HB parents owe $47m in support

Hawke's Bay parents owed more than $47 million in child-support debt at the end of the financial year.

As of June 30, the total debt owed by parents in Hawke's Bay was $47,645,835. This included $35,657,721 of penalties. Parents who fail to pay in full and on time incur an initial penalty of 10 per cent. A further penalty of 2 per cent of the unpaid amount is compounded each month the amount remains outstanding. These penalties are retained by the Government and are not passed on to a receiving parent.

A significant portion was owed by men - $45,174,222, compared to $2,471,613 owed by women.

Hastings Budget Advisory Service co-ordinator Kristal Leach said the service often saw people with high child-support debt.

"Many of the clients we see have complex financial issues. They may have high interest-rate loans, electricity arrears and rent arrears, as well as child-support debt," she said.

"It's just part of a bigger picture of not really having enough money if you're on a low income to be able to afford everything you need in terms of your weekly payments."

Ms Leach advised anyone who found themselves in child-support debt to get in touch with Inland Revenue (IRD) as soon as possible.

"Ignoring it is never a good idea with any debt. It never goes away, it just keeps growing. Sometimes it's difficult for IRD to actually track people down so the penalties can be really high amounts to encourage them to make contact.

"Once they do make contact, IRD are fantastic at helping people make payment plans, and may forgive some of the debt."

Ms Leach wasn't surprised such a significant portion was owed by men. "Around 70 per cent of our clients are women. They're often single and have children so the onus is on men to pay child support. We don't see many women with child-support debt but things are changing, more and more men are having the child-care responsibility."

Nationally, $3,258,971,105 was owed in child support as of June 30. This included all parents residing in New Zealand and overseas.

Men owed $3,045,344,357, while women owed $213,626,748.

An IRD spokesman said while most parents paid their child support in full and on time, there were some who structured their affairs in an effort to avoid child support.

"This can make collecting child support from these parents hard. However, IRD has processes to investigate complex financial arrangements and tax evasion, and can also initiate an administrative review if a parent's financial affairs don't appear to reflect their ability to provide financial support to their children."

The spokesman said the measures used by IRD to recover outstanding child-support debt varied from case to case, depending on the individual situation.

"The way we manage a liable parent's debt depends on the type and size of the amount owed and how compliant the parent is.

"Inland Revenue works with liable parents who are unable to meet their obligations in full to find a solution, usually by establishing an arrangement for repaying the debt."

The spokesman said legal proceedings were a last resort and even after legal proceedings had been started, if the parent made contact to restart negotiations, the proceedings could be put on hold.

"It is important to remember that for some parents' child support is not a payment to the Government, it is a payment collected by Inland Revenue to ensure that parents contribute to the welfare of their own children."