Inland Revenue is under fire over its lack of action to ensure parents are paying child support, with a sole parent advocate calling it "simply not good enough".
It comes after data released to AM under the Official Information Act (OIA) revealed 30 percent of eligible parents don't meet their monthly child support obligations.
As of June 2022 there were approximately 114,000 liable parents who have a current monthly obligation to pay child support.
There are an additional 26,000 people who have historical debt. These are people who don’t have a current monthly obligation but who missed monthly payments in the past. They still need to pay the arrears.
In any one month, 70 percent of the 114,000 liable parents pay their monthly child support obligation on time and in full. The remaining 30 percent pay some or none.
For the 2022 financial year, 80 percent of all debt owed by liable parents was paid in full within a 12-month timeframe of IRD working with them.
As of November 2022, there are 90,000 liable parents who have overdue child support, including parents who are currently liable and also those who are no longer liable but have unpaid child support.
Of the 90,000 liable parents with overdue child support, 65 percent (58,000) are repaying in instalments under a payment arrangement.
Speaking with AM on Thursday, sole parent advocate Leanne Inder said unpaid child support has a real impact and simply allowing people not to pay isn't good enough.
"[The impact] is significant and you don't realise how bad the child support system is until you're actually part of it, either as a parent or a child," she told AM co-host Melissa Chan-Green.
"We've been advocating for a number of years around trying to create some change around that child support system, because… it's just simply not working.
Inder said there's no doubt in her mind unpaid child support contributes to New Zealand's high level of child poverty.
"The Act itself is really explicit about the obligations of both parents to meet the financial obligations of their children and to do so without necessarily requiring the intervention of the courts.
"But we so often hear from the families that we work for that they are told by Inland Revenue, 'Look, you can't guarantee receiving child support, it's not guaranteed so you're just going to have to get on with it'. It's simply not good enough."
Inder said IRD needs to take more action to ensure parents are paying their child support.
"I believe it really is the responsibility of Inland Revenue to actually utilise all of the powers they have available in order to really send a message that supporting children and New Zealand is actually not a discretionary thing.
"When you're a parent, you're responsible for those children and you should be meeting your financial responsibilities," she said.
Leading trust litigation and relationship property lawyer Lady Deborah Chambers KC, who joined Inder on AM, said child support should be collected in the same way tax is.
"It is not working and that's particularly disappointing because one of the ideas behind the Child Support Act was child support would be collected like a tax.
"This was one of the ideas that it would be simpler for custodial parents to get their money because IRD was collecting it."
Lady Chambers said the current system isn't working and it's leaving sole parents and children facing poverty and hardship.
"If 30 percent of taxpayers were not paying their tax, we'd see action on it and it's very disappointing to see this level of non-compliance," she added.
An IRD spokesperson told AM the agency is aware sorting through child support is a "stressful time" and urged anyone who is struggling to pay to contact them.
"We work with newly liable parents to educate them on their obligations, including how payments are made.
"From November 2021, new liable parents (plus parents re-entering the system) who are working and receiving income through salary and wages will have their child support deducted directly from their income source. This arrangement will be set up as soon as a child support application is received and processed.
"If we are unable to set deductions, and the liable parent goes into arrears, we attempt to contact them as soon as possible to establish why a payment has not been made and to encourage them to pay voluntarily via lump sum or negotiated instalments."
The spokesperson said when they are unable to "secure funds through all voluntary channels" they look to enforce payments through a deduction notice.
"This includes income from salary or wages or from a bank account in the name of the liable parent. As a last resort, Inland Revenue may also pursue other legal avenues to secure payment, as set out in Part 11 of the CSA. These include, but are not limited to, applying for arrest warrants from the courts, issuing summons for examination of financial means, applying to the courts for charging orders against property, and applying for warrants to seize property through the courts.
"We do go to those lengths when all else has failed and after taking into account all information we hold, determining if taking this action will achieve the right outcome for all parties, and is efficient use of the Commissioners resources."
Watch the full interview above.
