In administering social policy payments, IR aims to distribute money efficiently and effectively to help give people and families choices and certainty about their incomes and retirement.
With our focus in the past few years on digitising services and using more timely data, IR has streamlined delivery across all social policy products. We continue to work on further simplifying things and assisting customers who have more complex situations.
This year, economic circumstances have impacted some customers so we’ve prioritised ensuring that families know about and take up payments, minimising overpayments that lead to debt and preparing for the new FamilyBoost scheme.
Our social policy products for families
Paid parental leave
$642 million in payments went to more than 54,000 new parents this year.
97% of parents applied online and 99.9% of initial payments went into customers’ bank accounts on the first payday after their agreed date of entitlement.
Working for Familes Tax Credits
You can read about Working for Families in this section, and in more detail in our performance and financial sections.
Outcome 2 – People receive payments they are entitled to, enabling them to participate in society
Schedule of Non-departmental Expenditure
Note 4 - Receivables - child support
Child Support Scheme
We talk about child support on these pages.
The customers at the centre of child support
Financial information about the scheme is available here.
Note 4 - Receivables - child support
FamilyBoost
Find out more about FamilyBoost at the end of this section, about its implementation on page 36 to 37 and about the Budget 2024 here
Outcomes of the transformation programme
Working for Families
Approximately 336,000 customers rely on Working for Families Tax Credits as a significant part of their income. It has been a regular payment throughout the year for two-thirds of these customers, with other families opting to receive a lump-sum payment at the year’s end.
We strive to minimise the likelihood of customers getting overpaid, especially the most vulnerable customers who receive the minimum family tax credit, which is a weekly income top-up for those earning under $35,204 (as at April 2024). We have helped them to understand their obligations for income estimation at the beginning of the year and monitored their income during the year.
Another 80,000 customers were contacted because their income estimates for the year ahead looked too low, putting them at risk of overpayment.
Of the customers who received regular payments, two-thirds were paid within 20% of what they should have received for the year (a provisional figure at 30 June 2024), about the same as in 2022–23. Any underpayment is paid out at the end of the year.
However, changes to incomes and to family circumstances affect customers and our ability to accurately estimate their annual income and payments during the year. Overall Working for Families debt continues to rise, from $245.6 million at 30 June 2022–23 to $273.5 million, an increase of 11.3%. The number of customers in debt has not grown much, although the average debt owed at 30 June was 9% higher.
This year saw a drive to improve the guidance and support that our teams use when working with families in debt, giving them a better overview to explain our decision making to customers when there’s not a one-size-fits-all approach.
As at 30 June, active steps had been taken with 37% of customers in debt, such as instalment arrangements, write-offs or legal action. This covered 20% of overdue Working for Families debt.
Working for Families customers
22% of customers earned under $42,700, which is the income point at which payments start to reduce.
56,800 customers had a debt at 30 June 2024
- 2023: 55,700 customers
$273.5M in overdue debt as at 30 June 2024.
- 2023: $245.6M
- 2022: $250.8M
19,600 hardship write-offs had been made as at 30 June 2024
Seeing the bigger picture
As we noted in last year’s Annual Report, IR has been considering the future of Working for Families. We have focused on potential areas for improvement, including providing more accessible, timely ways to support customers and addressing the debt that families can sometimes get into. We continue to consider long-term aspirational objectives, nearer-term options and how to improve customer experiences through administrative improvements. Next steps include feasibility design while engaging with other agencies.
Operationally, IR has done more to ensure we’re seeing the bigger picture for customers and the impacts of payments on their lives. We continued to broaden our people’s delegations and moved decision-making as close to the customer as possible so that more queries can be resolved promptly and our services are consistent.
We still have work to do—families are among the least satisfied IR customers, which reflects the difficulty in getting payments right when their circumstances change and income forecasts made at the start of the year do not match. Two common reasons for calling us are about a Working for Families debt or compulsory child support deduction.
Customers may need to interact with multiple agencies so IR and the Ministry of Social Development Te Manatū Whakahiato Ora (MSD) have put together information that we can share with customers about all the government support available to them. The feedback from our families teams has been extremely positive. Becoming more efficient in our processes is making an impact too: IR contacts MSD around 24,500 times during the year for information that we need to administer Working for Families. Small changes at our end have resulted in the information we ask for from MSD being more accurate.
Better outcomes for child support customers
Improvements in the way that the Child Support Scheme is working have lifted the compliance of the parents who are required to pay it. 145,000 children are supported by the scheme, and more in-full and on-time payments are going to their carers.
Policy changes made in 2021 in conjunction with administrative efficiencies delivered by our business transformation programme are largely responsible. In 2021, we overhauled the child support penalty regime to better encourage ongoing compliance and introduced compulsory payments from liable parents’ salary and wage income. Employers made compulsory deductions from 81,000 parents’ earnings this year, which has contributed to 72.5% of payments being made on time.
Child support debt has fallen by 55% since June 2020, which is the lowest it has been in nearly 20 years. This year’s reduction includes $83.1 million in penalties that we wrote off to encourage liable parents to restart repayments. The reduction is also partly due to the introduction of revised penalty rates in October 2021 and IR ceasing to apply incremental penalty rates from April 2021.
Our child support teams have continued to encourage compliance by targeting older debt and resolving new debt quickly, with more people working on debt management and enforcement this year. As you can read in this story, this work can involve making complex decisions, having difficult conversations and pursuing enforcement internationally.
The customers at the centre of child support
Their efforts are reflected in a 9.5% reduction at 30 June 2024 in the number of parents with outstanding debt compared to the previous year, and the resolution of 83.7% of new debt cases involving New Zealand-based customers. We’ll keep working to improve compliance.
Last year, we reported on the implementation of the child support pass-on policy. This policy change meant child support for parents on a sole parent rate of benefit were able to receive it directly, instead of it being retained to help cover the costs of their benefits. We are seeing positive effects of this change in factors such as improved compliance, a reduction in customer numbers and increase in payments passed on.
In total, $413 million in child support went to all the carers of children this year compared to $294 million in 2022–23.
Child support customers
72.5% of child support assessments were paid on time.
- 2023: 70.85%
- 2022: 70.2%
- Target: 70%
83.7% of domestic liable parent debt cases were resolved within 12 months.
- 2023: 84.0%
- 2022: 80.0%
- Target: 75%
$1.01B overdue child support debt at 30 June 2024
- 2023: $1.10B
- 2022: $1.19B
65% of customers with a debt have a instalment arrangement in place.
Implementing FamilyBoost
FamilyBoost is the Government’s new payment to partially reimburse parents or caregivers for early childhood education (ECE) costs provided by licensed providers. From 1 July 2024, it will cover up to 25% of a household’s weekly childcare fees, or a maximum of $975 every 3 months.
We worked closely with MSD and the Ministry of Education Te Tāhuhu o te Mātauranga to implement FamilyBoost as they also administer financial support to the (ECE) sector. ECE providers are critical to the scheme so we have focused on the information needed in their invoices to enable households to claim the payments.
The scheme has been designed to ensure as many households as possible can claim this support, and that it is paid directly to families. We will monitor registrations and claims, having estimated that 100,000 families will be eligible.
To raise awareness about the new scheme, and other Budget 2024 changes to Working for Families, IR has run online campaigns, gone on mainstream and ethnic radio and advertised at family and recreation centres around New Zealand.
Any scheme has some kind of compliance burden on customers, so IR has taken on additional staff to support providers and customers and process payments efficiently.
You can read a case study about our design and delivery of FamilyBoost and more on other Budget 2024 changes here:
Outcomes of the transformation programme
Implementing Government priorities
Our other products
KiwiSaver
As at 30 June 2024, there were approximately 60,000 more savers than last year. We handled $10.4 billion in KiwiSaver member, employer and Government contributions and ensured 98.5% of funds reached scheme providers to invest within 3 days.
Over 2 weeks in July 2023, we processed 2.8 million claims for the Government Contribution to members' savings and paid out $990 million.
Student Loan Scheme
You can read about our collection of student loan repayments and financial performance here:
Our priorities for collecting overdue debt
IR also contributes to a separate annual report on the Student Loan Scheme, which is available at
Unclaimed monies
We processed 23,000 claims for unclaimed money this year, approved 4,300 of them and paid out $36.5 million in total.