Output expense 3

Services to process obligations and entitlements

Description

This output expense provides services that contribute to the availability of revenue to fund government programmes, as well as ensuring that taxpayers and other customers receive payments they are entitled to, including tax refunds. This is achieved through services designed to achieve timely, efficient and effective assessment and processing of:

tax payments, rebates and refunds for taxpayers, and
entitlements for social support programmes.

Activities undertaken:

registering taxpayers
making tax assessments
banking tax payments and making refunds
processing applications and payments for social support programmes
supplying information to other government agencies
accounting and reporting the collection of Crown revenue
collecting ACC employee earners' levy as a component of PAYE deductions.

Financial performance for the year ended 30 June 2008 (GST-exclusive) $000
Revenue	Expenses	Net surplus/(deficit)
124,664	122,388	2,276

Output 3.1 Registrations, applications and assessments

Description

This output involves processing all registrations, applications and assessments for the tax and social policy programmes we administer.

Performance measures
	2006-07 Actual	2007-08 Target	2007-08 Actual
Timeliness
We will issue:
at least 80% of income tax assessments within 6 weeks of receipt, except during August and March when we will issue at least 80% within 7 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	86.7% (93.0%)	80%	89.7% (93.6%)
at least 100% of income tax assessments within 10 weeks of receipt, except during August and March when we will issue at least 100% within 11 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	91.7% (96.0%)	100%	94.6%^[12] (96.9%)
We will issue:
at least 95% of FBT and GST assessments and employer monthly schedules within 3 weeks of receipt, except during May when we will issue at least 95% within 4 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	-	95%	97.5% (96.5%)
at least 100% of FBT and GST assessments and employer monthly schedules within 6 weeks of receipt, except during May when we will issue at least 100% within 7 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	-	100%	99.1% (98.5%)
We will issue child support assessments to at least:
70% of paying parents within 2 weeks	73.2%	70%	77.6%
95% of paying parents within 6 weeks	88.9%	95%	92.0%
of receipt of the properly made application.

¹² This is a significant improvement from 91.7% in 2006-07. The result was impacted by the poor result in quarter two where performance dropped to 90%. Delays occurred due to having to wait for other documentation or validation to enable assessments to be completed.

Activity forecast
	Budget	Actual
Based on demand in prior years we expect to process an estimated 51,000 to 56,700 applications for child support.	51,000-56,700	55,400

Output 3.2 Child support administrative reviews

Description

This output involves providing an administrative process for reviewing child support assessments that is both inexpensive and readily available to custodians and paying parents.

Performance measures
	2006/08 Actual	2007-08 Target	2007-08 Actual
Timeliness
We will issue:
at least 90% of administrative review decisions within 7 weeks	89.3%	90%	96.7%
100% within 10 weeks	97.2%	100%	100%
of receipt of the application.

Activity forecast
	Budget	Actual
Based on demand in prior years we expect to complete an estimated 3,900 to 4,100 applications for administrative review of child support assessments.	3,900-4,100	3,762^[13]

¹³ Last year, cases on hand carried over into the new year resulted in demand appearing to have significantly exceeded forecast. Analysis of the variance was not completed until after forecasting for the current year was finished, resulting in a forecast based on distorted numbers. We have reduced the forecast for 2008-09.

Output 3.3 Payment, returns, collections and disbursements

Description

This output involves:

issuing rebates and refunds
distributing KiwiSaver contributions to scheme providers
disbursing child support payments to custodians and the Crown
receiving and banking payments (including child support payments from paying parents)
accounting and reporting the collection of Crown revenue.

Performance measures
	2006/08 Actual	2007-08 Target	2007-08 Actual
Quality
We will correctly process all notices, statements, certificates of entitlement and loan transfer letters.	-	100%	91.4%^[14]
We will correctly process all payments to accounts.	99.8%	100%	99.8%
We will collect at least 78% of child support assessments (excluding cases we manage on behalf of overseas agencies and uncollectable debt cases) for the year ending 31 March 2008.	77.2%	78%	76.0%
We will ensure that at least 70% of assessed paying parents (excluding cases we manage on behalf of overseas agencies and uncollectable debt cases) pay their whole liability by the due date.	64.8%	70%	66.3%^[15]
We will ensure that at least 20% of returns are filed electronically.	29.6%	20%	34.2%
Timeliness
We will process and issue:
at least 90% of rebate claim refunds within 3 weeks of receipt, except during May when we will process and issue at least 90% within 4 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets)	93.8% (98.2%)	90%	95.2% (98.2%)
100% of rebate claim refunds within 8 weeks of receipt, except during May when we will process and issue at least 100% within 9 weeks (the timeliness of electronic processing will be reported separately - as shown in brackets).	97.5% (99.3%)	100%	98.1% (99.3%)
We will issue 100% of paid parental leave payments to customers when they are entitled to receive them.	98.7%	100%	98.6%
We will bank 100% of payments on the day of receipt, except during the week of 7 April when we will bank 100% of payments within 2 working days of receipt.	99.0%	100%	99.4%
We will make at least 95% of identified child support payments received by the due date (20th of the month) to custodians on or before the 7th day of the following month.	97.5%	95%	97.4%
We will disburse the balance, and any previous payments received prior to the 7th day of the following month, by the 20th of that month.	98.5%	100%	98.4%

¹⁴ We improved our measurement methodology to include a more representative sample of our work. This result, while more accurate than in previous years, is also lower than expected. A continuous improvement project is now in place to improve work quality. For 2008-09 the sample for measuring this standard will be doubled to 480 to provide a more statistically valid group.

¹⁵ This result is a significant improvement from 64.8% in 2006-07. Delays in processing child support registrations during our peak period in February are the main reason this standard was not achieved. We have put in place a number of initiatives which we expect will improve performance next year.

Activity forecast
	Forecast	Actual
We expect to process an estimated:
7.32 to 8.09 million returns	7.32-8.09 million	8,095,345
7.51 to 8.30 million payments	7.51-8.30 million	8,000,654

Output 3.4 Supply of information to other agencies

Description

This output involves the supply of information to other government agencies, in line with the agreements between Inland Revenue and those agencies.

Performance measure
	Actual 2006-07	Actual 2007-08
We will ensure that all information provided to other agencies meets agreed standards.	Achieved	Achieved

Output 3.5 Collection of ACC levies

Description

This output involves collecting a levy that contributes to government funding for accident compensation schemes.

Performance measure
	Actual 2006-07	Actual 2007-08
We will pay ACC the determined amounts of earners' levy collected as a component of PAYE, within the agreed timeframes.	Achieved	Achieved

Output Statement: Services to process obligations and entitlements

for the year ended 30 June 2008
2006-07 Actual $000		2007-08 Actual $000	2007-08 Main Estimates $000	2007-08 Final voted $000
	Revenue
82,767	Crown	101,748	95,701	101,748
22,551	Other	22,916	23,203	23,247
105,318	Total revenue	124,664	118,904	124,995
	Expenses
104,752	Annual appropriations	122,388	118,904	124,995
-	Other appropriations	-	-	-
104,752	Total expenses	122,388	118,904	124,995
566	Net surplus/(deficit)	2,276	-	-