Child Support Amendment Bill (No 4)

Hon DAVID CUNLIFFE (Minister of Immigration) Link to this

I move, That the Child Support Amendment Bill (No 4) be now read a second time. The main purpose of the bill is to get parents who are not paying their child support back into the system. In order to achieve that objective, the bill contains a balanced package of incentives and controls, to ensure that liable parents meet their financial obligations toward their children.

The incentives include the write-off of certain debt penalties for parents whose payments have lapsed, while the controls impose a number of conditions that parents must comply with. One of those conditions is that parents must still pay the arrears they owe, including some of the penalties. Once parents enter into an agreement with the Inland Revenue Department to make payments on their current liability and arrears, the incremental penalties they have previously accrued will be written off at 6-monthly review points. However, if they default on their obligations, they will get no relief at the next review point. Parents will then have to negotiate a new agreement with the Inland Revenue Department, and comply with that before they can again qualify for a write-off of the incremental penalties they owe. That is the principal measure contained in this bill.

The bill is aimed at reinforcing the message that whatever happens in parents’ own relationships, they are responsible for their children. Children are not a commodity to be tossed aside when a relationship breaks up. At the same time, the incentives in the bill do recognise the considerable financial and other pressures that liable parents can be under, and therefore the bill seeks to strike a reasonable balance. In addition, the bill introduces several complementary measures that, again, are aimed at ensuring all liable parents take financial responsibility for their children. That includes parents who deliberately structure their financial affairs to minimise the amount of child support they should pay. To counter that practice, the bill strengthens the Inland Revenue Department’s ability to investigate liable parents’ financial affairs when it suspects they are paying less child support than they should be.

Although those measures clearly target parents who deliberately renege on their financial obligations towards their children, the bill also recognises some special circumstances that justify an exemption from the payment rules. In this category the bill proposes a temporary exemption from child support payments for young parents for whom it is compulsory to be at school. If, however, they take on part-time or casual employment, they will be required to make some contribution to the support of their child. The second exemption contained in the bill relates to the victims of sexual offences. The bill proposes a permanent exemption from child support payment requirements for that group. Those people should not be further victimised by being required to pay child support for a child born as a result of a sexual crime.

The remaining measures in the bill are of a pragmatic or administrative nature. They include new provisions relating to the acceptance of overseas birth documentation, the introduction of a new administrative review procedure, and the introduction of new appeal rights for both parties following an administrative review.

In reporting back to the House, the Social Services Committee has recommended only minor administrative changes to the provisions in the bill. The first change defers the start date for allocating payments to custodial parents for 2 months following the date of assent. That is necessary in order to allow for changes to be made to the processing systems. The second change recommended by the committee refines the formula for the write-off of incremental penalties. The third change allows the offsetting of child support payments to be automated when both parents are liable for child support and one parent is in receipt of a social security benefit. The fourth and final change recommended by the committee is a new provision to ensure that living allowances are correctly inflation-adjusted in future years.

In bringing the Child Support Amendment Bill (No 4) to its second reading, I wish to express my gratitude and the gratitude of the Minister of Revenue for the committee’s detailed consideration of the bill, which I now commend to the House.

JUDITH COLLINS (National—Clevedon) Link to this

When I first spoke on this bill, in its first reading, I was hopeful there would be significant changes to it and that we could then get cross-party support for it. That is because this is a very, very serious and important issue, and I would like to thank the Minister for acknowledging the work of the Social Services Committee. One of the problems in our society at the moment is that we even need legislation for child support. We have to have it only because, unfortunately, there are some parents who simply will not acknowledge, or do anything other than even acknowledge, their rights and obligations in relation to their children.

One of the reasons the National Party will not be supporting this bill is that it writes off about half a billion dollars in penalties. The message we are sending to people is that, in relation to child support, half a billion dollars in penalties—and about half of that amount I understand is owed by expatriate parents; in other words, those who have flown the coop, those who have run away from their responsibilities—will be written off when it comes to child support penalties. But do not expect any writing off of anybody else’s tax penalties, because it is all going in these ones.

It is time we acknowledge that for some people children do not come first. Their children are simply accessories for a time, and when the relationship fails they then move on to another relationship. That happens; we all know it does. But, no matter what, children should come first. Even if relationships fail, children must be put first.

I see this, unfortunately, as legislation that writes off half a billion dollars of debt but also does not go quite far enough, in our minds, to enable us to support some of the good changes in the bill. I think it is very important that the Commissioner of Inland Revenue has the ability to go outside the formula for assessing liable-parent contributions to look at the liable-parent’s ability to pay, the assets involved and the control that the liable parent has of those assets, and what the situation is for the parent who has the day-to-day care of the child. I think that is a good provision.

What concerned me greatly in the select committee was a very detailed submission I received from a woman in Christchurch. She outlined assets in great detail, including certificates of title, references, property valuations, details of addresses, numerous properties—in fact, pages of assets that her former partner owned and controlled, including cars worth hundreds of thousands of dollars. There was an extremely lavish amount of assets. She then went on to point out that he was paying the bare minimum in child support. When we put the question to the Inland Revenue Department advisers—and from memory all of us thought this was a very worthwhile case—whether this was an instance where the commissioner would exercise his right to review the liable-parent contributions, we did not get a positive answer. We got a “well, it depends, maybe, possibly, whatever” sort of answer.

Frankly, that is not good enough. When a parent is bringing up her child and getting only the barest support from the father of the child, who is a man of extreme means in terms of property and income, and the Inland Revenue Department can give us only a “maybe, possibly, oh, maybe” answer, that is not good enough. There must be an attitude within the Inland Revenue Department that puts these children first.

There are those groups—and I am sure every member of the House will have been contacted by them—whose view is that liable parents should pay their contribution towards the cost of bringing up their children. Those groups say that liable parents should not have to pay their contribution to the Inland Revenue Department but that they should pay it to the children, or buy things for the child. However, that ignores the fact that for many sole parents who are left with a child to bring up, their only means of support is from the State.

The State is not just something that exists in Wellington; it is every single one of us taxpayers. Every single one of us is paying for those children. I am one of those people who do not begrudge that, but I do expect that when there is a liable parent who can pay—who should pay—that they do pay. Those of us with children do pay for our children, and we look after them. We do not view that as a dreadful burden and nor should liable parents; we view it as part of our obligations as parents.

Frankly, I am one of those people who are sick and tired of listening to people grizzle on about their rights in relation to their children when they are not prepared to accept their obligations as parents. I am also sick and tired of people who say they will not pay their liable parent contribution unless they get access to their children. I can understand their feeling of loss, but I do know that access is actually the right of the child. It is very difficult for a lone, sole parent to feel a huge amount of sympathy towards the other parent when they see him or her off with asset after asset, living a high life, re-partnered, and going along their merry way, then having to drop everything to that parent’s will when he or she wants to see his or her child. I accept that many genuine people would feel very hurt by those comments, and I am not including them in that situation; but I, like many other members of the House, have seen people who do abuse the rights and obligations of being a parent, and who are parents only when they need to be.

I also know of some fathers on very good incomes who arrange with the mothers of their children that they, the fathers, will not be named on the birth certificate, for the sole reason that they will not be contributing towards the costs of bringing up their children. I saw that as a lawyer before I came into this House. It is an absolute disgrace for people in that situation to believe it is their right to do so.

One of my concerns is that writing off this half a billion dollars of penalties will reinforce the view that if we wait long enough for people to pay off their debt—if we wait for enough people not to be meeting their obligations to their children—then eventually it will all get written off. We will put some things in the bill that will be helpful, but at the end of the day they may or may not do a scrap of good. It concerns me greatly that unless the Inland Revenue Department makes it a priority to actually get the money in, to actually get people contributing towards the cost and upbringing of their children—and not only that but putting the effort into being with their children when they can—then I do not think we will have any change in behaviour. In fact, I think all we will get is a further eroding of parental obligations and responsibilities, as well as the rights.

GEORGINA BEYER (Labour) Link to this

I am pleased to rise and take a call on the second reading of the Child Support Amendment Bill (No 4). As chair of the Social Services Committee, which considered the bill, I would like to thank Judith Collins, who has just resumed her seat, in her role as deputy chair and also the other committee members. I also thank our committee staff and the advisers who helped us with this bill. The bill was expedited fairly quickly through the committee in terms of parliamentary process. The committee received the bill in December last year and closed submissions in February of this year. We heard 35 submissions, and we spent several hours deliberating and considering the bill before reporting it back to the House today for its second reading.

The main purpose of the bill is to increase the compliance of parents who fail to meet their child support responsibilities. That goal should be balanced against the need not to wring out of parents support liabilities they cannot afford to pay. The bill’s purpose is being achieved through a number of measures. The bill provides limited relief to parents who have fallen behind in their payments and have attracted penalty payments as a result. That is significant given that, as at September 2005, of the $1,012 million owed in outstanding child support, $584 million were penalty payments for arrears. The goal is to encourage lapsed parents to re-enter the system without punitive action being taken against them. When lapsed parents enter an agreement with the Inland Revenue Department to make payment on their child support and penalties, previously accrued penalties will be gradually written down at 6-monthly review points, provided the parents keep to the agreement. Because not all penalties will be written off, parents are still better off if they simply pay their child support on time and do not incur penalties in the first place.

The Inland Revenue Department will also have a new power to administratively review child support levels if it believes that parents are structuring their finances in a way that deliberately lowers their income in order to avoid child support payments.

I do hear the opposing view from Opposition members, who disagree with the principle of writing off such a large amount of money. Of course, they are entitled to share their opinion in this way, and members of the House and the public will note the National Party’s minority view in the report that has come back from the select committee.

By and large, I think this legislation represents progress and will be helpful. I commend the bill to the House and hope it is expedited through its remaining stages.

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

Thank you, Mr Assistant Speaker, for the opportunity to speak on this Child Support Amendment Bill (No 4). I note that the chairperson of the Social Services Committee, Georgina Beyer, has admitted in her comments that for once this bill was expedited quickly. However, that is one of the great problems with regard to it. When we look at the main purpose of the bill, we see it is to increase the compliance of parents who are not currently meeting their child support obligations. The committee was also concerned about liable parents who hide significant amounts of income and assets in order to avoid paying child support. That is quite right. But what is quite outstanding about the legislation, which affects many children, is that it in no way mentions or directs its concern or care to the children themselves.

It is quite extraordinary that prior to the 2005 election a group called the Agenda for Children, which represented something like 400 different children’s organisations, made a submission to the various parties, stating that one of the things we should do in legislation is to have child-impact reporting. But there is absolutely no sign in the bill, or in the deliberations on it, that it actually mentions children. In fact, in submission No. 26, which came from Child Advocacy Services, the point made by Mr Murray, a coordinator for that group, was that there was no mention in the bill of the care or welfare of the child being an important or a paramount concern. When we heard Georgina Beyer say the bill was expedited quickly, we must agree that yes, it was, but I think we are going to have continued problems with the legislation because of that.

One of the reasons that National is not supporting the bill is the point that my colleague Judith Collins made: the Government is writing off half a billion dollars, which it will expect other hard-working New Zealanders to pay for.

BARBARA STEWART (NZ First) Link to this

On behalf of New Zealand First, I rise to support the second reading of the Child Support Amendment Bill (No 4). One of the bill’s purposes, as outlined in its introduction, is to improve compliance with financial support obligations so that more children receive the financial support to which they are entitled. Of course, this in turn reduces the State provision of financial support. This bill proposes writing off the debt penalties—not arrears—as a part incentive for parents to reactivate their payments. As outlined by the Minister, it is only limited relief. As the chairperson of the Social Services Committee, Georgina Beyer, has pointed out, the total penalties have exceeded arrears since September 2001.

So action is really needed to encourage those lapsed parents to re-enter the system. It is far less expensive for New Zealand to write off the debt penalties than the arrears. The debt penalties are paper money at this point in time. Of course we all know here in this House that it is far better for people to pay their child support on time. We also know that it is only by bringing or trying to bring all of the non-payers into the actual system that their children will receive the financial support they are entitled to receive from their parents. There is no easy way to deal with this issue. We are very aware of that. We all know, too, that children are a parent’s responsibility. As Judith Collins pointed out, children must come first. We totally agree with that sentiment.

There is an obligation on members of Parliament to ensure that parents who should be contributing to their families and their children do actually contribute. This bill goes some way towards trying to do something about this situation. It has irked many members in this House for a long time, and New Zealand First members are among them.

We know that children and teenagers are expensive creatures to rear and to keep running. Meeting the needs of teenagers in today’s society to ensure that their overall well-being and self-esteem are intact so that they can interact with their peers to the best of their ability is really important. We want our children to be the best they can possibly be. As parents, we all know that peer pressure to have the right clothes—particularly labelled clothes—to have a cellphone they can use, and an iPod, is pretty intense. It is really tough for teenagers when they cannot compete on an equal footing with their classmates.

We all know that children can be really cruel to those who are not judged to be part of the crowd. As many members have pointed out, Rodney Hide may not be considered to be part of the crowd with his Dancing with the Stars performances. We in this House all know that children can be totally disadvantaged in both the short and the long term if they do not receive support, particularly financial support, from both their parents. It is really unfortunate that in these cases the children ultimately become the innocent victims. In New Zealand First we believe that when a mother names the father of her child or children, except in exceptional circumstances the father should contribute to the lives of those children financially as well as emotionally, or with his time.

I will extend that to say that I think parents should contribute emotionally, and I know how often parents contribute financially right throughout the lives of their children. Even then, as parents—and many of us in this House would say this—we are never not responsible for our children, no matter how old we are, probably until the day our children become responsible for us in our old age in our rest home.

It is essential that as far as possible a parent’s child support liability accurately reflects that parent’s ability to provide financial assistance for his or her children. We have all heard stories about this. We heard today another story whereby one of the liable parents has managed to put all of that parent’s assets in a trust so that, by and large, they are actually hidden. Of course, these people pay far less than what they should pay. Unfortunately, again, it is the children who suffer—something that should not happen at all.

On the other hand, I have heard of a liable mother who provides so much for her absent children that she is actually forced to live on the breadline. Unfortunately, life would be easier for her if she were unemployed and on a benefit, and paid only the bare minimum. But that is not the message we want to send to people, and it is not what this mother wants to do. She is quite happy to look after her children to the best of her ability.

It has also been suggested that there may be many more people than we know about who have absconded and are resident across the Tasman. If we can ensure that the numbers of people doing this can be significantly reduced or tracked down, then that should be done.

This bill is essentially about supporting children. We always say children are our future. They deserve the support of both their parents. This is a really serious and important issue, and measures did need to be put in place. We condemn the Government when these measures are not put in place. New Zealand First supports this bill and believes that it goes some way towards meeting the needs of both the parents and the children in these particular cases.

TARIANA TURIA (Co-Leader—Māori Party) Link to this

Tēnā koe, Mr Assistant Speaker. Tēnā tātou katoa. Eight years ago, a cunning piece of advertising was conjured up by the Inland Revenue Department to promote child support. It featured a young boy who, dejected and forlorn, is unable to play a good game of soccer. This is all due to the baddy, his daddy, who had supposedly failed to provide child support. Ostracised to the sideline by the coach and his peers, the lad provided a visible focus for New Zealanders to express their outrage about the blatant negligence of the liable parent. The suffering child provoked an immediate controversy, with the Children’s Agenda, the Child Poverty Action Group, the centre for child and family studies at Auckland University, the Hillary Commission for Sport, Fitness and Leisure, and even the soccer association all speaking out loud about how misleading the picture was.

Although the advertisement managed barely a 2-week run, its impact was enormous, fuelling public perception that the liable parent was not paying his—and it is normally a “his” —dues, leaving the poor old public taxpayers forking out yet again. It reinforced an impression that the “d” in “DPB” stands for “deviant”, when in actual fact the “d” for deviant is solely that in “IRD”. The caregiver parent on the domestic purposes benefit pays liable funds directly to the Inland Revenue Department—not for soccer, not for food, not for piano lessons, not for school bus fares. It is a direct transaction to the Inland Revenue Department that bears little reference to how the individual child support payment is used. The Māori Party is pleased to stand today on behalf of that soccer player and both his parents—custodial and non-custodial—to support a bill that will help to lift some of that discrimination.

It would be fair to say that the outrage and anxiety of the general public around the issue of child support was also represented among the 35 submissions received on the Child Support Amendment Bill (No 4). Some of the women with sole custody of their children relayed how their ex-partners had structured their financial affairs to reduce their personal incomes, thus lessening their financial liability. We all know of anecdotes where wealthy liable parents have somehow been able to avoid their responsibilities by hiding their income source. The bill addresses this situation by allowing the Inland Revenue Department to investigate a liable parent’s true economic income, and to enable this information to be used in the administrative review process.

Yet other submitters expressed a high level of concern over this aspect, perceiving it to be part of the snooper surveillance culture that this Government likes to fall into. The Institute of Chartered Accountants suggested that levels of child support were a matter for parents to settle, and the Inland Revenue Department should not be able to interfere in that process. While the Māori Party is always opposed to any move that invades personal privacy, or that intervenes in and affects the possibility of achieving effective relationships within whānau, our overriding concern in this specific instance must be the well-being of the children. The key driver for this bill is ensuring the responsibilities and obligations of parenting are duly respected so that our tamariki do not miss out.

The Māori Party is absolutely committed to any policy that can be applied to support whānau development. To truly consider whānau development requires a revolution in the thinking of tangata whenua and the Crown. The imposition of Crown programmes being “done to” whānau does nothing but increase dependency upon a benevolent State. The revolution is in how we consider whānau, and how we harness its strengths, potential, and talent.

We can encourage whānau development by supporting fathers to become involved with their children. This bill does that by making it easier for the non-custodial parent to contribute to paying child support. I have a lot of sympathies for fathers who, through the decisions of the Family Court, end up missing out on the special privilege of parenting. I firmly believe that no one should raise a child alone. It is the whakapapa right of every child to know his or her parents, whether or not they live in the same home. I am also concerned that, in restricting access to the father, we are also denying the children the unique knowledge and experience that spring from having relationships with their extended family. It was with considerable concern that we read submissions from fathers describing how their ex-partners who have custody are exploiting their generosity. Some of them expressed a belief that custodial parents were refusing to share custody out of fear that they would receive less money. The submissions revealed tales of men wanting to protect themselves from money-grubbing women, or of women victimised by men’s economic power. They tell of a resentment that builds from custodial decisions, a resentment that manifests itself in a battle between parents, a resentment for which the child suffers.

Our sadness was focused on the avoidance of parental responsibility that came through these concerns. We are absolutely clear that trying to make do on meagre benefits is an enormous struggle. Whānau face huge difficulties every day to feed, clothe, house, care for, and educate their children. The child support system has been seen, in the midst of that struggle, to cut across any possibility of better relationships between divided families sharing children. Too often the bitterness and distrust experienced within the parental relationship colour the nature of the parenting received by the child.

But in a Māori world view parenting is not the sole domain of the birth or whakapapa parents. Kūni Jenkins describes the interaction of parents and their children with the rest of the whānau in the following terms: “… the Maori woman was part of a community. The home unit was part of the whole kainga. Grandmothers, aunts and other females and male elders were responsible for rearing the children of the kainga. The natural parents were not the sole care-givers.” The Māori Party is committed towards the restoration of obligations, responsibilities, and roles to strengthen whanaungatanga. Although the Child Support Amendment Bill (No 4) focuses on the levels and application of financial support, we are determined to promote the massive resource that is available for children and parents within the embrace of the wider whānau. Although the bill changes are basically intended to increase compliance with the existing liability assessment formula, we believe that there is another formula for success just waiting to be revealed within the layers of whakapapa. Justice and fairness require that all children are able to maintain their genealogical links to the ancestral treasures into which they are born. Child support must support every child to know his or her birthright, to identify his or her history, and to live out his or her ancestral aspirations.

Parents, whānau, and hapū have the responsibility of upholding, enforcing, and maintaining the cultural values within the whānau. It is a collective responsibility not reserved for the exclusive role of two parents. The expression “Children can shed tears but the embarrassment is the parents’.” conveys some of the nature of the mutual play between child and whānau. The way in which children are raised, including whether they have been taught the appropriate values, is reflected in how they behave, and rather than being an individual thing, the shame or glory, the embarrassment or pride, reflects on the whole whānau. I remember many excruciating moments as a child, knowing that one wrong word or one careless action would reflect on my Auntie Wai, my grandmother, my aunties, my uncles, my cousins, and beyond.

This is not, and does not have to be, the preserve of tangata whenua. I am often intrigued in this House how a crisis for, say, a Māori family is deemed to be the problem of the Māori MPs only. It is an extension of what happens in many school communities, where a Māori teacher becomes responsible for all the Māori problems, even if sometimes the problem is actually the way the non-Māori teacher is teaching. We can all take responsibility for each other, and the Māori Party wants to encourage and foster that sense of collective responsibility that is essential to a caring community. Whanaungatanga has its cost, and that cost is collective accountability. But it also yields such richness through the reciprocal obligations and ownership, which mean that, whether in a crowd or on one’s own, one is never alone. Children are the hope of our future—the foundation of all our futures. We must take every step forward to consolidate that foundation, to make it secure, stable, and strong. The Child Support Amendment Bill (No 4) is one step along the way to achieving that foundation. The rest of it is up to all of us—all of us. Kia ora.

ANNE TOLLEY (National—East Coast) Link to this

I stand to speak to the second reading of the Child Support Amendment Bill (No 4) as a member of the Social Services Committee, and I thank the chairperson and fellow members of the committee for the work that was done on this bill.

This bill brings to us several major changes to the legislation. First of all, it intends to allow the writing off of half a billion dollars in penalties.