After a false start and delay in implementation, the modifications to Child Support are now just around the corner, heralding significant changes to the way these payments are calculated.
If you’re paying or receiving Child Support, now’s the time to ensure you understand the new regime which comes into force on April 1 2015.
Key changes include:
• Both parents’ income will now be assessed as part of calculating Child Support payments.
• Assessment calculations that factor in the age of dependent children – more will be paid for teenagers.
• A new child expenditure table, which specifies the Child Support figures, based on income and the children’s ages.
• Parents must be providing at least 28 per cent care for that to be factored into their Child Support liability, and no Child Support can be claimed by a parent with less than 35 per cent of the care.
• Setting a “living allowance” that acknowledges parents also need enough to live themselves; however, there is no allowance for a parent’s partner.
• A new “multi-group” allowance that caters for situations where a parent has multiple Child Support obligations to different parents.
These are the first wave of changes, with further pegged for next April, including:
• Other payments made for the direct benefit of the child can be taken into account when assessing Child Support.
• Unless other arrangements are made with IRD, it will be compulsory for liable parents to have Child Support deducted directly from their employment income.
• The way penalties are administered will change.
Depending on your own situation, there could be numerous factors and variables in calculating the cost of the Child Support overhaul to your household. Remember, too, not all cases fit within the prescribed formula, and you may have grounds for an administrative review. This can be an involved process, so it’s wise to consider taking some initial legal advice.
We’ll be bringing you more as the changes come into effect. In the meantime, check out Child Support changes on the IRD's website which provides background on the new-look system, as well as calculators to give you a guide.