Child Support Amendment Bill

on behalf of the Minister of Revenue: I present a legislative statement on the Child Support Amendment Bill.

💬 SPEAKER: That legislative statement is published under the authority of the House and it can be found on the Parliament website.

I move, That the Child Support Amendment Bill be now read a second time.

This bill was introduced in March 2020 and was considered by the Social Services and Community Committee, who I thank for their work on this bill, a committee that I was fortunate to be part of in the previous term. In the course of their consideration of the bill, the committee heard and read the submissions of a number of New Zealanders who either have personal firsthand experience of the child support scheme or who work with people in that scheme. I thank all those people who took the time and the effort to make a submission. I want to assure all those people who made a submission that we are making the scheme as fair and as simple as possible, and that is what this bill aims to do, but I also want to make it clear that this is not a bill that looks at the child support scheme in its entirety. Such an undertaking would take a great deal of time, which would delay the benefits that this bill provides.

The main purpose of the measures in this bill is to help prepare for child support to transition to Inland Revenue’s new technology platform. Members who have been keeping up with Inland Revenue’s Business Transformation will be aware that the Inland Revenue has been progressively shifting all its operations, in a managed sequence, over to its new technology platform. The final major area of the department’s responsibilities to shift to the new tech is child support, and this will complete the IRD’s transformation programme. The main measures in this bill aim to introduce fairer and more effective penalty rules, compulsory deductions of financial support from source deduction payments made by an employer for newly liable persons, a fairer definition of income used for child support purposes, and a four-year time bar on the reassessment of child support. I will provide a quick overview of some of the main features of the bill to refresh members’ memories.

💬 Penalties: we want to encourage greater compliance and greater engagement from liable parents. One way to achieve this is by imposing penalties on parents who fail to meet their obligations. If a parent fails to pay their child support on time, penalties are imposed, and the bill contains improvements to when and how these are applied. The theory is that penalties provide an incentive for parents to meet their child support obligations, but it’s become clear that overly punitive penalties can cause liable parents to disengage from the scheme, meaning that child support remains unpaid. Imposing penalties becomes a delicate balancing act: too strict, and parents walk away from the debt and their obligations; too lenient, and they’re not incentivised to meet their obligations.

We want to be smarter with how and when we apply penalties. At the moment, if a parent fails to pay their child support on time, an initial late payment penalty is imposed. This is applied in two stages: immediately after the default at a rate of 2 percent, and then a follow-up penalty seven days later. The objective is not to penalise but to get the parent to pay. If Inland Revenue has time to work with that parent to get them back on track before a subsequent penalty is imposed, compliance improves. So we’re proposing to shift that second stage of the initial late payment penalty to 28 days after the due date, rather than the current seven days after the due date.

A further measure relating to the balancing act of penalties was added to this bill last year by a Supplementary Order Paper. The scheme currently imposes penalties when a parent fails to pay on time. There are further penalties known as incremental penalties, which are also added each month the payment remains outstanding. The net effect of the mounting debt is for parents to simply abdicate their responsibilities, so we propose to eliminate these incremental penalties. One other new addition to the bill are proposals to simplify the child support penalty write-off rules. Currently, there are a large number of write-off rules which govern when the IRD can write a penalty off. With the repeal of incremental penalties, we have the opportunity to make these rules simpler. We also feel that it’s important for new participants in the scheme to start off on the right foot. To that end, we’re proposing that newly liable parents have compulsory deductions made from their pay by way of employer. Many people already do have such arrangements with their employers.

The bill also proposes widening the definition of income to include interest and dividends for salary and wage earners. When calculating how much child support is payable, the incomes of both parents are used, but income from interest or dividends is not currently included in the calculation, simply because the amount of that income earned in a year is not known until the end of the tax year. The bill proposes introducing a four-year time bar for income reassessments, as currently exists for income tax. This would provide certainty for parents. The bill also includes a number of technical amendments, which will contribute to a better, more efficient child support scheme. These include proposals such as improvements to the estimation provisions to make them fairer.

In conclusion, this bill will improve the administration of the child support scheme and make it easier for parents to comply with the scheme. I recommend this bill to the House for its consideration. Thank you.

That legislative statement is published under the authority of the House and can be found on the Parliament website. The question is that the motion be agreed to.

Thank you, Madam Speaker. It’s a pleasure to be talking on this Child Support Amendment Bill. The first thing I’d like to say is that we support this bill because it is a fundamental issue that we make sure that where we have broken homes, children are at the centre of how they are cared for and the arrangements that surround them as they grow into adulthood. This bill is part of a continuum of pieces of legislation over a series of Governments with a view to putting in place better and more robust arrangements for payment so that children do actually get the entitlement through their caring parents and so we end up with a more equitable outcome.

Of course, child support debt is a huge issue. There’s currently about $2.2 billion outstanding, and a lot of that has arisen—if you break down the numbers, roughly there’s about $500 million of core debt where one parent has not paid the caregiver appropriate support payment, and, of course, that means the children don’t get access to that money. But the remainder of that roughly $1.6 billion is actually made up of penalties. And as the Minister’s just explained, under the current arrangements there’s some issues around when the penalties start, and it’s a very short period of time after seven days that immediately an 8 percent penalty is incurred. I think that is leading to unnecessary penalties, of course, as they mount up and accumulate and are compounded in terms of the interest costs. That’s why they’ve got such a high outstanding penalty amount in that overall figure.

So what this bill is trying to do is recognise that it sometimes takes time for parents to work out what the arrangements are that they’ll put in place with respect to their children immediately following a breakup, particularly, and how that process works through, and in many cases it takes time. So I think the move to the 28-day test is a practical measure in terms of giving the parties sufficient time to actually work out what those arrangements are, and also for the person who’s making the payments to make sure that those payment arrangements—whether it’s done through their work or whatever—can be put in place. So I think that is a very crucial part of this piece of legislation.

Of course, we support it, and, of course, it’s underpinned now because the BTP programme, which is the Business Transformation programme that has been rolled out by the IRD—it was actually an initiative started under National and it was, obviously, pursued and continued, as it should have been and has been, by the current Government. We’re now nearing the end of that roll-out—it’s a major, major programme—and this is going to be one of the last modules that get put on to the system, so that means that these payments can be better tracked and better managed. And I think that simplifying the rules and moving to a situation where we’ve got an IT platform administered by the IRD to be able to do that is a very, very good initiative.

The thing I would just like to pick up on is there were a couple of concerns that we had, and the first one—and it was one I was particularly keen on—is around the definition of “income”. So there was quite a discussion in the Social Services and Community Committee about what constitutes income. Previously, it was a very narrow definition of income, which was basically what you earned under the PAYE system. Where this bill will take it is in terms of widening the definition of income. And I think, in the first instance, it’s quite right. It includes interest income and includes dividends. Where we had a differing perspective, and it’s something we took up with the officials, is how parents, if they choose to be obstructive or not reveal all their income—how they actually deal with that can take various forms.

So one of the things is, in many instances, what people do with companies is they start paying themselves through shareholder advances. And they can use that mechanism as a way to pay themselves income which will not traditionally be captured under the definition of income. I’m not suggesting for a moment that it’s an illegal practice—it’s a very standard form of payment that shareholders use, whether in their company or a personal situation, but I think this bill hasn’t reflected some of that sophistication. But I do welcome the move towards incorporating interest and dividends, because that’s pretty clear cut. In terms of the shareholder advances, I think that’s something that officials, in time, might turn their mind to, because I think people always evolve, and as you put in a new piece of legislation, people then react to it, and we end up just going down a rabbit hole. So we could have been a bit more comprehensive on that issue.

The other thing I’d like to just note is that losses from prior periods is another way where people have incurred a loss in a previous year. Under the current arrangements, those losses could be taken into account. And what we want to try and do is make sure that parents pay a fair share based on their current income in the traditional sense that you understand current income. So there’s a change around that that I think’s a very good thing.

But I think the other aspect of this bill which we’ve noted—and we noted as a minority view into the report back to the House—is the continual use of businesses to act as the collecting agent for the IRD. We think that trend, which is relentless, is something that we need to question, and we did question during the process. We’ve noted it as an issue that we need to be aware of, because there seems to be a view in Government and Government departments that businesses are there to collect money on their behalf. I think we need to be careful about that, because nothing comes without a cost. And in this case it’s the cost of the HR departments or the one partner of a business owner doing payroll late at night, or whatever it might be, to actually now have regard for collecting money in the instances where payments are collected and paid to the supporting parent. I think this relentless move towards just assuming that businesses can do that—and I think underlying there is this premise that all businesses have dedicated people and this is all fine and dandy. Actually, most of our smaller businesses—and we have about 320,000 operating small businesses—are very small. They are only one or two people - type businesses. And this is a cost, and it is a cost in terms of time, but also in terms of resources. I think this is an issue, and I just want to raise it, and I’m looking across to officials—they know our view on this—that this is something we will continue to have regard for, particularly from our perspective from National, because there is a view, as I said before, that this is leading to a trend that we need to actually arrest over time.

But I think most of the other issues in this bill are very good; we fully endorse them. It’s about fairness and equity and making sure that we achieve the right outcomes for children, particularly when they’re living in a vulnerable situation where one of the parents has left the home and they’re having to cope with new relationships and it’s a very difficult time for young children. We want to make sure that they get the best start in New Zealand, because if we don’t, obviously it leads to greater problems over time. Thank you very much.

Thank you, Madam Speaker. I rise to take a short call on the Child Support Amendment Bill. It’s a pleasure to stand here today. This bill is an administrative bill, essentially, that makes changes to the child support scheme. It does a number of things but before I come to that I’d like to thank the submitters in this process. We heard—including up to some secret evidence. That secret evidence will not be known to this House but we heard a number of stories from people, so we want to thank those submitters and the officials for their good and sound advice. It’s been well covered, but this bill does a few things and one of the things I think is particularly good is the repeal of the incremental penalties. The incremental penalties have been found to be a barrier to paying child support for a very small percentage of people who pay.

Look, my time is short and I will take a further call in the final reading. But for now, I commend this bill to the House.

Thank you, Madam Speaker, and, like my colleague Andrew Bayly, I do want to just put a few things on record. National is supporting the Child Support Amendment Bill in this second reading. But there were a number of issues that were raised in the select committee process that I think are worth just putting on the record. So while the intention, obviously, is to simplify the child support requirements and ensure a greater level of compliance with the requirements, I want to just put on record that many of the submissions we heard actually talked about some of the issues more generally around the child support system and the interaction with, or lack thereof, between the Family Court. And for those submitters that raised issues, some of them were particularly personal and challenging. I do want to say they were taken into consideration but were actually outside the scope of this piece of legislation, and I want to put on record that we do think this is a further area of work. Unfortunately, as noted by the National Council of Women of New Zealand, there actually isn’t a principle in this piece of legislation, although it is the Child Support Amendment Bill, that puts the interests of the child or the children at the heart of this legislation. It was raised by submitters, and I do think there is further work that needs to occur.

One of the areas that, as an electorate MP, unfortunately, you deal with is the child being used as a weapon between warring parents. And part of what they use is the financial support of the child support legislation. That is a grossly unfair thing to do but is the reality often of what happens. And one of the areas that deeply concerns me is parental alienation. So I do think it is important that any consideration of the Child Support Act is about how you support parents, how you ensure they comply with their requirements, and how you ensure you capture all income—and I think this bill makes a significant improvement in that area, because no one wants to see a parent who is liable hiding income that then really is a detriment to their own children.

The part that I don’t agree with is the compulsory collection of child support by an employer. What’s currently in legislation is that if there is a default, then there can be the compulsory collection from an employer through the payroll system, and I think that strikes the right balance. So National disagrees with the fact that this is another area of tax collection for a business. But it’s also important, I think, that it is a personal issue for an employee that has got nothing to do with their employer, and the fact that they have to disclose it—something that I think is quite personal to them and their family, I don’t think is relevant at all. If someone is complying, there should be zero need—zero need—for a business and employer to be privy to that information and part of the process.

There still are a few areas that submitters raised where they saw that there were some areas that weren’t fair. The challenge with the child support legislation is it will never be perfect. And the officials will attest to the fact that we challenged, in a number of different ways, to try and make it fairer, but the reality is it’s a significant improvement on what there is now, but it isn’t perfect. So constituent MPs, if you’re a new constituent MP in this House, welcome to the world of child support scraps. Hopefully, this legislation will mean there are fewer of them, because it is a complicated system, and for a family that is going through the process of separating, the large bulk of them want to comply. So making a system that’s easier for them to comply, I think, is really important and useful. Removing some of the penalties, I think, is also important.

I’ve been reassured by the discussions by Inland Revenue that there is more work going on at the front line to communicate and educate newly liable parents as well as new receiving parents about how the system works, and I think that’s a really positive step. I won’t, clearly, name names, but I think of one particular constituent who came into my office literally with a stack of unopened letters from Inland Revenue that were only about child support, and every time they saw an envelope they freaked out. It was so incredibly stressful. They just didn’t have the ability to comprehend how it all worked, and when they opened the first letter and the second letter and they were trying to read the summary, they got more and more bamboozled, and I don’t want to see any parent—because the impact of that will, highly likely, have an impact on their relationship with their child, and that’s definitely not what we want to see with the child support system.

We do want to make sure it’s enforceable and reflects modern families. As everybody in this House knows, modern families come in all sorts of different shapes and sizes, and we need to have a child support system that reflects that, is easy for people to comply with, and is in the best interests, in my view, of the children that should be at the heart of any legislation that has child in its title. Thanks, Madam Speaker.

The children of separated parents need both those parents to contribute to their financial wellbeing, and thus children need the State to run a collection agency for those contributions that is simple, certain, and fair. I commend this bill to the House because it is a step along the way to that goal. It is fairer because it accurately records the income that parents have, by taking into account interest and dividends. It is simpler because it gives parents who are newbies to the system a grace period within which they can be helped to understand. It does the same thing for defaulting parents—getting alongside rather than penalising them with undue penalties. It makes the system simpler by making payment as automatic as your student loan deductions. And, finally, it reduces uncertainty and it reduces the ability of some minority of parents to cause stress and uncertainty to their ex-partner by unrestrained demands for reassessment of income. It cuts those sorts of discussions off at four years. In summary, I commend this bill to the House because our kids need a child support system as short and sweet as this submission.

E te Māngai, tēnā koutou. Tēnā koutou te Whare. The Greens support this amendment bill, but we are a little bit gutted that there wasn’t the opportunity taken to amend what a few other submitters have spoken about, which is primarily the core focus of this Act—that is, that it talks about the parents but neglects the welfare of children. There’s been a lot of discussion about that transactional nature, and as this Act was actually passed in 1991, it’s probably worth noting that I’m probably one of the only members in the House who was a child whose parents were having to act and operate under this very piece of legislation in their divorce and separation.

Simplification is good, and the reasons for that have been outlined, as is, of course, the limitation on those retrospective reassessments, which can expose substantive liability, particularly for those who may be obliged to pay in lower socio-economic circumstances—especially when you take into account the requirement to pay potential interest. But I do, however, make note of the contribution made by Andrew Bayly, that on the other end of town, whilst it’s really important that we have made those amendments to how income is accounted for, particularly with regard to interest and dividends being included, the ability to wiggle out of this by having that income come through by other means, such as shareholder advances, does still propose a number of fish-hooks to which I hope we begin to pick up and deal with as we move forward in further simplifying and making more equitable this piece of law.

The Child Support Act 1991, as I just alluded to, completely neglects—completely neglects—the concept of the welfare of the child. Importantly, every other piece of legislation that is directly impacting on children includes that, the welfare of children, as one if its major goals. Instead, this Act emphasises the responsibilities and obligations, particularly of those non-custodial parents. It feels as though this framework is almost set up to enable, or to be the legal manifestation of, two parents in a room, arguing about separation or divorce, neglecting the will of their kid, of the tamariki who are in that room—the things that they want, and that they care about. I just hope, again, that as we talk about the development of law like this in the House in future, like was put forward in the submission from the Children’s Commissioner, we think about centring the voice of children moving forward.

With regard to the point that I made at the start of this contribution, the real lost opportunity here, alongside centring children’s voices, is the opportunity to actually address systematic inequality. So I refer to the Children’s Commissioner’s submission, which made it abundant that what happens in this amendment bill does not actually align with the stated child poverty reduction aims of this Government, both in last term and in this term. The way that it does this, or rather doesn’t do this, most particularly is by not taking up the recommendation of the Welfare Expert Advisory Group recommendation 27. That recommendation was “Pass on all child support collected to receiving carers, including for recipients of Unsupported Child’s Benefit”. This may not be immediately apparent to those of us who sit within this House and have the privilege of being pretty distant from the experience of receiving a benefit or welfare support in this country, but I think it’s really important to spell out how the system currently works for parents who are recipients who are on the benefit.

Right now, if you are on a benefit and you are receiving child support, that child support is paid directly to the IRD. The IRD then holds that child support. If the child support is calculated as at an amount more than of the benefits that you are entitled to, as a sole parent, then only the difference over and above your entitlements ends up being paid out to you. The rest of that child support is used by the Ministry of Social Development to offset the costs of your benefit. That is a hangover from a time and place that I thought Aotearoa New Zealand had moved on from. It’s an incredibly punitive approach to our welfare and benefit system. And while some may decry that this is about making sure that people are accountable or whatever else, the fact of the matter is that it’s children who miss out here.

So if we’re to centre those children’s voices, the need of children, here, then we would make sure that the full amount of that child support was passed on, because those actions that are presently undertaken by the IRD as an intermediary actually exacerbate inequality. And that is outlined incredibly well by the submission of the Children’s Commissioner, who spoke to, in particular, the What Makes a Good Life? engagement from 2018. His submission, quoting from a young person from Whangārei, said “Sometimes you can’t afford what you need. Can’t afford experiences - camps and school trips, education, food - like if you have bad health because you can only afford the bad stuff, you’re never gonna get healthy.” This is the kind of reality that we’re grappling with here.

Again, it’s that missed opportunity that the Greens are gutted we didn’t remedy with the amendment bill as put forward in front of the Social Services and Community Committee. I note that those who were on that select committee have contributed, saying as much. But I hope that by putting it on the record today, we have an opportunity to address it moving forward. Because I’m sure, as we all well know in this place, when a spotlight is not shone on these issues, we can continue dusting them under the carpet and pretending that they do not exist. The Greens support this amendment bill because of those important changes that are made, but those changes are primarily administrative. We hope that, moving forward, there’s the opportunity to address the substance, which is growing inequality and inequity in Aotearoa New Zealand, and how that particularly has massive detriment to the children in this country. Kia ora.

Thank you, Madam Speaker. ACT will be supporting this bill, but I have to agree with previous speakers: there is more to be done. It’s great that we’ve managed to change the definition of “income” so that it’s more fair and the money is going towards the children that need it, but I was also a bit concerned that the welfare of the children was never mentioned within this bill. I think we need to be looking at the children’s best interests, and this seems to be forgotten within this bill.

We seem to have a lot of technical changes in this bill but nothing that actually—we had a lot of submitters that came to us and spoke about different issues that were outside of the scope of this bill, but you could see where the problems were. I think changing the late penalty regime so that you’re no longer getting incremental penalties will encourage parents to come forward and catch up with their payments if a deadline is missed, but I also think that—and I agree with National’s concerns—these payments shouldn’t be going to the Crown; they should be going to the parent that was disadvantaged so that it can help the children, which is what the money is meant to be for. I think preventing offsetting losses from previous years of income is fantastic, because this can be a way where a parent can hide money, and we don’t want the children missing out. It should be all about the child.

In saying that, apart from those concerns, my other concern was with small businesses having to take on the extra cost of having to take over collecting money for Inland Revenue. Businesses incur a lot of costs with administering many things, and this is just adding to small businesses. But everything else in this bill I am really happy with, and I hope that we can come back to the child support bill and make some changes where the submitters were concerned. Thank you.

Mālō, mālō e laumālie. It’s an honour for me to speak on the Child Support Amendment Bill, because I have been a person who never got child support by the partner. So I want to acknowledge the last speaker, Karen Chhour, but, actually, the Child Support Amendment Bill amends the actual Act, and in the actual Act, in section 4, “Objects”, it talks about—it affirms—the “right of children to be maintained by their parents”. I like the component of “compulsory”, of this bill, because when I was a person who separated from my previous partner, it took a long time for child support to arrive, and it actually never did arrive. So making it compulsory removes the opportunity for that stressful experience to be experienced by the parent who is left looking after the children. So, on that note, I commend this bill to the House.

Thank you, Madam Speaker. I’m pleased to take just a short call on the Child Support Amendment Bill. While I didn’t sit on the Social Services and Community Committee, I have been an electorate MP for coming on four years now and worked, indeed, in the electorate office before that for a number of years, and I can echo some of the speakers before to say that one of the most often brought cases to electorate offices are child support cases. They are difficult, they are emotional, and they are often very complex. So anything that we do to simplify this law to make it more easy to comply with and less stressful for parents going through what is a very difficult time in their lives is a good thing.

We support this bill. I want to talk specifically about the compounding debt that parents can accumulate. Of course you get parents on the one hand who are shirking their obligations, but then you do get a lot on the other hand, who have come through my doors, who have been through such an emotional and stressful and anxious time that they haven’t got on top of things as quickly as they should have, they didn’t understand what can be a quite complex and difficult to understand process, and they’ve ended up with significant debt. The bill simplifies that and pushes out the date that they will accrue some of that debt, and I think that is a very good thing, giving them more time to come to grips with their obligations and understand some of the complexities of those obligations.

I have to echo the speaker that went before, Louise Upston, on our concerns around making compulsory deductions from the start. I do have concerns around the fact that, as the Hon Louise Upston said, this is a matter in the first instance between the members of that family, and introducing the employer is not something that, in my opinion, is the right thing to do.

I also have read some of the submissions, and I can see that a lot of things that were brought up are very relevant, and there is a lot more work to do. A lot of those things that were mentioned are things that come through my office. But there are a lot of complaints and anxieties that people have around people who are shirking their obligations. There is more work to be done. This is a good first step. I commend the bill to the House, but I do look forward to more changes to this legislation in the future to ensure that children are getting what they are entitled to. Thank you, Madam Speaker.

Tēnā koe, Madam Speaker. The House appears to be at one on this bill, and for very good reason. It makes some much-needed improvements and adjustments. I just note the compulsory deduction regime which is proposed is one that really makes significant progress, not because it’s heavy-handed in any way, but simply because people are human and they have oversight and they have other priorities, and it just makes the decision for them and ensures that they comply, as in most cases they want to, with their obligation to provide the contribution to the parent primarily caring for the child. So it’s really just one of those things where it’s nudging people to make the right decision in a way which makes things a lot easier for them.

That’s just one of the many improvements in this bill, which in some ways is a tidy up of a whole lot of things across the Act to make it more simple, more administratively easy, and more workable. I commend the bill to the House.

It’s an honour to take a short call on this Child Support Amendment Bill today. It was a good opportunity to review this particular part—i.e., the penalties and the four-year time bar—while Inland Revenue are working through their Business Transformation programme. This bill makes for a fairer penalty, in terms of rules, and simplifies the administrative process. And with that, I commend this bill to the House.

Thank you very much, Madam Speaker, and I, too, will make a short contribution about this bill, but I just thought I would elaborate a little bit on the background behind it. This bill was developed first back in 1991, so it is quite outdated, but the administration system, of course, has been quite clunky over the last few years. And it’s because of the investment that was made by the former National Government that has enabled the technology now to introduce a lot more of these efficiencies into the IRD.

We’ve heard about the penalties that have accrued for some of the people who are liable parents and there is a huge amount of debt being carried in terms of these outstanding penalties: $2.2 billion is the figure that is currently outstanding. But of that, $1.7 billion is actually penalties that are owed to IRD. And, of course, what happens when a liable parent falls behind on payments is that the penalties keep accruing and so the ability to catch up gets further and further out of reach. In some cases—we heard through the submission process—some parents actually find it easier to escape and some even leave the country and don’t return, because the penalties make it so unworkable. So this new system is actually a lot more user-friendly and it is a lot kinder to liable parents in terms of the penalties.

One of the things that was raised by submitters around those penalties going forward is that if there are penalties that a liable parent owes to the caring parent, the penalties actually need to go to the carer because they relate to the child, but, unfortunately, that was something that was outside of the scope of this bill. Other submitters talked to us about the shared-care arrangements, where there were 50:50 shared-care arrangements in place. So in that case, there were some strong arguments put forward that there should be no liable parent if the custody arrangements were shared 50:50—but, again, that was something that was outside of the scope of this bill.

The taxable income that is now going to be replaced with net income is, I think, a lot fairer too. We heard from several submitters about the ability for the liable parent to hide income in terms of that taxable income, which set the rate of the child payments. This bill fixes that discrepancy so that it’s not quite so easy to run yourself at a loss, or your business at a loss, so that you keep your child payments to the absolute minimum. As we’ve heard from many speakers this afternoon, the main focus is always the care of the children, to make sure that those children are taken care of. I guess, for me, the best way to avoid child support payments is contraception. And outside of that, there is a real obligation on parents to make their contribution to the upkeep and the raising of their own children.

I’d just like to talk a little bit about the penalty times as well. In the past, and in the current regime, we’ve got penalties that are paid. So there’s eight days of payment, and if they haven’t paid within eight days, then they have to pay 8 percent. But, of course, in eight days, there has been no time for IRD to make contact with a liable parent, and so between, you know, such a short amount of time—and even today to get New Zealand Post to deliver you a letter in eight days is doing really well. So those penalty times are also being adjusted and it’s stretching it out so that liable parents actually have enough time to make those arrangements. There’s also a new grace period for people who are new to making child payments. That grace period is now out to 60 days. There will be no penalties while they get their new payment arrangements in place. They work out the budgets and they get those under way.

One of the things that the National Party had concerns with in terms of implementing this bill was the fact that it was, again, asking employers to be the collector of this and manage the collection of funds to pass on to the IRD. We felt that that was an extra burden on business that was not warranted. But given the tax system and the technology that we have, it has been decided through the Social Services and Community Committee that this is the most efficient way of receiving those payments from liable parents and paying them over to the carer. So, my contribution today—I commend this bill to the House in its second reading and look forward to further progressing it. Thank you.

Thank you, Madam Speaker. I rise to support the Child Support Amendment Bill in its second reading. I want to thank the Minister of Revenue, the Hon David Parker, and under-secretary Deborah Russell for their work in bringing this to the House; also to the members, of whom I am one, of the Social Services and Community Committee, from all across the floor, who got to be part of the debate, the conversation, and for being constructive through that. Also to our officials, thank you for guiding us and for your wisdom. Also, especially our submitters for sharing. For many of them, it was their personal stories, their painful stories—and I appreciate that, as did members of the select committee.

This bill is about improving the administration of the child support scheme and also helping it to fit into, obviously, Inland Revenue’s Business Transformation programme. I believe that this bill simplifies child support, makes it more accessible and also more gracious to people in terms of the penalties. Finally, I want to remember the 182,000 children who are impacted by families in separation, and we do tautoko and support them.

I support this bill and it going on to its next stage. Kia ora.

Motion agreed to.

Bill read a second time.