Child Support Act 1991, ss 33–36

Inland Revenue (IRD) calculates each parent’s income (called your “child support income”) and compares them. The difference between them will be relevant to working out who has to pay child support (see: “Weighing the parents’ income difference against the difference in care costs”).

IRD works out your “child support income” by starting with your taxable income (before-tax income) and deducting:

• a “living allowance” – this is your costs in supporting yourself
• any relevant “dependent child allowance” – this takes account of any children you have with your current partner (in other words, the costs of raising your other children who aren’t covered by child support), and
• any relevant “multi-group allowance” – this takes account of any children from another ex-partner that you have to pay child support. The purpose of this allowance is to make sure you’re able to pay for all your children who are covered by child support.

Inland Revenue then works out each parent’s proportion of the combined child support incomes of the two parents – this is called your “income percentage”. For example, if your ex-partner earns one and a half times your income, your “income percentage” is 40% and theirs is 60%.

As the starting point, Inland Revenue takes your taxable income from a previous year. If you earn salary or wages, IRD will use the previous calendar year (January to December) for this, while in other cases it will use your taxable income from the tax year (April to March) before the last tax year.

If your income has changed you can ask IRD to take this into account.

Child Support Act 1991, ss 40AA-45

Your new partner’s income isn’t taken into account for child support purposes, because they don’t have any legal responsibility to financially support your children.

Child Support Act 1991, ss 36B, 36C

Note: A caregiver who isn’t one of the child’s parents (a “non-parent carer”) can also receive child support. Their income isn’t taken into account in assessing child support, only the parents’ income.

Child Support Act 1991, ss 14–16

Inland Revenue looks at how much of your child’s daily care you and the other parent are each providing (basically they look at how much time the child spends with each of you).

If there’s a Family Court Parenting Order in force covering the children, IRD must use the terms of that order to work out the different proportions of care. In particular, if the order specifies a proportion of nights when the children will be with each parent (for example, four nights a week with one parent, three nights with the other), IRD must take that as the proportion of ongoing daily care for child support purposes.

If there’s no Parenting Order, IRD must look at the number of nights the child spends with each parent to come up with the “proportion of care”.

However, IRD doesn’t have to base its assessment on the Parenting Order, or on the number of nights a week when there’s no Parenting Order, if there’s evidence that this wouldn’t accurately reflect the real proportions of care.

The proportion of care you provide will then be turned into a “care cost percentage,” using the table for this from the Child Support Act. Your care cost percentage is the share of the costs of raising the children that the child support scheme sees you as meeting through the day-to-day care you provide.

Child Support Act 1991, Schedule 2

In general, if you provide more than 50% of the care, your care cost percentage will be more than your proportion of care. The reasoning for this is that the more often the children stay with you, the more likely it will be that you’ll pay for extra expenses like food, school trips and clothes. So, for example:

• if you have the children four nights a week (a care proportion of 57%), your care cost percentage is 59%
• if it’s five nights a week (care proportion of 71%), your care cost percentage is 76%
• if it’s six nights a week (care proportion of 86%), your care cost percentage is 100%.

The care you provide won’t be recognised as a care cost percentage at all unless you’re providing at least 28% of the care (in terms of nights, at least two nights a week). So if you’re providing less than 28% (only one night a week), your care cost percentage is zero.

Note: For child support purposes, any care provided by someone else in your household, such as your current partner, is treated as care being provided by you.

Child Support Act 1991, Schedule 2

The key step in assessing whether child support will be paid, is when each parent’s income percentage (their proportion of the two parents’ combined income) is compared to their care cost percentage (the proportion of the costs of raising the child that they’re meeting through providing direct care).

If your income percentage is less than your care cost percentage, then you’ll receive child support, because you’re more than meeting your share of the costs of raising the children through the direct care you provide. If your income percentage is more than your care cost percentage, you’ll have to pay child support.

The difference between your income percentage and your care cost percentage is called your “child support percentage”, or “CS percentage”.

Child Support Act 1991, s 31(1)

Note: Regardless of the outcome of the assessment explained above, a parent won’t receive child support if they have care of the children for less than 35% of the time, and they won’t have to pay any child support if they have care of the children for more than 65% of the time.

Child Support Act 1991, ss 2, 36

If a parent has children with different ex-partners, this is called having more than one “child support group”. For example, you might have two children by one ex-partner (in which case those two children are one child support group), and another child by another ex-partner (that other child is a second “child support group”).

IRD takes account of the fact that you have more than one child support group by:

• deducting a “multi-group allowance” when your income is assessed (see: “Working out the parents’ incomes and comparing them” above), and
• applying a “multi-group cap” – that is, a limit on the total child support you can be required to pay for all your qualifying children (see: “Is there a minimum and a maximum amount of child support to pay?”).

Child Support Act 1991, s 35B

The child support scheme takes account of the costs of raising other children you have with your current partner – that is, children who aren’t covered by child support because you’re living with their other parent. The scheme does this by deducting a “dependent child allowance” from your taxable income when your income is being assessed for child support purposes (see: “Working out the parents’ incomes and comparing them” above).

Child Support Act 1991, s 9

If you are a sole parent getting a benefit, you can choose to apply for the other parent to pay child support. You can keep the money that you get from the other parent, but the money will be treated as income by Work and Income. Your benefit may be reduced if you earn more than $160 per week in total. If you have a private arrangement with the other parent for child support, you have to tell Work and Income how much child support you get.

If you apply for child support through Inland Revenue, Work and Income will be automatically told how much child support you were paid by Inland Revenue. Child support is paid monthly by Inland Revenue, but your benefit will be paid weekly. The child support you receive will be charged forwards against your benefit. For example, if you receive $800 a month in child support payments, Work and Income will treat this as $200 of income per week over the next four weeks.

Different rules apply if you receive the Unsupported Child’s Benefit for a child you provide 35% or more of the ongoing daily care for. You have to also apply for a Child Support Assessment through Inland Revenue. Any child support you get will be kept by Inland Revenue to help pay your benefit. If the amount of child support you get is more than your benefit, you will get the difference. For example, if you get $310 from the Unsupported Child’s Benefit and also get $400 per week in child support, the government will keep $310 of the $400 in child support to pay for your benefit. You will then get the left over $90 in child support on top of your benefit.

Child Support Act 1991, Part 5A (ss 89A-89ZE)

Yes. You may be exempt from paying child support if:

• you’re in prison for 13 weeks or more
• you’re in hospital for 13 weeks or more
• you’re under 16, or
• you’re the victim of a sexual offence, such as sexual violation, and you believe that the child was conceived as a result of that sexual offence.

For these exemptions to apply you’ll also have to satisfy some specific income qualifications, except that there are no income qualifications for the exemption for victims of sex offences.