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 from responsible parents,” said Treasury Secretary David Parker.
“It is clear that when those penalties increase, some of the penalties for unpaid child support actually deter people from fulfilling their obligations,” he says.
“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 over the long term, and this will keep parents and 185,000 qualified children safe,” she says.
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 Change in Child Support Act improves the management of the child support plan, 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 get more involved with the program, ”says Dr. Russell.
“But the bottom line is that children in the system will benefit from this new legislation,” she says.
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,” says David Parker.
The lifting of the additional penalties for child maintenance will come into effect on April 1, 2021.
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