Child support is money paid by a parent who either doesn't live with their child or who shares care with another parent. It is intended to provide financial support to the caregiver for some of the costs associated with raising a child.
The Child Support Act 1991 came into force on 1 July 1992 to ensure parents take financial responsibility for their children. Based on this Act, it was decided Inland Revenue, given its access to income information, and collection and enforcement capabilities, could administer child support payments and that these payments would be based on the paying parent’s taxable income.
The purpose of child support is to make sure that:
- parents take financial responsibility for their children
- their payments offset the costs of state benefits that support their children.
Child support is money paid by a paying parent and passed to the receiving carer. Payments are collected by Inland Revenue when parents want a voluntary agreement, apply for a formula assessment or are required to pay child support under a court order.
This means that Inland Revenue is typically involved when:
- parents do not agree on an amount
- one or both parents are on a benefit
- it is required by court order.
Inland Revenue formula assessment
On a formula assessment Inland Revenue will use the parent's income to decide how much child support should be paid.
Parents or carers on Sole Parent Support or an Unsupported Child's Benefit must apply for this assessment. If they do not they will face penalties from the Ministry of Social Development and see a reduction to their benefit.
Formula assessment uses both parents income. In the formula, we deduct a living allowance, any dependant child allowance for children in a parent's care and any money that a parent is paying or receiving for child support for children in other relationships. We also look at the care each parent provides for the children and the costs of raising them.
Objections, reviews and exemptions
Paying parents or carers can object to child support decisions and request an administrative review under certain grounds. Paying parents can also apply for an exemption in certain situations.
The Commissioner may decide to a review an assessment if we believe paying parents have the ability to pay more.
We must enforce national and international court orders.