Child support arrangements explained
Going through a separation is emotionally challenging – and made even harder when children are involved.
As well as working out and managing the transition of a child’s care arrangements, and how much time they will spend with each parent, the costs of their care and upbringing also need to be organised.
Child support covers the costs of raising a child with the amount dependent on how much each parent earns and how much time the child spends living with each parent.
The parent who receives child support is called the receiving parent and the parent who pays child support is called the liable parent.
The IRD online calculator enables parents to work out child support liability or entitlement. However, it is key to understand the different types of arrangements available.
Child support arrangements
There are three different ways to set up child support:
- Formula assessment
Most people use formula assessment where IRD calculates the amount of child support parents need to pay (based on their formula assessment). The IRD also manages the payments. If the liable parent earns salary or wages, the child support payments will be deducted from their salary or wages by their employer.
IRD will let their employer know how much child support they need to deduct and when. If the child support is not paid by the liable parent, IRD can ask the court to enforce payments against them.
- Voluntary agreement
Both parents decide the amount and frequency of the child support payments and normally sign an agreement. The agreement is registered with IRD and IRD manages the child support payments. IRD can follow up on the liable parent if there are missed payments.
- Private agreement
Both parents decide the amount and frequency of the child support payments. Both parents manage the payments between themselves (usually through bank transfers or automatic payments).
Sometimes child support does not cover “big ticket items” such as private school fees, school uniforms/laptop, dentistry/medical needs (such as braces, glasses) or extra-curricular activities and sports. Therefore, it is best that there is an agreement about how these costs are to be shared by the parties.
If the receiving parent is not happy with the level of child support they receive, they can discuss this with the liable parent. Failing agreement, they can apply for a child support review or administrative review (child support review).
Circumstances need to fall under one or more of the 11 grounds for child support review. The grounds can be found here.
In practice, a commonly used ground is Ground 8, which provides that the child support payment does not take into account the income, earning capacity, property and financial resources of either parent or child (or children). This normally happens when a liable parent either stops working or reduces their hours of work and/or decides to change their career, and the amount of child support payable to the receiving parent also drops.
The child support review can be filed through the IRD website. It is free and is managed by the IRD. Supporting information needs to be provided with the application, such as income and the other parent’s income, their assets and financial position, and their employment background and earning capacity.
If a parent does not agree with the child support decision or assessment following their child support review, they can appeal to the Family Court.
Normally child support is payable until a child turns 18, or if they stay in school after they turn 18 – on the 31st December of the year they turned 18. If one parent lives in New Zealand, and the other parent is overseas, it is possible to apply for child support through the IRD.
If you need any assistance regarding agreements for child support, child support reviews, or appeal to the Family Court for child support please contact Pauleen Clark on @email or 09 306 0604