Country concerns at child support scheme

Ruapehu Bulletin, Volume 11, Issue 502, 7 September 1993, Page 4

Country concerns at child support scheme

By

Jenelle

Frewen

In July 1992 the New Zealand Parliament introduced the Child Support Act to replace the Supporting Parent Scheme. The Act was designed to ensure that a child would receive financial support from both parents even when those parents were no longer together. But since its introduction affected parents and concerned citizens of Waiouru have been rallying against the perceived anomalies and inequity that the new Act has introduced. Of special concern is the total inflexibility of the Act and assessment of the liable parent based upon his or her gross income. In an at-

tempt to have their grievances heard, a group of parents held a meeting in Waiouru recently which Denis Marshall, MP for Rangitikei, and Andrew Schmidt, Labour representative for Rangitikei attended. The meeting was convened by Geoff and Marj Hughes following a series of informal meetings which had been set up as a forum for the many affected parents in Waiouru. Paul Ireland from the Child Support Action Group and Bruce Tichbon from Families Apart Require Equity (FARE), also attended and were vocal in their criticism of the new system. Mr. Marshall, in defence of the Act, said the

administering of the Act involved a "complicated formula which determined what the child was entitled to", and in drawing up the legislation "the consideration of the child was paramount". In response Mr. Hughes said there was a lack of accountability on the custodial parent' s part in passing on the money received in child support to the child, making the analogy that when you take a car to the garage you expect an accoimt of how your money was spent. Other anomalies raised at the meeting included the lack of adequate redress available for liable parents. While the custodial parent has three av-

enues of appeal before having to face the Family Court the liable parent has only the Family Court itself and the ensuing legal costs associated with going to court. Several people at the meeting told of the advice they had been given by lawyers suggesting they not go to court because of the prohibitive cost involved and the likelihood of a liable parent losing. Anomolies Additional anomalies were pointed out in the area of liable parent income. While the liable parent may pay up to 27 per cent of their pre-tax income per child in child support there is no rebate or tax concession avail-

able to claim that child as a dependant and, while every extra dollar earned attracts a percentage increase to be paid in child support, the liable parent's income must fall by more than 15 per cent before a reassessment of the appropnate amount to be paid will take place. The penalty for late payment is the same as that issued on late taxes and GST, at 10 per cent. Such a financial situation led one parent at the meeting, Mr. Kevin Ashcroft, to assert that "a new class of poor is now being created by the Act" The Child Support Act was designed also to be a revenue raising exercise, according to some. Mr. Schmidt quoted the

Revenue Minister, Wyatt Creech as describing the venture as "revenue capture." Despite this intention however, the new scheme has managed to net around $40 million less than the old system, without taking into account the set up costs. Stonewalling The meeting was not free of political parrying, with Mr. Schmidt accusing Wyatt Creech of "stonewalling the release of a review conducted by the Internal Revenue Department into the Child Support Act because it is "too politically sensitive" to make public in the lead up to an election. Mr. Marshall said the situation the liable parents found themselves in represented a "political /act of life". "When you drawvthe line there will always be some people who will win and some who'll lose," he said. Mr. Marshall alsoi asserted that " everyone 1 must pay for the privilege of being a parent."

There were a number of suggestions put forward at the meeting, particularly concerning the Waiouru community. Mr. Ireland suggested that 0800 telephone numbers to the IRD and the Child Support Agency in Palmerston North should be made available so that people in isolated areas could have free access to advice and information. Regular visits from departmental professionals were also called for. Mr. Schmidt told the meeting that it would be the Labour Party's policy to allow departmental hearings of liable parents' cases, rather that having to go directly to the Family Court. Too rigid "There is a need for discretion and mediation because (the Act's) formula is too rigid," he said. Mr. Marshall called for the details of some specific cases so that his of'fice could investigate them.