· Fairer and more effective penal rules
· Compulsory deduction of financial assistance from employer’s withholding payments for new liable parents
· A fairer definition of “income” used to support children and
· A four year deadline for the re-evaluation of child benefit
The Child Allowance Act has been amended to reduce the complexity of the system, improve fairness and improve compliance.
“The government wants to encourage regulatory compliance and engagement by responsible parents. It is clear that when those penalties increase, some of the fines imposed for unpaid child support actually discourage people from fulfilling their obligations, “said Treasury Secretary David Parker.
“This new legislation eliminates incremental penalties.”
Parliament’s Undersecretary, Dr. Deborah Russell said the changes made the system as fair and simple as possible.
“The government is determined to make changes that will mean better results for more Kiwi children in the long term, and this will give security to parents and the 185,000 qualified children,” she said.
The aim is to prepare the child benefit system for the transition to the new technology platform from Inland Revenue and thus to further simplify the administration of the child benefit system. The Child Alimony Amendment Act
improves the management of the child benefit program in line with Inland Revenue’s philosophy “from the start”.
“These changes give Inland Revenue more time to contact parents to clarify child support requirements and include more effective penal rules. Better understanding and compliance with regulations will keep people from getting into trouble. We want to make sure that parents are more engaging with the program, ”said Dr. Russell.
“But the bottom line is that children in the system will benefit from this new legislation,” she said.
Newly liable parents now receive mandatory deductions from their salary by the employer so that new participants in the system can do everything right from the start.
The bill also introduces a four-year deadline for child benefit revaluation and a fairer definition of income to include interest and dividends for wage earners, using information already available to Inland Revenue.
“The purpose of this definition change is to better reflect the financial ability of liable parents to support their children,” said David Parker.
The lifting of the additional penalties for child benefit will come into effect on April 1, 2021.
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