Community-Wise - 2006
Community-Wise Issue October 2006
- Paid parental leave extended to self-employed parents
- Paid parental leave maximum payment rate increase
- Parents information pilot
- 'Nominated persons' for child support
- Questions and answers about child support assessments
- Legislation will provide incentive to pay off child support debt
- Family assistance - When family circumstances change
- Personal tax summaries and refunds
- Interest free student loan
- Are we square?
- Student loan website redesign
- Overseas tax exemption introduced
- Contacting our liaison officers
- Key dates and events
Paid parental leave extended to self-employed parents
Self-employed people are now able to apply for paid parental leave.
The Department of Labour says the leave has been extended to help self-employed parents having babies, and those planning to adopt children under the age of six.
Paid parental leave has been available to employees since 2002. It was extended to self-employed parents in government legislation passed into law in May 2006.
Application forms are available from the Department of Labour. Payments began after the law came into force on 1 July 2006.
Fourteen weeks paid parental leave will be available for self-employed parents who have been working an average of 10 hours a week or more during either a six or 12 month period immediately before the expected date of birth, similar to the eligibility criteria for employees. Self-employed parents will have the same right as employees to transfer this leave to their eligible spouses or partners.
Fourteen weeks paid parental leave is available for self-employed parents who have been working an average of 10 hours a week or more during either a six or 12 month period immediately before they assume care of a child they intend to adopt.
Paid parental leave payments will equal the self-employed parent’s average weekly earnings over the last six or 12 months, up to a current maximum of $372.12 a week before tax.
Those who make a loss or earn less than the minimum wage for at least 10 hours work a week will be paid for 10 hours a week at the highest rate of minimum wage. Currently this payment would be $102.50 a week before tax.
Self-employed parents who choose to take up paid parental leave will have to stop working while they receive payments. However, they will be able to continue to oversee their business to a degree. This means they will be able to complete occasional administrative tasks, for instance completing GST returns.
To date, more than 77,500 employees have taken up paid parental leave. The Department of Labour expects about 2000 self-employed parents a year to take advantage of paid parental leave.
Paid parental leave for self-employed mothers having a baby:
Paid parental leave is now available to self-employed mothers who:
- have a baby due or born on or after 1 July 2006, and
- have been working an average of 10 hours or more a week for the six or 12 months immediately before the expected date of birth.
Self-employed mothers can transfer all or part of their payment to eligible spouses or partners (who can be either employed or self-employed).
Paid parental leave for self-employed parents adopting a child:
Paid parental leave is available to a self-employed parent (male or female) who:
- starts caring for a child under the age of six on or after 1 July 2006 who they intend to adopt, and
- has been working an average of 10 hours a week or more for the six or 12 months immediately before they start caring for the child.
Employees
Paid parental leave has been available to eligible employees since 2002. The eligibility criteria and entitlements are similar to those for selfemployed parents. Contact the Department of Labour for further information [contact details below].
How to apply
Application forms are available from the Department of Labour website or Workplace Contact Centre [contact details below].Once completed by applicants, the forms must be submitted to Inland Revenue.
A self-employed parent who decides to take parental leave can apply any time, right up until they return to work or cease self-employment.
For more information
To find out if you are eligible, calculate your entitlement or get other information, visit the Department of Labour website or call the Department of Labour Workplace Contact Centre on 0800 20 90 20 from 8.30 am to 5 pm Monday to Friday.
Paid parental leave maximum payment rate increase
Paid parental leave is a government-funded entitlement paid to eligible working mothers and adoptive parents when they take parental leave from their job(s) to care for their newborn or adopted child (under the age of six). These payments go towards the loss of income that working mothers and adoptive parents experience when they take parental leave from work to care for a new baby or adopted child.
The maximum paid parental leave payment has increased from $357.30 per week (before tax), to $372.12 per week, as of 1 July 2006. This means an eligible mother or adoptive parent can claim 100% of their normal weekly or average weekly pay (before tax) up to a maximum of $372.12 per week (before tax). Paid parental leave is paid for up to 14 weeks.
For information about paid parental leave, eligibility and how to apply please visit the Department of Labour website or call the Department of Labour on 0800 20 90 20.
Parents information pilot
Child Support is producing a package of resources to provide practical parenting information to separated parents. We are piloting the distribution of this information to customers new to Child Support.
The overall purpose of the project is to help parents comply with their child support obligations.
We will provide new customers with information about parenting when separated. The information focuses on helping them to see the value in improving their relationship with the other parent and in putting the interests of their children first. Research and customer testing we have carried out in the last few years has strongly indicated that:
- Paying parents who feel and can actually see their children benefit from their child support payments influences how willing they are to pay.
- Mutual respect around parenting, leading to a "working" relationship with the other parent, also influences how willing paying parents are to actually pay, or for custodians to facilitate contact between the children and the paying parent.
- Parents are keen to have practical tips and tools to help them improve their communication with their ex partners and children.
The package includes an interactive CD ROM, which also contains a "video" produced by the Ministry of Justice called Putting your children first. The Ministry of Justice 40 page booklet that supports the video is also included.
The CD has been adapted with permission from the Australian Child Support Agency. It contains practical tips and hints set out in five main areas:
- Working with the other parent - tips for how to build a "business-like" relationship with the other parent.
- What about me? - looking after yourself following a separation (physical, emotional, and mental health and wellbeing).
- Me and my money - financial management in a time of stress and change of circumstances.
- Me and my kids - how parents can build on their relationship with their children when parenting alone or from a distance.
- New relationships - how to integrate new relationships or families with your existing family.
We have also ensured there has been plenty of information added to the CD on:
- child support, including how assessments are made.
- budgeting services provided by the Federation of Family Budgeting Services, to help with the financial aspects of sole parenting or a breakup.
- the availability of Ministry of Justice - funded practical parenting programmes. These focus on how to help children when parents separate.
We have worked closely with the Federation of Family Budgeting Services, the Ministry of Justice, and with Relationship Services to produce our resources. Work and Income and the Families Commission also supported this initiative.
The provision of information in this topic area is new for Child Support. Customers have told us, though, that as Child Support can be one of the first agencies to enter a parent's post-separation life, it is appropriate for us to provide this material.
The pilot will be fully evaluated to gauge customers' reaction to the material and its effect on key measures. Below is an interactive screen from the CD:
'Nominated persons' for child support
Confidentiality and privacy are two values that are very important to Inland Revenue.
Our Charter, which sets out how we will work with the public, has a section specifically focused on confidentiality and privacy. It says:
"We respect your privacy and treat all information about you as private and confidential. Information you provide will be kept secure and will be used or disclosed only as required by law."
This means that we are very careful to identify a customer before discussing with them their child support or other matters administered by Inland Revenue. By law, we are not able to give information about a customer to another person.
However, sometimes it is more convenient for a customer to have someone else deal with us on their behalf. In these cases, we ask that the customer authorise in writing a "nominated person". For child support this person can then make enquires and receive information on the customer's behalf. But unless the nominated person also holds power of attorney or is a property or welfare guardian under the Protection of Personal and Property Rights Act 1988 (which usually requires the services of a solicitor), they can't:
- sign forms on the customer's behalf or
- enter into arrangements for the customer (such as a debt repayment arrangement).
We can accept a nominated person authorisation in any of the following ways:
- a letter setting out details about the authorisation as long as it states that it covers child support matters specifically
- the Elect someone to make child support enquiries on your behalf (IR146) form
- the Child support registration form (IR103) or the form for MPs' electorate secretaries in the Contacting Inland Revenue (IR999) booklet.
Child Support is not able to accept authorisation over the telephone, or through Inland Revenue's other nominated person forms as there are rules for nominated persons that relate only to child support matters.
Questions and answers about child support assessments
What is an "assessment" and how is it worked out?
Child support is a payment made by parents who live apart from their children to help financially support their children. It is not a government grant or benefit, but Inland Revenue Child Support collects the money from the parent making the payments, and passes it to the person with the care of the children (or to the government, if the custodian receives a sole parent benefit like the DPB).
To work out how much the paying parent should pay, there is a standard formula.
This is how the formula works:
- We work out the paying parent's annual taxable income.
- We then take away an amount for the paying parent's "living allowance". How many people live with the paying parent and that they help to support (like a partner or other children) affects the amount of the living allowance.
- We then multiply the result by a percentage based on the number of children the paying parent pays child support for. This gives us the annual amount to be paid.
The family situation and income of the custodian is not taken into account.
When we work out the amount to be paid, we send the paying parent a notice of assessment. It shows how much the paying parent will need to pay each month. It also shows how the amount was worked out using the formula.
To find out how the formula works using your own income and circumstances, you can use the Child support liability calculator on this website.
Can paying parents just pay what they like instead?
If a custodian has applied for child support through Child Support, we must use the formula to work out how much they should pay. This means that parents with similar incomes and personal circumstances will pay a similar amount.
If paying parents do not pay the amount they have been assessed to pay, or pay late, they will get a debt. We are required to charge penalties on child support debt. The best way to avoid a debt is to pay the full amount due on time.
Administrative reviews
Some paying parents may be able to alter the amount they pay through an administrative review, but this can only happen where there are special circumstances under ten "grounds" for review. To find out more about administrative reviews, see the Paying parents section. Or you can access our booklet Helping you to understand administrative reviews (IR175).
Voluntary agreements
An alternative option for parents is to make a "voluntary agreement" and register it with us. This is where parents have agreed between themselves on the amount to be paid, and they can then register it with us to collect and pass on the money. If the custodian receives a sole parent benefit, the agreed amount must be the same as or more than the amount the paying parent would need to pay using the formula assessment. Any amount paid above the formula will be passed on to the custodian.
Private arrangements
Many parents do not have to work through us at all and can come to their own arrangements for the financial support of their children. The only parents who must apply through Child Support are custodians who receive a sole parent benefit.
Legislation will provide incentive to pay off child support debt
The Child Support Amendment Act 2006 has now been passed.
The Act is not a total re-write of the child support legislation. It contains a number of provisions aimed at improving compliance and helping customers who have a child support debt to pay it off more easily.
The major change is the introduction of an incentive for paying parents who have stopped paying child support to start making regular payments again. If they make an agreement with us to make payments, and keep to the agreement, some of the late payment penalties they owe will be written off. However, they will still have to pay all the non-penalty child support they owe.
Another change introduced in the legislation provides Inland Revenue with the ability to be able to initiate reviews of paying parents' financial affairs when their assessed income does not match their real ability to pay.
Other changes include:
- An exemption from paying child support for victims of sex offences, on the grounds that they should not be further victimised by having to pay child support for children conceived as a result of the crime.
- A temporary exemption for paying parents under the age of 16 who do not have sufficient income to meet even the minimum payment level. The exemption is for a limited period while the paying parent may not be earning income and is still in the compulsory education system.
- The order in which payments are allocated is to be changed. Money owed for periods when a custodian was not on a benefit (and therefore entitled to receive the payment) will take precedence over periods when the custodian was on a benefit (when the money is paid to the Crown rather than to the custodian).
Inland Revenue has taken up the administration of this legislation. As part of this we intend to contacting paying parents who already have a arrangement to pay off their debt to inform them that they will get a partial write off if they keep to their arrangement for six months. Paying parents without an arrangement in place will be encouraged to contact us to work out their arrangement so they can look towards qualifying for a penalty write-off.
Family assistance - when family circumstances change
Why we need to know about a change in family circumstances
A customer's family assistance entitlement is based on their family circumstances. Sometimes these family circumstances change after a customer has registered for family assistance. We need to know about changes in family circumstance so we can make sure customers get paid the right amount of family assistance, and don't miss out on payments that they're entitled to or have to repay any at the end of the year.
Family circumstance changes we need to know about
Family and parenting arrangements - for example, changing from a one-parent family to a two-parent family (or the other way around), through marriage, a civil union, or a de facto relationship.
The number of children that a customer can claim for - this includes a child leaving school to start work or receive income such as a benefit or student allowance, a child leaving the family, a change in a shared care arrangement, or a new child in the family.
Family income - this includes a change in employment status, the number of hours worked, the type of income received, an increase or decrease in estimated family income, or going onto a benefit, ACC, a student allowance, NZ Super or a veteran's pension. These include changes for either a customer or a customer's spouse or partner.
Contact us
To tell us about a change in family circumstances, customers need to call us on 0800 227 773.
Customers need to contact us as soon as possible when they have a change in their family circumstances. We will then update their details and make sure they get paid the right amount of family assistance. Our hours are 8am - 8pm weekdays and 9am - 1pm Saturdays.
Personal tax summaries and refunds
A personal tax summary (PTS) is an income statement that shows all an individual's income details and tax deductions for the year (sent to us by their employer). It's only for those who receive salary or wages, a benefit or pension, interest, dividends or taxable Maori authority distributions. We use this information to compare the tax actually paid with the tax a customer should have paid for the year (1 April to 31 March). In some cases this results in a refund.
From the beginning of July customers can request a PTS to see if they are entitled to a refund. Possible reasons why someone may receive a refund include:
- not working for the full year
- using a secondary tax code (S) and earning under $38,000
- being entitled to a child rebate or earning under $9,880
- earning under $38,000 and received dividends
- holding more than one job during the year
- having expenses to claim, such as:
- commission on interest or dividend income (but not bank fees as they are private expenses)
- interest on money borrowed to buy shares or to invest - as long as the investment will produce taxable income
- premiums for loss of earnings insurance, provided the benefit from the insurance policy is taxable.
Customers can Request a personal tax summary on this site, or by calling INFOexpress, our automated phone service, on 0800 257 444.
Alternatively, they can use the Personal tax summary calculator as an easy way to check entitlements to a refund before requesting a PTS. They'll need their income information for the year, which they can get by calling 0800 257 778 and requesting a summary of earnings.
Interest free student loan
Any student loan borrowers who have been in New Zealand for 183 consecutive days or more will be eligible for an interest free student loan.
The interest charged from 1 April 2006 will still show on statements, but will automatically be written off after 31st March 2007. Only the interest charged from 1 April 2006 will be written off (unless you are eligible for other interest write-offs).
You don't have to do anything to receive the writeoff, no phone calls, forms or letters are needed, we'll do it all for you.
Confirmation of the write-off will be sent out after April 2007.
Overseas exemptions
You may still be eligible for an exemption if you haven't met the 183 day requirement because you have been overseas for one of the following reasons:
- An unexpected delay in returning to New Zealand.
- An unplanned absence.
- You were studying full time at a post graduate level overseas.
- You are working overseas for the New Zealand Government.
- An absence due to employment or occupation.
- You were accompanying a spouse or partner overseas because they're studying, working overseas for the NZ Government, working overseas for a New Zealand employer or working as a volunteer.
For more details visit the Student loans section or call 0800 377 778.
Are we square?
Most of us pay the right amount of tax already, but some of us need an end of year tax square up. If you're a salary or wage earner you may get a tax refund if you:
- had more than one job during the year.
- didn't work a full income year.
- are able to claim one of the two low income rebates. These are the child rebate or the rebate for those who received income less than $9,880.
- received income less than $38,000 and received dividends from a company.
- are able to deduct expenses from your income.
If any of these applied to you between 1 April 2005 and 31 March 2006 there's an easy way to check whether you may receive a refund, before you ask for a personal tax summary. Use our Personal tax summary calculator, or call our automated telephone service INFOexpress on 0800 257 773 and request a personal tax worksheet. Remember to have your IRD number handy.
Student loan website redesign
The student loans area of our website has been redesigned to allow student loan borrowers to manage their loans and repayments more effectively.
Some of the key features and improvements are:
- simplified structure
- key links to popular topics on the home page
- easier navigation to find information needed at the right time
- clearer information, designed to give a complete picture of repaying a student loan.
Student loan borrowers will be able to find all the information they need, including up-to-date information about interest free student loans and the student loan amnesty for borrowers overseas. We welcome your feedback or comments.
Overseas tax exemption introduced
From 1 April 2006 new migrants and returning New Zealanders will have most types of their individual overseas income temporarily exempt from tax in New Zealand.
The changes have come out of the 2001 Tax Review and are part of a government move to encourage people to migrate to New Zealand or return after working and living overseas.
"Previously people coming to New Zealand to live may have faced extra tax costs," says Debbie Beaumont, Design Advisor, Operational Strategy and Design. "If they negotiated a higher remuneration to compensate for the extra taxes these costs were often passed on to the New Zealand businesses who recruited them or used their services.
"With the changes, new migrants and returning New Zealanders (who have not been tax resident in New Zealand for at least ten years prior to arrival in New Zealand) will automatically be exempt from tax on all foreign income except employment income (for employment performed during the period of exemption) and business income relating to services.
"For example, under the previous law if you worked overseas and had shares in a foreign company, when you returned to New Zealand your shares would be treated as a foreign investment fund. You would have to pay New Zealand tax on the value of the shares as it accrued. The new exemption will mean that you won't have to pay any New Zealand tax in relation to the investment."
Examples of foreign income that will be subject to the exemption are dividends, interest, royalties and rental income. The exemption will be available to people only once.
Contacting our liaison officers
If you would like to speak to one of our Community Liaison Officers or Social Policy Liaison Officers or if you would like them to come and talk with you (or your group), call us and ask for the CLO/SPLO in your area.
| Location | SPLOs 0800 227 773 |
CLOs 0800 221 221 |
|---|---|---|
| Whangarei | Luana Poata | Felicia Heape |
| Takapuna | Shannon Brady Tangi Folau Nicola Sharp |
Joseph Manu |
| Manukau | Kevin Mascarenhas Helen Lisiua |
Paul Tuisaula |
| Hamilton | Angela Grieg Moana Aperehama Fabienne Scintu |
Chris Novak |
| Tauranga | Lorraine Morten | Karen Burton |
| Gisborne | Kylie Low | Danny Fong |
| Napier | Nerissa Taurima | Sonia Cooper |
| Rotorua | Anna Jones | Edward Nathan |
| New Plymouth | Jenny Charteris | Tracey Lord |
| Palmerston North | Philippa McNae | Steph Martin |
| Wellington | Kaisare Ierome Brian Woolford |
Tracey Taylor |
| Nelson | Margaret King | Kaye Latham |
| Greymouth | Juliette Henry | |
| Christchurch | Pip McArtney Heather Rush |
Katie Collins |
| Timaru | Geoff Mayo | |
| Dunedin | Vanessa MacDonald | Cindy Henry |
| Invercargill | Peter Murphy Val Smith |
Mark Bell |
Key dates and events
| Date | Event |
|---|---|
| August Personal tax season |
Taxpayers who have not already received a personal tax summary can now request one. |
| 30 September Student loans |
The second instalment of their non-resident assessment is due from borrowers living overseas. |
| October Student loans |
All student loan borrowers will receive their 6-monthly student loan statement and newsletter. |
| 7 November Student loans |
The second student loan installment is due. This applies to borrowers who earn over the threshold, who are self-employed or earn income with no student loan repayments included. It also applies to salary and wage earners who have a residual payment obligation of over $1000.00. |
| 7 November Provisional tax |
Second installment due date for provisional tax payers. |
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Date published: 09 Nov 2006
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