Child support is money paid by parents who do not live with their children, or who share care with someone else. In New Zealand, child support can be managed by Inland Revenue (IRD) through a formula assessment or a voluntary agreement, or by the parents themselves through a private agreement. The amount of child support depends on the income, living costs and care arrangements of both parents, as well as the cost of raising a child. Child support payments stop when the child turns 18, unless they are still at school or meet other criteria. The Child Support Act 1991 applies to families living in New Zealand and Australia, but there may be other options for families living in other countries under the Family Proceedings Act 1980.
There are 3 different ways to set up child support: formula assessment, voluntary agreement and private agreement.
A formula assessment is the most common form of child support agreement. It is when IRD works out who pays child support and how much, based on each parent or non-parent carer's situation. The formula takes into account the income, living costs, care arrangements and other children of both parents. If the carer is not a parent, their income is not included. IRD collects money from the liable parent and passes it on to the receiving carer or Government. A formula assessment is a good option when the parents cannot agree on an amount, want IRD to decide on an amount, or want IRD to make sure payments happen. A formula assessment is the only option if the carer is getting an Unsupported Child's Benefit.
A voluntary agreement is when the parents or non-parent carers agree on an amount and register it with IRD. IRD collects and passes the money from the liable parent to the receiving carer or Government. A voluntary agreement can be a good option when the parents can decide on an amount and want IRD to manage it for them. The minimum amount is $10 a week. A voluntary agreement can be changed or cancelled at any time by either person.
A voluntary agreement can be changed or cancelled at any time by either person. To change a voluntary agreement, both parties need to agree on a new amount and register it with IRD. To cancel a voluntary agreement, the receiving carer can do so online through myIR or by calling IRD. If there is recognised care in place, all carers must agree to cancel.
A private agreement is when the parents or non-parent carers sort out child support payments themselves without involving IRD. They can agree on any amount and frequency of payments, as well as any expenses paid on each other's behalf. A private agreement can be a good option when the parents can communicate well and trust each other to make payments. There is no need for a formal document or registration with IRD. However, if there are any disputes or missed payments, IRD cannot help to resolve them. The amount of child support depends on the income, living costs, care arrangements and other children of both parents. If the carer is not a parent, their income is not included.
If you have any questions about child support or wish to set up or change a voluntary or private child support agreement, please contact us as we have the experts to help you.
