Wanganui parents owe IRD $14 million in child support

Wanganui parents owed more than $14 million in child support debt at the end of the financial year.

As of June 30, the total debt owed by parents in Wanganui was $14,522,519. This included $11,270,230 in 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 - $13,970,039 compared with $552,480 owed by women.

Gary Reid, of Whanganui People's Centre Advocacy Service, said more than $14 million sounded like "an awful lot".

"A lot of people we see are on benefits so it is taken out of their benefit," he said. "Normally, it will be the smallest amount.

"But if people come off a benefit and don't get in touch with [Inland Revenue] they can get penalties. The penalties can be quite stiff."

Anyone who found themselves in debt should contact Inland Revenue directly or get help from a budgeting service, he said.

"Get in touch. It always pays to do a budget, especially if you're on a low income."

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 Inland Revenue 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, 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."

The spokesman said the measures used by Inland Revenue 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.

"Collecting child support is an important part of Inland Revenue's work, and we take it very seriously."