Child Support
The Families Commission has released a discussion document calling for changes to Child Support that they believe will encourage the paying parent to be involved with the children and not be financially crippling.
Mark Stephenson has reviewed the issue.
OK: You’ve split with your partner. She has taken your two children and left you on your own. It’s the low point of your life. You might think that misfortune couldn’t deal you any more bad cards.
But you haven’t reckoned with The System.
The System basically demands that you contribute to your children’s upkeep, regardless of your choice (or lack of) to be living with them. For some fathers, this adds insult to injury. A difficult situation can become totally demoralising.
In March 2009, there were 136,222 parents liable to pay child support (81.4 percent of them male) in respect of 208,040 children. It is a common enough scenario: 50% of marriages and ‘de-facto’ relationships end in separation.
The Child Support system is designed to protect the lifestyle of the children, even if one parent leaves them. Not a bad principle, as long as it is fair. Children have a right to the support of both their parents.
But is it fair? Probably not always.
It’s a far from perfect system. Some of the important things to know are:
Firstly, the custody laws have changed. As a father you have a right to live with and care for your children as much as the mother, unless a court can prove you should not be allowed to. There is plenty of case law now that bears this out.
Secondly, if you have care of the children at least 3 days and nights (looking after them in the day time only does not count), you have ‘shared care’ for the purposes of the Child Support Act (see below for details of payments etc.).
Thirdly, shared care means not only that you pay less child support BUT ALSO you can (and should) claim child support from the mother. This is ‘offset’ against your contribution. In effect, if you earn more: you pay her the difference (in child support contributions). If she earns more: she pays you the difference.
Fourthly, to state the obvious, if you care for the children more than 4 days and nights, you are the ‘custodial parent’ and can claim child support.
N.B. – ‘custodial parent’ is not the same as legal custody, but Child Support needs no court decision.
Fifthly, if the mother goes on the DPB, you will still pay child support but your children will receive no direct benefit from this unless the amount paid exceeds the DPB already paid to the mother. This can lead to some awkward cases, especially in higher earning couples.
“When we split up, we didn’t really appreciate how the Government would step in with support. My ex-partner went on a DPB. I had made the decision to take on the family debt so she could have money to look after the kids properly.
What I didn’t realise was that I would have the child support as well, so it pretty much screwed me… It was very hard to pay off all the debt and pay child support as well.
Every cent was gone, nothing extra… I had to make a choice whether I moved into a flatting arrangement – which would limit my access to the kids. I was a bit stuck. I love having the kids – the thought that I had to move, it didn’t make sense.” – parent quote from Families Commission review.
You have probably spotted the trap! If you were the breadwinner before the separation, you may have to make some difficult decisions. This is where it becomes unfair.
If you continue working and the mother has the children most of the time, no matter how much care and support you give them, you can be required to pay child support.
If you stop working, you will provide your children with a lesser standard of living but will have the time to look after them. However, there are a few women who will go out to work full time and pay the father child support to care for the children.
So what can you do about it? The crux of the matter should be living with and caring for your children. It is a right and a responsibility and probably what you most want. It is easy to imagine the tragedies that might occur: a mother ‘runs off’ with the children, or a father gets a fabricated protection order served, possibly a mother won’t work so the father feels he has to.
The System is not able to discriminate in all these cases and simply churns out demands for more money, regardless of the whether the children are getting regular access to their father, his work/life balance or psychological well-being.
Difficult though it may be after a separation, the only fair way is for both parents to discuss how they are going to share the day-to-day of their children.
The decisions should be whatever is best for the children: i.e., they have quality time with their father and mother, and that both parents contribute to their upkeep. When the children’s’ welfare is the primary issue, money can become a secondary one.
It is possibly a better idea to sort out a private arrangement, with fair days or time with each parent, then the IRD will help set up or administer such private arrangements.
This may be easy to say in principle, but not always possible in reality.
The best option for a keen, involved father may also be to work part-time and arrange to be there for the children at least half the time. More people are working part time these days, both men and women.
Employers in certain industries are accepting of flexible hours or part-time work, but this is impossible in some jobs, or for self-employed workers.
The Families Commission has begun a review of the Child Support system, The review is expected to be supportive of fathers’ roles in parenting and recognises problems with the system as it is.
There is evidence from UK and the USA that parents who are actively caring for their children are more likely to pay their child support (my italics).
They also recognise the cost in providing accommodation for children even if it is only 2 nights/ week. The 3 nights/ week, or ’40% of nights’ rule applied by Child Support is deemed to be too rigid.
“There is some concern that the definition of shared care used in the Child Support Scheme sets too high a threshold and is too rigid. Parents who have care of their children for less time still incur costs in providing for them during contact.”
“A formula based on the combined income of both parents and more equitable shared care thresholds might encourage better compliance with the Child Support Scheme and also provide a better guide for parents who are making private arrangements for the financial support of their children.”
They note that other areas of law have different definitions of shared care, e.g., Working for Families.
Here’s how the System works:
They look at your last year’s annual income from your tax return (up to a maximum of $85,000). Ie, this is based on pre-tax income and is not tax deductible. They do subtract a living allowance according to the number of people who live with you.
They take a percentage according to how many children you have:
One child 18%
Two children 24%
Three children 27%
Four or more children 30%
Or for shared care:
One child 12%
Two children 18%
Three children 21%
Four children 24%
Five children 25.5%
Six children 27%
Seven children 28.5%
Eight or more children 30%
So, if you are single, earn $50,000 and have 2 children not living with you most of the time, you pay:
$50,000 -$13,964 = $36,036, @ 24% which = $8648/ year.
i.e. : $720.72/ month.
Some people have child support deducted, like student loans by their employer at source. By law, the IRD can take only up to 40% of gross earnings (i.e. including tax). If this limits your ability to pay your child support, you may incur penalties.
The system too often ends up seeming unfair on fathers after separation. They are expected to provide for their children, but are being financially crippled.
The only route to fair treatment is by continuing to live with your children and caring for them half the time at least. Few women are expected to make such huge life changes in living and working patterns to continue being valued as a parent.
Rightly or wrongly, your children will always remember and value your presence in their lives, they are less likely to remember child support payments or school uniforms.
Footnote: One mother—reportedly—kept a DPB Diary and every time she bought a new toy, school book or raincoat from that money, she listed it. This may not have been actual Dad contact, but at least those children knew that their father contributed something.
