Child Support Amendment Bill

The House is in committee on the Child Support Amendment Bill and the Secondary Legislation Bill. Members, we turn first to the Child Support Amendment Bill. The question is that Part 1 stand part.

Thank you, Madam Chair—oh! Yes. Madam Chair. Just checking—I can’t quite see as far. I want to take a brief call. One of the things that we discussed at some length in the select committee process was around the removal of the incremental fees. We discussed that on the basis that some of our submitters were quite keen to see those incremental fees stay. So I would be interested in the Minister in the chair, David Parker, please, explaining to us why he believes that the removal of those incremental fees will, in fact, support liable parents actually engaging in the process. One of the reasons that I am quite interested in this is that there was a little bit of pushback, and I think it was some interesting pushback, in regards to what we know about liable parents. Our understanding was, indeed, that the liable parent, at certain points, disengages with the process when fees and penalties are too high. So I would be interested to know from the Minister, please, if he could talk to us about incremental fees and how this change in the legislation really supports our parents to pay their fees in time.

Thank you, Madam Chair. It’s good to be talking on this bill during the committee of the whole House. The issue I want to talk about is actually my Supplementary Order Paper 22. We clearly flagged—and when I say “we” I mean the New Zealand National Party—included as a minority view in the commentary on the bill, that there were two issues that we were raising and had concerns about. The first one was the issue of penalty payments and who should get the benefit of the penalty payments.

Just to put this in context, at the moment there’s probably about an estimated $2.2 billion of outstanding child support payments at this point in time, which is an extraordinarily high amount of money. However, the core part of the debt, the core overdue amount, is roughly about $500 million. The balance of that is made up of penalties. There’s a lot of good stuff in the bill about reducing the penalties, and we’re very supportive of that in terms of giving more time for parents to work out their new arrangements so that the child is at the centre of any payments.

But what I wanted to ask the Minister in the chair, David Parker, about is the issue around my Supplementary Order Paper, which I have flagged in the committee and I have flagged when we submitted our minority view. We would like to see the penalty payments that accrue as a result of one parent not paying their fair share on time, go to the other parent, who would normally be the caregiver, and in many cases that is often the wife of the former partnership. Obviously, it’s very much harder on women who are in that situation. So can I just ask the Minister: why has he not taken the opportunity? I’ve clearly flagged it in the select committee. We included it in the minority view. Why hasn’t there been any further work done on this? Of course, we’re looking for support.

Just on that note, I find it rather strange that members of the committee can read the report—we were the only ones to put a minority view in the commentary to the bill. No other party did. Yet, with some surprise, I note that there’s other members from ACT and the Greens who have basically tried to replicate what I’ve put in the minority view. I just find that a weird—why don’t you become original and come up with something different? I hope to see some more stuff coming from you guys tonight. I’ll be watching and listening very carefully, because if you want to just come up with stuff that we talked about in the committee, we’re not going to do the scrutiny which we’re required to do on this bill, which we’re required to do in this House of Parliament, to scrutinise the Government. So I would just say that to you.

My question still remains for the Minister: why hasn’t he taken the opportunity, and is he open to the concept of making sure any penalty payment, if it’s collected by the IRD, is subsequently passed on to the caregiver? It may not be able to be done in this bill, but certainly I would like to understand whether the Minister finds favour with that argument or not.

If I may refer to the first two contributions that have been made, the background to this bill, of course, is that the last Government, the National-led Government, realised that there was more flexibility able to be introduced into the child support payment system as a consequence of the upgrade to the computer system, which was started under the last Government and is just about finished now. So they commenced some policy work as to whether the settings were right, and one of the viewpoints that was expressed, and known, I think, to political parties across here, is that the penalty regime has been so harsh that people give up because the penalties become such a substantial part of the debt. Andrew Bayly’s reference to that is acknowledged. There is some truth in that—that the penalties regime was so harsh that people gave up, and therefore there were lower rates of compliance, because the penalties were too harsh.

Now that we’ve got a flexible software system, we can actually, if Parliament wants to, change those settings relatively easily, because it’s a much smaller task to change the administration of the child support payment now that we’ve got a decent computer system—and I’m sure, if officials think I’ve got any of this wrong, they’ll hand me a note. In respect of what the bill does as it comes out of select committee—because there does need to be an incentive for compliance, which is created by a penalty regime for people who don’t comply; it’s just that the penalties regime was too harsh. So there’s an immediately penalty on day one now of 2 percent of the sum if people don’t pay it on time, but then there’s a period allowed for the department to contact the liable parent and enter into a payment reduction plan. That period is 28 days. If within that 28-day period there hasn’t been a payment plan put in place, there is an additional penalty of 8 percent, which means that the effective penalty overall for a liable parent who doesn’t meet their obligations and then doesn’t come to a repayment plan is 10 percent.

The bill as it came back from select committee had incremental monthly penalties of 2 percent per month, and 1 percent per month thereafter. We’ve reflected on that. We’ve looked at the financial effects for the Crown, because there is a cost to the Crown of this, and, through a Government Supplementary Order Paper in my name, we will be proposing to remove the subsequent penalties—the 2 percent per month and the 1 percent per month in out-years. So I think that answers the first member’s questions. In respect of the second member’s question as to whether we would be backing that Supplementary Order Paper, and any other Supplementary Order Paper that hasn’t been filed within the requisite period and that has financial consequences for the Crown, it will, as I understand it, be out of order, so won’t be voted upon.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. Madam Speaker, I’m rising to speak to Supplementary Order Paper 21 in my name, and also to respond to some of the points made by Andrew Bayly. I am incredibly surprised to learn that he believes that his Supplementary Order Paper (SOP), or my SOP, replicates parts of the other, particularly because the very purpose of our SOP is to address the inconsistencies in approach that is taken in delivering child support payments to beneficiary households.

So I’m not sure if it will be visible to those on the screen—oh yeah, I can see it is, slightly—but this is a small diagram that I have drawn to inform members of the committee but also to ask the Minister if he would be interested in supporting this, because, of course, he mentioned just now that the very reason that these changes are being brought before the House, in this Child Support Amendment Bill, is to actually rectify some places where the law at present is too harsh, which, I think, by any other name is an effect of attempting to give a tangible sense to the kindness that this Government prides itself on. So when it comes to the SOP in my name, it speaks to changes—particularly to clause 141—around payment to receiving carers. Here it would require, and I quote, “All money received by the Commissioner by way of child support in respect of a qualifying child … shall be paid to the receiving carer in accordance with this Part.”

Importantly, and I emphasised this during the second reading of this bill, what presently happens if you are a custodial parent in a beneficiary household receiving some form of benefit or welfare support from the Government is that you are not allowed to be in a direct relationship, when it comes to child support, with the non-custodial parent. It is the IRD that sits in the middle of that relationship, takes those child support payments from the non-custodial parent and will take away that amount which your benefit amounts to, and only give you that small amount on top. This is the diagram that I’ve attempted to draw for my colleagues across the Chamber. It is the case right now that if you are receiving those child support payments, the IRD is receiving those child support payments, it is only that small amount which exists above the benefits as received from the Crown that will be passed on to that whānau, to that household—ultimately compounding disadvantage.

I believe that the Minister knows this because the Government commissioned this advice as the Welfare Expert Advisory Group’s recommendation 27 that says to not enable this kind of practice to continue. On top of that, the Social Services and Community Committee heard from the Children’s Commissioner, which asked for this very change as well. So I ask the Minister if he has considered supporting an SOP like this, if it was considered in the drafting of this law, and if it is considered moving forward—should he not choose to support it today—to ensure that Government policy and legislation moving forward aligns with the Government’s own commission advice from the Welfare Expert Advisory Group to reduce child poverty in line with the Government’s stated aims.

If I could just, first of all, correct my earlier intervention, the amendment to the legislation post introduction and first reading, stripping out the subsequent penalties of 2 percent per month and 1 percent a month occurred at select committee, so it’s already in the revision-tracked version of the bill before us, and it’s not in the Supplementary Order Paper. I apologise to members to getting that wrong.

In respect of Chlöe Swarbrick’s point, I understand it; indeed it has been Labour Party policy that we address and make more direct the pass through of liable parent contributions to beneficiary families. We’re not doing it in this bill for Budget constraint reasons. So far, in respect of the prioritisation of different ways in which we assist beneficiary families, we’ve chosen to do that universally through increases to benefit levels in respect of low-income families; through increases to the minimum wage; the Best Start payment, of course, for families with younger children; and increases to the accommodation supplement. Although we would like to be able to devote the money to pass through child support payments against those other priorities, we have not as yet and we haven’t committed to doing so.

Kia ora e te Mana Whakawā. Thank you for the opportunity to make a contribution. I have been a receiving parent, and I have had so many dissatisfactions with the liable parent in terms of non-paying child support, to the point that I just gave up and didn’t bother that line and just carried on with my life. So my question really, Minister Parker, is about the new section 129A in clause 41 for automatic deductions for newly liable parents. My question is around the privacy of the liable parent with employers: the employer’s ability to process the automatic deductions for the liable parent, and also the privacy of the liable parent if they do not want to have their employer know their business—that they are actually a liable parent.

It will be good to hear the Minister respond to that question, because although in my experience—and I know a lot of people have come through it—of the non-paying liable parent making that contribution to the point that it’s stressful, at the same time we do have concerns around the compliance burden for employers and also the privacy of the liable parent in their workplace. If the Minister can answer that, I’ll be really interested in hearing his response. Thank you.

Thank you, Madam Chair. I want to start by saying thank you to the Minister for outlining the fact that it was quite a substantial discussion document by the previous Government that led to some of this work, and I just respond to a comment by the member that spoke for the Green Party, Chlöe Swarbrick, by reminding the member that this is a Minister of Revenue, and a Minister of Revenue wouldn’t normally treat anything with kindness. He is the man who is responsible for filling the Government’s coffers, so good request, but I’m not sure—or I’m not that optimistic—that he’s going to take that invitation too seriously.

But I do want to come back and just ask a couple of questions around my colleague’s Supplementary Order Paper (SOP). Because this is an exact situation where the penalties that are being collected go straight into the Government’s coffers, and why can’t that go in to support the children that are affected by this? The member from the Labour Party that spoke before me talked about the challenges of being a receiving parent and not getting funds from the liable parent and giving up on it, which is absolutely the last thing that we’d want to see a parent do, so obviously some of the changes that have been made will be helpful for that. But my question is: why has the Minister just completely out of hand discounted the SOP that my colleague has put forward, given that it is only a penalty, and is the Government that worried about collecting more taxation that it requires the penalties that are coming in from liable parents? I will have other questions, but I shall leave it at that one just for now.

I’d just like to stand up and speak to my Supplementary Order Paper 20—not 22; so I got in there a little bit earlier than the National Party, even though you are saying that I got in after you. I’d like to just say that my Supplementary Order Paper is just to require that penalty fees—instead of being paid to the Crown—go to the carer that is taking care of the child.

At the moment, as the Child Support Act stands, Part 9 requires that all money collected by the Crown under the Act be put into a trust account and be paid out to the people who received the child support. All I’m wanting to do is take away the exception of the penalty provision from this, and make sure that instead of going into a general Crown account, this would just remove that exception so that the penalty payments go into the same place as any other money collected and then go into the account set up for the transfer to the relevant carer. There is not much of a change and I cannot understand why it is so hard.

Thank you, Madam Chair. In respect to the privacy issue that was raised by a speaker two speakers ago, there is a discretion for the Inland Revenue to, at the request of someone who has privacy concerns, accept another payment method rather than payment via the employer. So it’s the default method if there’s no other action taken, but if someone does have concerns, they can raise them with Inland Revenue and on a case-by-case basis and Inland Revenue can determine whether that’s acceptable. I would envisage that, if the person who’s offered the alternative payment method would normally be believed then they would accept the offer of alternative payment methods rather than via the employer. But then, of course, if the person defaulted on their obligations and it was just a ruse to avoid liability, they would probably return to requiring deduction from wages via employers.

In respect of the penalties point: of course the cost of administration of this falls to the Inland Revenue Department. I suspect that, in respect of the vast majority of penalties, the costs that the department incurs in recovering those penalties is actually higher than the penalties, but, in any event, we’re not supporting that particular Supplementary Order Paper, which I understand is also out of order because it has fiscal effects and wasn’t submitted to the House in time to meet the deadline.

Kia ora, Madam Chair. I wanted to rise and speak to the issue that has been addressed by previous speakers, which is that a punitive approach has not been shown to increase compliance. The previous administration admitted this when they removed sanctions on sole parents, acknowledging that a punitive approach did not increase compliance within the welfare system, especially when naming fathers and them providing child support as a result, which is why we are welcoming a step toward reducing some of the subsequent penalties under this Act.

But I did want to speak firstly in support of the ACT Party’s Supplementary Order Paper, mostly because it does follow within the principle of at least putting some more money into people’s pockets. While we do not support penalties in general as an approach towards increasing compliance, we acknowledge that, within the welfare system and income support system that we have, we have a duty to ensure that people have as much money as possible to make ends meet.

This leads me to my question, which is around the response for my colleague Chlöe Swarbrick’s Supplementary Order Paper which would’ve advanced the Government’s goal of making the Welfare Expert Advisory Group report a blueprint for this Government, and this is an opportunity to continue making a blueprint for this Government’s welfare reforms. When the Minister says that this Supplementary Order Paper by Chlöe Swarbrick wouldn’t be introduced because of budgetary constraints, I’m interested to know: how much does he advise it would cost, and, more broadly, how much does he believe that making this change would actually help towards reducing child poverty in Aotearoa, and, additionally, how much would it reduce costs elsewhere in the welfare system by nature of low-income families requiring hardship grants in order to make ends meet?

I rise very briefly to ask about the definition of income, because as a Family Court lawyer and as a friend of separated parents, I have heard time and again the angst that is created by the feeling that the ex-partner is concealing sources of income. While it is, I think, going to be welcomed that interest and dividends are now included, I would like to hear from the Minister as to why the definition of income is not being extended further to ensure child support is based on parents’ real income. It is something that causes a great deal of angst for separated parents, and it is something on which I would like to hear from the Minister.

Thank you, Madam Chair. I just want to pick up on this issue around penalty payments being passed on to the parent who is caring for the child but hasn’t received their full entitlement to support their child in care. I can accept the Minister’s argument, to some extent, that the IRD has an administration cost around it in terms of collecting, and that therefore—I think the argument was—because there’s a higher administration cost, all that penalty amount should pass on to the IRD. However, I think there’s two things that have changed. The first one is—and the Minister referred to this—that we’ve got a new START system coming into play on the IRD Business Transformation Programme. There are big computer roll-outs that have been taking place for the last four years. So the costs around administering this stuff is now largely going to be done electronically. Secondly, a lot of that money in terms of the collection of it and administration is now being imposed on business, which is a separate point.

So that’s one side of it. The other argument, I would suggest, is that the whole intent of what we’re doing in this bill is to streamline it, make it simpler, and actually try and get around the issue of penalty payments occurring. So those people who are very tardy under this system, under what this bill will bring in, will be people who are quite deliberate, because they would have gone through the 28 days that the Minister referred to and would’ve still been non-compliant.

So I heard what the Minister’s said, but I just don’t think the arguments are persuasive that we need to have a system where all the penalties need to go to the IRD to cover their costs, given the fact it’s now largely electronic and we’re trying to minimise penalties. At the end of the day, I suggest to the Minister that he’s actually not looking at the purpose and intent of this bill. The purpose and intent of this bill is to look after those children in broken homes, who are in difficult family arrangements, where one parent may not even be providing any care at all, or very limited care, and the recompense in monetary form is not taking place. I think that’s what we should bear in mind in this bill.

I didn’t even hear from the Minister whether, in fact, he might contemplate having a further look at this issue. I can understand why he mightn’t want to do it tonight, even though we’d flagged it well in advance during the select committee process—but I ask him whether he is prepared to contemplate this as a course of investigation, so when we do the next round of upgrading this Child Support Bill, and whether it might be something that might be on the agenda at that point.

Referring to recent contributions, in respect of the definition of “income”, it is being amended and the purpose of that amendment is to better reflect the liable parents’ financial capability to support. This does incorporate investment income now, including interests and dividends, for parents who are salary and wage earners; it already did in respect of non - salary and wage earners. In addition, there is no longer going to be the ability for the paying parent to offset losses carried forward from earlier years.

In respect of a person who thinks that another parent is hiding income, the Act allows that person to apply to Inland Revenue for an assessment of the liable parent to check that they are paying what they ought to.

In respect of the penalties point, I’ve already said—in respect of the wider issue which actually doesn’t go to penalties; it goes to the underlying payment—that we have sympathy for that position, but, as I said, we have to balance that against other priorities. Whilst it is a policy of the Labour Party that we will endeavour to improve the pass-through of parent contributions in terms of the Budget priorities that we’ve assessed that against until now, including benefit increases, you know, the accommodation supplement changes, the likes of the Best Start payment, and contributions to health and education spending, we’ve found that those other priorities have, to date, prevailed.

Thank you very much, Madam Chair. I just want to raise another couple of issues that came up during the select committee process. These relate to some very strong submissions from submitters around the 50:50 shared care, so where the receiving parent and the liable parent share 50:50 care for their children. The strong submissions that were made relate to why there is a liable parent at all when the parents share the custody arrangements and the care arrangements and the costs for the children of that relationship. I just wonder if that is seen as a fair distribution of where the costs actually lay, because if they are shared equally between the two parents, then why is there a need at all for a liable parent contribution.

The second point that I would make around that—and it was raised in the select committee submissions as well—is about the unintended consequence of that shared care arrangement where the liable parent takes up a new relationship and they have a new family and that new family is actually inadvertently placed in a position of severe hardship. We had some quite impassioned submissions around this—that what we’ve ended up doing, in terms of those liable parent contributions, is left the second family in a state of severe hardship, and I wonder if in doing that, the Government is actually not placing the needs of the child as the paramount consideration in terms of those two families. I just wonder if you could comment on that.

In respect of the first issue, I think that’s relatively easily dealt with. It’s true that both parents might be sharing the cost of raising a child through shared custody that could be 50:50, but the means of the parents might be quite different, and it’s possible to envisage a situation, I think quite easily, where one of the parents has got virtually no income, or has very low income relative to the other one, and it’s fair that the financial contribution between the parent of higher income to the lower income parent is necessary for that other parent to help care for the child.

In respect of the second issue, these issues are very difficult at the margin. I don’t think we’ll ever get the rules to the point where everyone’s completely satisfied. Parents do have responsibility for the children from their earlier relationships, and the rules that we try to devise in society try to get that right. I think, overall, we’re not perfect, but we improve with each iteration.

Thank you, Madam Chair. I appreciate the Minister’s response to the questions that I put before, particularly in outlining specifically that actually what is in this Supplementary Order Paper (SOP) in my name is Labour Party policy. It’s kind of gutting that it’s therefore not going to be voted on in favour and support by, obviously, the Labour majority in this House. But to that point, I assume—in speaking to the fact that this is too expensive, based on other priorities that are presently being weighed up by this Government—that the Minister can give us specifics when it comes to exactly what cost we would be looking at to implement a change like this, particularly because said that it was weighed up, and that it is Labour Party policy, and that there is the opportunity, obviously, as a Government to implement it.

The other point that I just want to make with regard to the changes as proposed in this SOP, is that I think it needs to be really, really clearly again re-emphasised that in the present state of play, when you have a custodial household which is also a beneficiary household, the IRD collects the money from the non-custodial parent intended for child support, and keeps that which offsets the cost of the benefit. On that kind of point, it seems rather next level beyond the pale to me, and in fact to the Green Party of Aotearoa New Zealand, that in fact the calculations that are being made here is that the IRD intends to keep and take and calculate and account for receiving child support. The IRD is intending to receive child support which is supposed to go to children, in turn being aware of the fact that it is compounding disadvantage in an incredibly unequal Aotearoa New Zealand, which was reflected in the Government’s own commission reports.

So, again, I ask the Minister particularly—what is the cost? Because he’s stated that there have been weighing-up decisions made. What is the cost of ensuring that child support, which is intended to support the child, is actually passed on to that child if the IRD’s not deciding to interfere and keep some of that money? What is the cost? And, secondly, what’s holding the Minister back? If this is Labour Party policy, and we have an overwhelming majority of Labour Party seats in this House and they’re the driving force in this Government, what is holding the Minister back?

As to the last point, I think I’ve addressed that on a number of occasions already. In respect of the cost, I don’t have that figure here. I know that, as a party, we costed that before we put it into our policy. Those estimates may already be on the web. I’ve seen other estimates which I don’t have to hand. If the member wants to contact me some other I’m happy to provide her with them.

I just find it a bit funny that we are talking about a Child Support Amendment Bill—it is about supporting the child, not the Crown. My Supplementary Order Paper 20 will ensure that the late fees go to impacted children and prevent the money from being absorbed into the Government’s accounts. The amount you need now is a lot less than what you needed before with these upgrades. We’ve got new computer systems in place. We’re now having employers taking on the responsibility of collecting the money. So how can you justify saying that it is too expensive to just allow these children to have that money that was meant for them in the first place? This will also mean that parents are more likely to want to pay their late fees, as they know the money is going towards their child, not the Crown coffers, and will be going directly to some of our most vulnerable children, who Labour says they want to help.

There is no way the Government’s ahead in any of these transactions.

Thank you, Madam Chair. I want to just ask some questions of the Minister that pick up on one of the comments that the speaker before me, Karen Chhour, raised, and that is the fact that this is a child support piece of legislation. We had a number of submitters who asked us why the best interests of the child weren’t at the heart of this legislation. Given the Prime Minister’s commitment to children, I wondered if, in drafting these changes, there had been consideration for what was in the best interests of the child; and, if not, why was that not considered as the kind of fundamental driver for these changes. I accept, and National accepts, that some of the changes we agree with, but I wonder, and I’m interested in the Minister’s comments, whether or not this is actually, in fact, a missed opportunity to better support children in need.

Children will be better supported after the package that is in bill than they are now. This is a good bill, and it does advance children, and it is in their best interests.

Thank you, Madam Chair. Now, I want to talk about two other matters that we raised—one during the select committee process and one in our minority view; we are consistent. The first one deals with the definition of “income”, and this is an area that we traversed quite significantly during the select committee stage, Minister, and, hopefully, you were aware of what was going on. But we certainly agree with including interest and dividends in the calculation of income which should be used for the assessment of what payment should be made.

One of the issues that we raised repeatedly was around the issue of advances from companies as a way of some people trying to get around disclosing income that would normally be paid either by way of dividend, interest, or salary, or even drawings. So we raised this quite often in the select committee and, obviously, the officials tried to help us on that matter. But what we heard at the end of the day was that they hadn’t had time to consider that. I was surprised about that, particularly with the background of the Minister—why he hadn’t had regard for the issue of shareholder advances being used as a way for people to supplement their income but without being assessed as income for the purposes of determining what payment should be made. So I am interested in what his view is on that and why he didn’t include that form of payment that should be taken into account, into the definition of “income”.

The second thing that we raised, in the minority view, is this ongoing issue of businesses being required to collect and make payments to people in respect of child support payments. So there is this ongoing desire by the IRD, particularly, to impose the cost of collection in the form of businesses doing that, and the HR departments within those businesses taking the money out of the accounts of people that they employ and making those payments. Those deductions all come with time costs for the businesses and, actually, a physical cost in terms of running those departments and making sure their IT systems are all up to speed and making sure that it is correct. So we are concerned that this is a trend that just keeps on going and there’s always the assumption around businesses having to do this.

I note that the Minister said that penalties need to go back to the IRD to reimburse the IRD for its costs—what about for the costs of businesses administering these schemes on behalf of the IRD? There does not seem to be any recompense or even recognition that businesses undertake this function, and will increasingly have to undertake it under this new bill that is going through, and yet there is silence from the Government as to supporting our businesses in doing that and making those payments on behalf, effectively, of the IRD.

Thanks, Madam Chair. The Inland Revenue don’t think the universal rule in respect of shareholder advances would be fair. Therefore, they think that the circumstances of the individual have to be taken into account. How that occurs in practice is if someone thinks that their former partner or the parent of their child is avoiding obligations by constructing their affairs in the way that understates their real income, they can apply to the Inland Revenue for them to do an assessment, which could look through sham transactions. Similarly, the Inland Revenue Department can initiate those things of their own volition if they think it is necessary. And that is why they chose not to adopt a rule.

💬 Andrew Bayly: And second point?

I forget your second point.

Thank you. Just to remind the Minister, the second point was the cost that’s being imposed on businesses. You talked about making sure that the IRD could get access to the penalties to recover their costs, but there’s no issue around cost-sharing or even acknowledging the role that businesses play in terms of capturing that money.

Can I just take the Minister up on his point about sham transactions. These are not sham transactions; these happen every day through companies. There are many ways of remunerating directors and shareholders, and this is but one of the mechanisms, and it’s a pretty obvious mechanism.

If I could quickly deal with the latter point first again: sometimes a shareholder advance will be advanced by a company that’s making no money and there is no income, and a shareholder advance shouldn’t be taken into account for parent contribution purposes. On other occasions, that won’t be the case, so I don’t think a universal rule would be practical. In respect of the value that employers bring to this, yes, we do value that. I don’t think the bill takes any different stance to that which was proposed by the then National Government when they started this work, which envisaged that liable parent contributions would be collected from people’s wages and salaries. The impost of that on employers in practice is actually lower than it was in yesteryear, because these things are so much easier to do via software that enables it.

Kia ora, Madam Chair. I rise and acknowledge my colleagues from across the floor on our select committee who have been through this process, and, as Maureen Pugh was saying earlier, we got to hear some harrowing submissions, some challenging submissions, and, obviously, ideas of how we should change and make this fit for purpose for all people. I guess a lot of it was around liable parents and how do they front up and do their thing. I guess I also want to acknowledge, obviously, the Hon David Parker here for having this piece of legislation. Also I see the under-secretary, Deborah Russell, is in the House as well tonight, who was part of crafting this bill. I want to talk about the four-year time bar. I guess, when I was listening to Maureen Pugh and she was talking—

💬 Hon Member: Name dropping.

Yeah, we go way back. It was around the liable parent contribution. And I guess, talking to the people in my electorate and knowing what people expect of us, it’s often around feelings of loss, of separation obviously, but then it comes to the space around justice, around fairness, and, I guess, who does this bill serve? So I rise to ask that question around this four-year time bar in terms of where it fits in this bill tonight, and, I guess, why the four-year time bar? And I guess, in thinking about the submissions that we heard, there were parents who obviously were struggling with not only potentially being a sole parent or being a sole parent in a different relationship now, but it was really around that re-litigation and that challenge, I think of a previous spouse or a partner challenging the decisions that had been made. So I guess my question is around the time bar and will it be an unfair limit on a person’s right to be assessed on the correct grounds? That’s my question.

Thank you. The four-year time bar is intended to set out a reasonable period that you can go back, and if it was longer than four years it seemed, on balance, that that was unreasonable and that, therefore, the reassessment period should only be able to go back for four years from the end of the relevant child support year. And I’m advised by officials that 98 percent of reassessments occur within a four-year period. So the 2 percent of reassessments don’t have to be balanced against the cost and the complexity and the uncertainty that’s created if you can go back further. There are some exceptions to the legislated time bar to address equity concerns. For example, if a person is subsequently found not to be the parent of the child, then that four-year period wouldn’t apply. Or if information is provided that’s found to be fraudulent, so there’s intentional criminal activity, then that time bar would not apply either.

The Minister has advised that Supplementary Order Papers 20, 21, and 22 may have an impact on the Government’s fiscal aggregates. They are ruled out of order as they were not lodged with 24 hours’ notice.

Part 1 agreed to.

Part 2 Amendments to Schedules of principal Act