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“…But we had an agreement!”

July 10, 2013

I received a call last week from a reader of this blog. We’ll call her Mary. Mary was receiving child support payments for her son from his father who we will call James. They had agreed on the amount of child support to be paid by James and had had their lawyers put this into an agreement when they separated. Mary rang me because she’d received a notice in her morning mail from IRD of a formula assessment for the amount of child support

Child support contract

James was to pay. This amount was less than what he was to pay under their agreement. “But we had an agreement!” Mary cried.

Often parents will come to their own agreement about the child support that is payable in respect to their child. Many, like Mary, will be surprised to learn that entering an agreement with your child’s other parent about the amount of child support to be paid, does not give certainty around those arrangements. Child support agreements can be “undone” by a child support formula assessment by IRD.

Mary’s call was not the first call I have received like this. I have fielded enquiries from several people who have been shocked to have received a notice of a formula assessment for child support by IRD when they had an agreement with their child’s other parent about the amount of child support that was to be paid.

Parents can enter an agreement between themselves about child support provided the parent with the day to day or shared care of the child is not receiving a benefit. If the parents choose, they can register this Agreement with IRD and IRD can take responsibility for collecting from the paying parent the child support that is to be paid under the Agreement and pay this on to the receiving parent. However, none of this prevents future claims for a child support assessment by IRD arising.

Child support liability through IRD can arise even if an agreement is in place if:

  •  The parent with the day to day or shared care of the child starts to receive a Benefit. If that happens, Child Support will automatically begin to be assessed and collected by IRD in accordance with its formula calculation, irrespective of what agreement you had before that.
  •  If either parent applies to IRD for a formula assessment of the child support liability. If this happens, IRD is obliged to undertake a formula assessment of the child support that is payable and collect these payments. Even if your agreement was registered with IRD, this will be brought to an end on the application by one of you for a formula assessment.

You might have grounds for a review of the assessment if this situation arises.

Want assistance to resolve a child support or family law problem? Let the team of specialist family lawyers at Family Law Results help you. You can find out more at www.familylawresults.co.nz

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