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Is it worth applying for Child Support?

August 8, 2016

An enquiry came into Family Law Results’ website that was similar in theme to other enquiries we regularly receive about child support:

“I need financial assistance for my children from their father, my ex husband. I don’t know if it is worth applying now for child support because he refuses to pay. He’s self employed and I am scared he will just hide his considerable income”.

What do you do in the situation where you aren’t receiving financial support for your children from their other parent? Perhaps the other parent is on a low income or, like this enquirer, you fear he or she will “hide” the true extent of his or her income. Like the enquirer above, you may be feeling the situation is so futile that it is not worth applying to IRD for an assessment and collection of child support.

I struggle to see any merit in “not bothering” to apply for child support in circumstances where coming to a private agreement with the other parent is not possible. By deciding it is not worth applying because your ex won’t pay, you are creating a self fulfilling prophecy – you are guaranteed of one thing: to receive no child support! When you apply for child support, IRD will assess how much is to be paid and will set about collecting it.

One thing you shouldn’t do is delay applying for child support. IRD does not back-date a parent’s child support liability. This means IRD will only assess and collect child support from the date it receives the application so delaying an application merely results in increasing the period of time for which you do not receive any support. Sometimes the lodging of an application sharply focuses the other parent’s attention on the issue and further discussions ensue resulting in an agreement. By making your application, you are at least getting some child support in the meantime. If things change and you come to an agreement about child support, you can always withdraw your application with IRD or lodge a voluntary agreement for IRD and ask IRD to collect the child support that is to be paid under that agreement.

IRD has a lot more tools for collecting child support at its disposal than you will have.  For example, if a parent doesn’t pay, IRD can have the payments taken from that parent’s wages or bank account. IRD can also charge penalties for non payment and take legal action to recover owed child support.

Often people are concerned that the other parent will respond to a child support application by “hiding” their income through a trust or by being self employed. The result being that the parent is assessed to pay a lower amount of child support. This is a difficult scenario to resolve. When first assessing the amount of child support to be paid, IRD will use income information it holds from the previous calendar year (for salary and wage earners) or two tax years ago (for self employed or overseas parents). This makes it hard to initially “hide” income unless the other parent has been doing so for some time prior to the application. Later, if the other parent’s taxable income drops significantly, you can apply to IRD to review the resulting lower child support assessment on the basis that the other parent’s full income or earning capacity are not being fully taken into account in the assessment.

There are no easy solutions if a parent is determined to minimise their child support liability. However, for most people, getting something by making an IRD application is better than the alternative of receiving nothing.

For assistance with financial support and other family law issues, give Family Law Results a call on (09) 297 2010 or drop us an email at lawyers@familylawresults.co.nz. 

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