Compliance focus 2009-10: Community and business segments

Families

Our compliance approach

We administer a range of social support programmes intended to help families cover the costs of raising children.

We estimate that approximately three-quarters of families with dependent children receive working for families tax credits and nearly 75% of all new parents receive either paid parental leave or the parental tax credit. Approximately 90% of one-parent families are part of the child support scheme.

Increasing awareness of what is available is an essential part of making sure families get the support they are entitled to.

• Community relationship advisors provide education and information at workplace seminars and family and community expos.
• Our leaflet, Congratulations on your new baby, which includes information about parental tax credit, paid parental leave and working for families tax credits, is sent out to all new parents with the Department of Internal Affair’s new baby registration packs.
• We continue to use services like the Families Commission, Citizens Advice Bureaus and parenting groups to develop our understanding of what parents know about the social support they are entitled to.

Our online services, like "My family details and income", make it easy for customers to confirm or update their:

• spouse or partner details
• annual family income details
• children’s current details
• payment options
• bank account details.

People can use the working for families online calculator to work out whether they are eligible, find out what payment types are available and how much they might be able to receive, depending on their income and family circumstances.

Areas of focus

The most common compliance issues involve:

• some families receiving more social support than they are entitled to because of changes in circumstances, such as income changes or children joining or leaving the family during the year
• people deliberately trying to collect more than they are entitled to
• some people trying to avoid paying child support.

Under and overpayment of working for families tax credits (WFFTC)

Families can choose to receive their WFFTC payments weekly, fortnightly or as a lump sum at the end of the year.

Entitlements are based on a family’s annual income, the number and age of dependent children and the parents’ income sources. If a family chooses to receive payments weekly or fortnightly and their income decreases or increases during the year, or their family situation changes, they may find they have not received enough, or received too much. If they tell us about their change of circumstances we can make the necessary changes to their payments to minimise any over or under payment.

Incorrect payments in some cases may also be the result of deliberate fraud or avoidance activities.

What we will be doing

We want people to receive their correct entitlements when they need it and not have to worry about whether they will have to pay back money at the end of the year. To do this we will be:

• calling new recipients and people we know are more at risk of receiving an overpayment, especially those who are self-employed or have seasonal work. We will clarify the family’s income and family details and encourage an income re-estimate to reduce the risk of overpayment at the end of the year
• improving our online services for families (“My family details and income”) so recipients can view and update their personal details
• improving the information provided by the electronic information exchanges with the Ministry of Social Development to make sure the information we have about our working for families tax credit recipients is as accurate as possible
• collecting and analysing information to identify people involved in fraud and referring these for investigation. In some cases we will reassess the overpaid entitlement and impose shortfall penalties. Where the investigation finds that a family’s affairs have been deliberately structured to inflate their level of entitlement, we will consider prosecuting them.

Paid parental leave administration

Since 2002 we have worked with the Department of Labour to administer the paid parental leave scheme. Our part of the administration process involves paying parental leave payments and advising of debt resulting from overpayment.

What we will be doing

• We are enhancing our processes, including cross-checking paid parental leave applications, with information we have about a person’s income and employment to help avoid overpayment or payments to people who might not be eligible.

Parents who do not pay their child support

The child support scheme is designed to assess, collect and disburse payments from parents not living with their children to help financially support them.

Parents are typically more willing to pay their child support when they see their children benefiting from the payments. Parents who have a shared care arrangement usually pay their child support. We have found that in the first year of child support some parents who do not have their children living with them do not meet their obligations.

Since the child support scheme started in 1992 we have collect 88.4% of the $4 billion child support assessed.

One of the biggest issues we face in collecting child support payments is finding parents who move and do not contact us to update their details, including those who move overseas. If they stop paying and if we can not find them, they start to build up a debt with penalties they have to pay when we do find them.

What we will be doing

We will be:

• looking at new ways parents can pay their child support, including using credit cards over the phone
• providing people with information on their entitlements. Our community relationships advisors are available to give assistance. Our booklets are available at a number of family-oriented locations, such as the Ministry of Social Development, Family Courts, Relationship Services and Citizens Advice Bureaus
• using administrative reviews to take people’s individual circumstances into account, as far as the law allows, in calculating their liabilities or entitlements for child support
• looking at multi-lateral and reciprocal agreements with other countries to make it easier to collect child support payments from paying parents living overseas, and the other way round
• continuing our existing information exchange with Customs to identify liable parents with outstanding child support debt as they come into or leave New Zealand. This lets us contact them to make full payment of their debt or come to an acceptable arrangement to pay their debt.

 

Information exchange with the New Zealand Customs Service

Under a new information exchange with the New Zealand Customs Service (Customs) we receive reliable and timely information when parents, who have outstanding child support debt, travel in and out of New Zealand. Customs check names provided by us against arrival and departure information and when a match occurs, they automatically let us know. We use this information to contact the parent to help make arrangements to repay the debt. We can also legally stop parents with a child support debt from leaving the country. The information exchange began in September 2008. By the end of December 2008, information had been exchanged on 3,274 parents with a child support debt travelling in or out of the country. As a result, we have entered into 719 instalment arrangements for $9.8 million debt. We have also identified 343 parents who have child support debt and are living in Australia. Under our reciprocal agreement with Australia, we can pass these cases on to the Australian Child Support Agency.

 

 

Date published: 09 Jun 2009

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