Chasing the billion owed in child support

Staggering new figures revealed in an Official Information Act request to the Inland Revenue Department show child support payers owe just shy of $1 billion.
But perhaps the really astonishing news is, that’s the lowest the debt has been since 2005.
Of the total debt of $999,707,882, 42 percent of it – $420,645,355 – is in penalties.
The total debt includes 18,688 people whose children have turned 18 or for some other reason no longer have a liability for their children, and yet they still have arrears. Most of them – 12,167 people, or 65 percent – have made an arrangement to pay.
Of current child support payers, more than half of them (52 percent, or 47,560 people), are in arrears. Add in those who should have finished paying, and the number of defaulters climbs to 72 percent.
Just 36 people have been taken to court over their debts in the past 12 months.
Inland Revenue says that small number is because the vast majority of people facing legal action either pay, or make arrangements to pay.
“Court action is a last resort and a lot of work is done to get the money paid before a case is considered for prosecution,” IRD told The Detail in a statement.
In the year to June 2024, there were eight arrests at the border of people with child support debt.
The department says it collected $480 million in child support from more than 127,000 parents in 2023/24.
Today on The Detail we talk to Dr Michael Fletcher, who is a senior research adjunct at the Institute of Governance and Policy Studies at Victoria University. He is an expert in child support policy.
Even he was surprised at how bad the figures are.
“Arrears, and the mountain of debt from both unpaid child support but also penalty payments has been high for a long time, but I was still very surprised at this number [of 72 percent] in arrears,” he says.
“The problem seems to be that Inland Revenue is not following up on the enforcement side enough. So you can have a good system, but if it’s not actually being enforced then the whole thing just breaks down.”
That means single parents – the vast majority of them women – play what several commentators have described as a type of ‘roulette’ on the 20th of every month, waiting to see if their money has come in.
“You don’t know – it might come in or it might not come in. If it doesn’t come in, it seems that’s just tough luck,” he says. “The cost is being borne by the parent with primary care, mostly women, mostly not very high income at all.”
However Fletcher says there have been recent changes in the system for the better. It’s harder for payers to hide their money in trusts or for the self-employed to declare lower income than they actually have for the purposes of being assessed; and a change made last year has eased one of the most common complaints from both payers and those receiving it.
Child support collected by IRD is passed on directly to sole parents on a benefit now instead of being used by the tax department to offset that benefit.
“Overall, the child support system is not too bad,” Fletcher says. “The basic approach I think is sound: ‘If you can sort things out privately that’s great… we the state are there as a back up with a formula that’s not too bad, to make it work.’ I think it’s a pretty good system, but, it doesn’t work if it’s not enforced. That’s absolutely fundamental.”
Fletcher says the system of welfare and child support is incredibly complex, but that’s the case all over the world. And IRD has an online calculator that should help people to work out what they’re entitled to.
Also today The Detail talks to Tania Domett from Project Gender, who was one of the authors of a huge piece of research that came out last year on the experiences of single mothers.
She says the system seems variable and ad hoc, and women told researchers time and time again that it was difficult to work out what they were entitled to.
“They’d be told different things by WINZ, by IRD, by a range of players in the system,” she says.
“To be honest some women think, ‘flag it, it’s too difficult. Actually I’m too tired, too exhausted to go through all the bureaucratic hoops for what sometimes tends to be not a great deal of money’.”
Domett says often the whole experience is used as a way to further punish the other partner.
Some women are owed huge amounts of money – one woman told Domett she was owed $30,000 and she didn’t expect to see a cent of it.
“And in all of this… it’s children who are absolutely the worse off… and it makes me wild.”
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