broken Australian system.

Sweeping reforms to the 27-year-old child support program will be recommended by the bipartisan committee, which is due to table its report in federal parliament today after assessing more than 11,000 public responses during a 16-month inquiry – The Australian July 17th, 2015

The Australian Institute of Family Studies report released this week shows seven out of every 10 parents who pay or receive child support are completely bewildered as to how child support payments are calculated while another 20 per cent of parents thought they knew the rules but were wrong. – The Nationals Australia

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..the desire to align the child support system with that of Australia – Hon Todd McClay

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The $163 million cost of changing the child support rules will increase further when the Inland Revenue Department implements a completely new computer system in the next few years. – NZ Herald March 2015

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Copying other parts of the Australian system, like the living allowance, would have cost the country even more money – so just got left out of the equation.

Imagine if the NZ government actually wanted to make a fairer and better system, wouldn’t they want to work with those that were struggling?

Can the government and IRD not admit the current system is extremely flawed in many ways?

Wouldn’t the children that are losing out on not only money, but time with (both) their parents be considered more important than trying to sweep all these issues under the carpet?

What is best for the kids clearly doesn’t come into it. If it did we would not hear about cases where the government took money away from parents and their kids and put it into it’s own coffers.

From what we can see the only real way out of this spiral of destructive money sucking policy is not by trying to convince everyone how right everything is, but actually accepting how broken it is.

How refreshing it would be to have a government party that took ownership of these issues.

What Do We Propose?

What we propose is to approach the issues starting with the child’s best interests:

KEY drivers

That every child under the Child Support system gets a “fair” amount of $$ support (we know the government has failed here with some kids getting very little or nothing).

Remove the WRONG incentives from the system, including.

  • Reducing/increasing access (nights) to increase/decrease the amount of CS received/paid.
  • People not working to increase/decrease the amount of CS receive/paid.
  • Having another child to avoid working and alter CS/Benefits.

Note: Not everyone abuses the system but those that do cause a lot of hardship for the rest.

The government by default should pay the CS where the paying parent isn’t/cant:

  • The government chases the money up (Norway model?).
  • This would allow them to get at people hiding their income
  • This is such an easy win…if you are the parent…you will be billed for your children.

Remove the income based model:

  • It’s not fair and drives the wrong incentives.
  • There is no proof on what the government say about the more money, the better the kids are off AFTER separation so this should be questioned.
  • Flat rate for a child (based on age and maybe sex) that BOTH parents are responsible for 50% of as a starting point.
  • Nights of contact still come into it, but one parent cannot deny access to the other (without good reason).
  • If one parent can’t survive, they apply for a extra benefit, NOT an increase in CS from the other parent.
  • Separate Child support from any other benefits and make it transparent to both parents.

We Need YOUR Support!

Our aim is to:

  1. Define a clear and better path forward.
  2. Petition the NZ Government. Once it’s tabled, it will go to a select committee to be looked at more closely.

We don’t want your money, but we would eventually like to call on you for your signature as we head down this path.

Please leave us a comment to let us know your ideas on what we are proposing.

Also please join our mailing list so we can contact you later:

Please share with anyone you know that will find this interesting, disturbing or otherwise!

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Seeking Parents of Unsupported Kids – The Lost Children

I can’t actually be the only person in the country with an unsupported child can I?

Can You Help Me?

The Citizens Advice Bureau are considering taking IRD to task and are looking for similar issues to mine from other families around New Zealand.

The information they require is minimal however they are seeking cases like mine where a blended family with one (or more) non-biological child in the home is no longer supported – the child or children were considered dependants prior to 31st March 2015 but from 1st April they are no longer dependants on either partners assessments for child support.

My situation is this:

  • From 1st April 2015 my daughter was not taken into account in my partners assessment for Child Support (she was prior to 1st April).
  • Her biological father is not a NZ Citizen, does not reside in any reciprocal child support country (eg., Australia) and DOES NOT PAY ANY CHILD SUPPORT and never has.
  • We are not entitled to any assistance because for all other legislation we are considered a family.
  • Our household lost $400 a month, that may not seem like much to many but it is a lot to us – effectively it is our grocery bill.
  • An administrative review was undertaken by my partner – there was no change, my daughter is still not considered a dependent.
  • There is no way for me to obtain support for my child therefore she (and I) are dependant on my partners income.
  • IRD legislation ignores our situation completely and the fact that we are now $400 worse off every month.

Citizens advice suggest perhaps these scenarios:

1. Blended families where one biological parent does not live in the country (or a reciprocal country) and DOES NOT pay child support.

2. A blended family where one biological parent has “disappeared” and therefore DOES NOT pay child support and there is no other assistance or benefit available.

3. Blended families where a biological parent is deceased and the family/other parent/children are not entitled to any benefit assistance.

4. Or any case where because of the legislative changes there is now no assistance for one or more children in a blended family unit.

NOTE: If your blended family unit is entitled to Working For Families Tax Credits or any other benefit or reduction then this request does not apply.

If any of these situations are similar to yours please help me give them the information they need to push our joint concerns.

Provide your name, phone number, email address and a brief description of what your situation is.

Your information will not be used for any purpose other than to convince the Citizens Advice Bureau that these situations are real.

They may want to contact you and you will have all rights to provide no further information or to alternatively help state your case.

Thank you all for reading this. I can’t believe I am the only person in New Zealand that has this situation.

Tracey Durham

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IRD’s Own Household Expenditure Guide Makes Mockery of Child Support Living Allowance

AD164 Guide

To have people believe in you as an organisation you need to do two things:

First, you should be consistent in your approach across different areas. People feel unfairly treated if they can’t understand how things that affect them, are worked out.

Second, own up to your mistakes. If something is clearly wrong you will get a lot more respect by admitting it rather than trying to explain it away with gobbledygook.

Here’s what we are talking about:

When determining the living expenses for a child support paying parent, one has to wonder where IRD got their figures from?

The general living expense allowed is $17,687 a year (gross before tax) for a paying parent, no matter where they live or whether or not they are supporting a partner.

What we stumbled across:

A member of our community directed us to a current guide, published by IRD that points towards a massive disparity between a) what IRD state are general living costs, and b) what IRD allow for living costs.

What is the purpose of the household expenditure guide?:

This guide provides information on some of the categories of living costs that are generally incurred by New Zealand households. It provides a base to use as a first step in determining whether household expenses have been reported correctly and therefore determine any ability to repay debt.

Our understanding is that the costs in this guide, published by IRD, are indicative of the living costs generally incurred by NZ households.

This guide is part of the Government’s responsible lending code.

It gets worse:

Lets do a quick comparison of the living allowance for child support paying parents, as calculated by IRD, and what IRD state are the living costs generally incurred by NZ households, broken down by region.

Living costs, according to the IRD guide, for a single person household (in yearly $$):

Rural: $29,593.20
Auckland: $39,936
Waikato & BOP: $31,304
Wellington: $36,738
Rest of NI: $32,728.8
SI Urban: $29,827.20

Compare this to the living allowance given to parents that pay child support: $17,687.00 (Gross)

What? Less than half in some cases?

It is no wonder people are complaining! The living allowance given for a paying parent in Auckland is just over $17k a year, and IRD’s own study of general living costs (nothing fancy) is almost 40K a year.
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How then, have IRD worked out the child support formula living allowance?

When we asked this question recently on our Facebook page, IRD themselves advised us how it was calculated:

Thanks for your questions. We do appreciate that every families’ costs and circumstances are different.

Under the new rules, the living allowance recognises the living cost parents have to financially support themselves. It is what the government considers is the minimum level of income necessary to cover a parent’s own living costs, before child support is assessed.

It is income that is not considered when making a child support assessment.

If the parent also has other dependent children of their own living with them, they will be entitled to a separate dependent child allowance. Dependent child allowances are also taken off the parent’s income before child support is assessed.

For a parent who earns more than the living allowance and dependent child allowance, they will still have income over and above their child support payment available to support themselves.

The living allowance for a parent is the same amount as either the sole parent support or supported living payment benefit.

As with the benefit, it is not broken down into amounts for different types of expenses.

They also state that it is the same as the sole parent support benefit. However this is not correct as on a sole parent benefit you can also apply for an accommodation supplement that varies depending on where you live. There is also additional assistance available for childcare expenses.

IRD also made the following statement in answer to a similar question:

The living allowance recognises the cost a parent has to support themselves.

How exactly does it recognize the cost when IRD’s own guide states the cost is far, far more?
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Why are IRD not accountable for providing a detailed breakdown of the living allowance?

How can they just say it is the same as the sole parent support benefit when it is clearly not?

Recently we were told that IRD are trying to “align” with Australia.

Did you ever wonder what the living allowance is over the ditch?

Another eye opener:

The living allowance in Australia is $23,610 a year in Australian dollars, which today is $26,563.82 New Zealand Dollars.

Child support paying parents in Australia, the system that IRD is trying to align us with, get a 50.85 % higher living allowance.
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Not 2%, not 5% but more than 50%!

australian living allowance

IRD need to decide which of the following statements are correct:

1./ The current living allowance of $17,687 a year is a ridiculously low amount and by no means reflective of today’s high living costs (in which case some paying parents, that are not on high incomes are being forced into critical financial situations where they simply can not make ends meet).

2./ The IRD Guide AD164 is grossly over inflated, not an accurate reflection of actual average living costs and should therefore not be used as part of the responsible lending code.

Do you think the living allowance is fair?

Could you, as an adult (who more than likely has to look after kids for a portion of the week as well as yourself), live on 17k a year regardless of where in NZ you lived? We realize of course that some may earn enough above and beyond the living allowance and will have extra money available, however a lot of us do not, and are therefore really struggling.

We will continue to highlight obvious flaws in the new child support formula as and when we find them.

Please join us on our Facebook page and share this article with your friends and family.

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Items Used In The Basket Of Goods Referred To In The Costs Of Raising Children Study

Basket of Goods

As many of you may have read the 2010 Costs of Raising Children Study ( used as a guideline by IRD in the recently introduced child support formula ) has two approaches.

The first approach uses Statistics New Zealand’s Household Economic Survey (HES) data to estimate what parents actually spend on raising their children at different levels of household income.

The other approach is the basket of goods approach, the key part being..

..Using retail prices from the Consumers Price Index (CPD, a basket of goods and services considered appropriate for a given living standard is priced.

We wanted to find out what exactly was in the basket of goods, that was included as part of this study. This is important, because from what we have been lead to believe, this is related to the amount of child support parents pay.

Under the Official Information Act (1992) one of our community requested this information, initially from IRD.

IRD then directed the question to Statistics NZ.

A letter of reply has been received from Statistics NZ which states that the study selected approximately 500 goods from the larger list of goods that the Consumer Price Index is calculated from.

You can read that larger list (the CPI) here.

The letter goes on to say…

Statistics NZ does not hold the exact list of goods that was used by the study’s authors to estimate the costs of raising children.

It then talks about the goods used in an Australian study, which we can only hope is nothing to do with our cost estimates.

Here is the letter, so you can see for yourself.

the list

Statistics NZ doesn’t have the list, and the IRD also couldn’t provide the list.

IRD have been less than helpful in supplying information. It should be at their finger tips and readily available to the public of New Zealand.

A number of mistakes are starting to accumulate:

What do you think about this? Is this not a straightforward request?

As a group we are now planning to prepare a document that will be sent to the Office of the Ombudsman as we do not feel that we are getting reasonable answers to our questions.

You have the right, by way of complaint to the Office of the Ombudsman under section 28(3) of the Act, to seek an investigation and review of this response to your request.

If you also have questions you feel are left unanswered, please share in the comments and we can look at including them as well.

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Question Replies From Hon Todd McClay

buzz from the beehive

On the 15th May one of our community put forward 3 important questions to Hon Todd McClay. The information was requested under the Official Information Act (1982).

These are the replies that have been received back.

1.8.1 Provide what the true cost is to raise a child in New Zealand that the government and IRD have used and refer to in this bill, not the income based % cost model.

QuestionsFromToddMcClay

This answer doesn’t really leave us any the wiser than when we started however this part is interesting….

..the desire to align the child support system with that of Australia

Links mentioned in the article

Supporting Children
Costs of raising children – ( Once on the parliament page you need to click on the link on the right that says full advice text )
Child expenditure table

1.8.2 Justification on how the cost to raise similar children in a blended family can vary so much if the calculations are in fact based on the cost to raise children in New Zealand.

QuestionsFromToddMcClay2

Many of our case studies have highlighted the fact that children appear to be worth significantly different amounts, even when living under the same roof.

The reply points again to this study.

This is not anything new.

1.8.3 The list of the 700 goods and services Statistics New Zealand reviewed to evaluate the cost to raise children in New Zealand.

This one has been referred to the NZ department of statistics, apparently they have this information and we will update you all when we receive it.

For those of us that hoped to get some meaningful answers to these questions, it has left us feeling very deflated.

From here the next step, should we wish to keep heading down this path, is onto the Ombudsman to investigate and review.

What do you think of the answers given? Do we as New Zealand tax payers deserve a better explanation than what has been given?

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Unfair When I Already Contribute 60% of Care and Pay for Most of the Extras – Case 140

Case 140

This is case study number 140

This is Belinda’s Story:

Belinda – Tell us about what is going on with your situation?

Separated 7 yrs ago and have been main caregiver and financial provider for three children over this time as the ex husband stopped paying c/s 2009 claiming he was made redundant.

He remarried and set up a limited company with his new wife 50% shareholder and director .

He is self employed builder. Has claimed since then his income is only 18-20,000 annually!

I had to refresh nursing qualifications and started off on the DPB and now have slowly increased my income.

Since 2013/2014 we have shared care in place with me 60% of care.

I am now in the position of being responsible for 100% of c/s and have to pay him!

How does this work? He is working continuously and lives in a household where the combined income would be much higher than my income alone.

I have paid for 90% of any extras required ie after school activities, hair cuts, school fees, etc etc.

He continually refuses to contribute. It feels to me I am being punished for getting back on my feet, being a responsible parent, being on the PAYE system and not being married.

Totally unfair.

Do the government not realise how much they have paid out to support my family in the earlier years when the father was perfectly capable of paying? What a joke.

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How much did you pay on the old formula?

$110

On the NEW formula what will that amount be per month?

$240

Are you happy with the new formula?

No

What are your main reasons for being not happy with it?

Unfair when I already contribute 60% of care and pay for most of the extras that I now have to give him money because his is able to lie about his income level.

Makes me want to cry!

It gives me no incentive to earn more.

I know he will be laughing his head off about it. He does not need my money and it will be seen as a way of hurting me not as money to be used on the children.

If child support was a set amount per child split between both parents for the basic necessities, what do you think is a fair amount per month per child?

$400

What else would you like to say?

Its incredibly unfair that one parent can just choose to opt out if he has a partner.

The best interests of the child are not taken into account by some parents.

I am dumbfounded that i now have to ‘fight’ with the IRD to prove my ex-husbands fraudulent behaviour and the affect it has on my financial circumstances.

All I want to do is get on with my life not waste it on filling out forms and gathering information.

Commonsense would tell you that I should not have to pay a cent out when I am more than contributing to the welfare of my children.

Belinda – Thanks for sharing with us.

We want to hear your story!

If you would be happy to share your story with our community – we would love to hear it. Please fill out our Case Study submission.

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Disclaimer: Testimonials, case studies, and claims made at childsupportnz.com are unverified results that have been forwarded to us by users or told to us by clients, and may not reflect the typical person’s experience, and may not apply to the average person.

How is One Child Worth More Than Another?

Worth of a Child

Many of our community have struggled to understand the way the child support formula, implemented by the NZ government, values one child differently from another.

What do we mean by that? Let us show you some real life examples.

At a recent Q & A with IRD, held on our Facebook page a number of questions were raised in relation to the differing values of children.

Stella asked:

Q: How is it worked out that a child living in the home that the child support is based is considered to have considerably less financial needs than the child now living in the ex partners home?

Lisa had this question:

Q: Why is one child worth more than another just because a parent earns more? All children should be the same whether a paying parent earns $20k or $200k. My three children receive $900 per month from there father and I still think this is too much. I am arranging a private arrangement or else their Dad will never be able to afford to his boys let alone have them every fortnight. But why should my partner who also has three children be paying $1700 per month. Why the difference? Why do some families only receive $75 when another receives $800 for the same amount of children. Are you trying to make paying families worse off and struggling to pay their bills?

Paulette asks:

Q: I would like to know why dependent children aren’t worked out the same as the non-dependent children and after tax is taken off dependent children receive less than the non- dependent children that you are meant to contribute to not 100% pay for? Bit strange that children that live in your care full time cost less than a child that is supported by two parents incomes receiving child support?

The answer from IRD, in relation to the above questions was:

The cost of raising a child for a parent will be different for each parent based on their circumstances.

Research in New Zealand and elsewhere found, that the cost of raising a child is based on the amount of income the parents earn; and it increases as parent’s income increases. These costs can be translated to a percentage of a parent’s income.

For example, the cost of raising one child under 13 for parents earning the average weekly wage was found to be about 15% of their income.

The child support formula therefore uses a percentage of income in different scenarios. This is set out in the child expenditure tables in the legislation and on IR’s website at www.ird.govt.nz/childsupport/assessment/assess/expenditure/

These percentages change as income changes, and depend on the number of children and whether they are under or over 13 years old.

The income we use in the expenditure tables is updated each year based on average weekly earnings from Statistics NZ. It provides a more accurate way to determine the cost of a child to a parent than under the old child support formula.

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What they are saying appears to make sense on the face of it, but unfortunately what has happened is that children have ended up being valued differently.

Some parents only get the minimum child support amount of $74 a month, or even less.

Disturbingly, a number of parents get absolutely nothing at all.

Other parents receive (or pay) 20 times the minimum, or more, per child.

E.g Jonathan pays $1587 for one child per month:

You guy’s were surprised at the last total in the submission I put in. I received a letter the other day as my daughter is turning 13 this month… $1587/month now for one child. That is the better part of $400/week. In what world does it cost even close to $400/week to raise a child?

Apryl receives $62.80 a month:

Now its gone down by $11.. $62.80 a month- thats $753.60 yr. Isnt the minimum $892.I rang IRD this morning and they said ‘That is calculated on his income and we cant discuss this further’

Surely these are two extremes of absurdity?

Look, we all know that our kids are invaluable and money shouldn’t come into it.. but how can anyone seriously convince us of the fairness of a formula that determines that one child costs nearly $400 a week, yet another costs only $15 a week?

To sum it up a different way Jonathan pays more in one month, than Apryl receives in two years!

What Can Be Done About All This Nonsense?

Here at Child Support NZ we are proponents of a flat rate child support system, that does not discriminate between Apryl’s children or Jonathan’s.

Each child, we believe, could have a reasonable standard of living on a sensible set amount per month that was shared between both the parents.

If one parent can’t pay the calculated amount, due to minimal income (or other reasons), then the Government could help top it up as they do now.

The millions of dollars spent on admin reviews, ridiculous expenditure on systems that don’t work and paying staff to try to explain a system, that they probably find hard to believe in themselves would no longer be necessary.

Simplify, start with shared care and no child support, and move to a flat rate from there.

IRD don’t agree with us, and nor does the government.

And why would they? Agreeing with us would be admitting that mistakes have been made. Very costly mistakes.

Read some of the headlines:

Tell us what you think

Is the current system fair? Tell us why (or why not)?

Do you believe a flat rate is a sensible idea or not? Shoot us a comment with the reasons why or why not.

Let’s not live a future where some children and parents are left penniless, and others forgotten about altogether.

If this current government is not going to work with us to sort it out, we need to make sure we make our votes count next election.

We need to get behind a party that is willing to tackle head on, these massive issues.

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I Really Hope They Re Look at The System – Case 139

Case 139

This is case study number 139

This is Emmy’s Story:

Emmy – Tell us about what is going on with your situation?

We are paying parents living in Aus, paying directly to IRD NZ.

My husband has one child in NZ – South Island. We have a younger child together.

Before we planned our baby, we decided it was best to save for x amount until had enough saved to cover bills for a minimum of 1 year to take the pressure off hubby etc.

It has been life saver!

Husband has never been allowed to see his child, unless the money was paid directly too her, which is impossible due to her being linked with winz.

Husband works 60 plus hours and I stay at home with our young child.

My husband’s x is receiving a pension/single parent so money goes straight to govt, which is fine.

People assume that we make huge money in aus and drive 50k plus cars and have these expensive homes with pools.

We dont!!! the cost of living here is extremely high, despite what you have heard. Yes petrol is cheap but that’s about it.

His child support has increased steadly over the years, which was fine due to reflection of his income BUT when the new system came into place it jumped by $400 a month.

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In the end it was either I go back to work, which I am not happy about as we saved for a very long time for me stay at home with the baby and being forced back into the work force makes me sad. or my husband is too go self employed, making as many tax deductions as possible to bring this income right down.

We are in the processes of my husband going out on his own. So sad that we felt this was the only way without struggling.

Him working 60 plus, plus me working 30 plus hours just didn’t make sense.

I really hope they re look at the system.

How much did you pay on the old formula?

$659

On the NEW formula what will that amount be per month?

$1100

Are you happy with the new formula?

No

What are your main reasons for being not happy with it?

Massive increase without warning. IRD have told us that it will keep increasing even if he only earns an extra $500.

If child support was a set amount per child split between both parents for the basic necessities, what do you think is a fair amount per month per child?

$500

What else would you like to say?

Husband did earn $1500 more last financial year, but the increase in child support is way too much for that amount.

Emmy – Thanks for sharing with us.

We want to hear your story!

If you would be happy to share your story with our community – we would love to hear it. Please fill out our Case Study submission.

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Disclaimer: Testimonials, case studies, and claims made at childsupportnz.com are unverified results that have been forwarded to us by users or told to us by clients, and may not reflect the typical person’s experience, and may not apply to the average person.