$12m child support debt in Wairarapa

As of June 30 the debt owed by liable parents in Wairarapa was $12,075,577, including $9,506,702 in penalties. FILE PHOTO

Wairarapa parents owed more than $12million in child support at the end of the financial year.

As of June 30 the total debt owed by parents in the Wairarapa was $12,075,577. That included $9,506,702 in penalties.

Parents who fail to pay in full and on time incur an initial penalty of 10 per cent. A further penalty of two per cent of the unpaid amount is compounded each month the amount remains outstanding. The penalties are retained by the Government. Men owed $11,792,610, compared to $282,967 owed by women.

Wairarapa Advocate Service co-ordinator Trevor Mackiewicz said the service often saw people with child support debt.

"The penalties can add up to a lot of money. We had one case where the person had up to $100,000 in penalties because they'd just been ignoring it and not doing anything," he said.

"Some people on benefits and low incomes find it really hard to survive. When they're working out how to pay for everything and have to pay child support as well they really struggle."

Ignoring debt was not the answer. "We advise people to make a face-to-face appointment with an [Inland Revenue] officer so they can talk it through with the person and be sure the details are loaded in the system.

"They're happy for a support person to be present so they can take us along with them. Once a person's under a budgeting service and willing to make a payment plan, [Inland Revenue] are quite flexible."

Mr Mackiewicz wasn't surprised most was owed by men.

"We see one or two women who owe child support but that's not that common."

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

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

An Inland Revenue spokesman said while most parents paid their child support on time, some structured their affairs to try to avoid child support.

"This can make collecting child support from these parents hard. However, Inland Revenue 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."

Measures Inland Revenue used to recover outstanding child support debt varied, 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."

Legal proceedings were a last resort and even if legal proceedings started, if the parent made contact to restart negotiations, 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 parents contribute to the welfare of their own children ...

"If there is anything we can do to make it easier for parents to receive their child support entitlements or meet their obligations, we encourage them to talk to us directly."