If two parents separate, one may have to pay child support to the other, as financial support for the costs of raising the children. Whether child support will have to be paid, and how much, will depend on a number of factors, including how much each parent earns and how much time the children live with each parent.
In assessing whether child support has to be paid, the scheme considers both parents’ incomes, and weighs the difference in their incomes against the difference in how much ongoing daily care each parent provides for the children.
If a parent does have to pay child support, they’re called the “liable parent”, and the amount they have to pay takes account of the typical costs of raising children, and doesn’t simply depend on how much the paying parent earns. It also takes account of factors such as the paying parent’s own living costs and whether they have other dependent children.
The child support scheme is governed by the Child Support Act 1991 and is managed by Inland Revenue.
Which children qualify for child support?
The child support scheme applies to children and young people under the age of 18, except that an 18-year-old continues to be covered by the scheme if they’re still at school.
Regardless of that age limit, child support isn’t paid for a child if they start living with someone in a marriage, civil union or de facto relationship, or if they become financially independent (which means working more than an average of 30 hours a week, or receiving a benefit or student allowance).
Note: A child who is covered by the scheme is called a “qualifying child”.
To be a qualifying child, a child must also either be a New Zealand citizen or be ordinarily resident in New Zealand.
Some key terms used in the child support scheme
- “Liable parent” – a parent who must pay child support.
- “Receiving carer” – a parent to whom child support is paid (they used to be called the “eligible custodian”).
- “Qualifying child” – a child who can be covered by the child support scheme. They must be under 18, and they must not be financially independent or living with someone in a marriage, civil union or de facto relationship. However, an 18-year-old will continue to qualify if they’re still at school.
- “Dependent child” – This means a child you have with your current partner and who therefore isn’t covered by child support.
- “Income percentage” – A parent’s income percentage means their income as a proportion of the combined income of the two parents. For example, if your children’s other parent earns one and a half times your income, your “income percentage” is 40% and theirs is 60%. In assessing whether you’ll pay or receive child support, Inland Revenue weighs your income percentage against your “care cost percentage” (see below).
- “Care cost percentage” – Your care cost percentage is the share of the total costs of raising your children that the child support scheme sees you as already meeting by providing ongoing daily care for them. In assessing whether you’ll pay or receive child support, Inland Revenue weighs your care cost percentage against your “income percentage” (see above).
- “CS percentage” (Child Support percentage) – This is the difference between your “income percentage” and your “care cost percentage” (see above). If your CS percentage is negative (that is, if your income percentage is less than your care cost percentage), this means your share of the costs of raising the children is more than met by the ongoing daily care you’re providing for them, and so you’ll be paid child support by the other parent. If the figure is positive, you’ll have to pay child support to the other parent.