If your income drops by 15% or more compared to the income used for your assessment, you may be able to estimate your income for child support. This could reduce the amount you have to pay if you’re a liable parent. It could increase the amount you get if you’re a receiving carer.
When you can estimate
You can estimate your income for the current tax year if the following apply.
- Your child support has not ended, or it has ended but the month your last child support assessment is in has not ended.
- You expect your year to date income, plus estimated income to drop by at least a 15%
- Your annualised income for the rest of the year is lower than the income you’ve been assessed on.
- Your income or the payment amount has not been set by court order or administrative review.
If your income or child support payments have been set by court order or administrative review, you'll need to go back to court, or apply for a new review if there is a new matter, to change them.
When you estimate your income, there may be times when we'll need you to send us proof of your estimated income for example, you estimate includes income from self-employment or overseas income.
Estimations apply from the first of the month we receive them in, or the start of your liability if it has begun partway through the month.
If your income changes again
If your income goes up or down after you’ve estimated, you can re-estimate your income if you still meet the criteria.
If your income goes up after you estimated and you no longer meet the estimation criteria, you should cancel your estimation. Otherwise, you may end up with an amount to pay once your child support is squared up.
At the end of the year
After the end of the tax year, usually 31 March, we’ll square up your child support to see if you paid the right amount of child support.
When we square up your child support, we use the lesser of the following.
- The actual income you earned in the period you estimated.
- The income originally used to work out your child support.
If your income was higher than what you’d estimated, you may have an amount to pay
If your estimation includes overseas income, you'll need to send us proof of this income at the end of the New Zealand financial year (1 April to 31 March).
We originally used $53,700 to assess your child support. You estimate your income at $40,000 from the start of the child support year in April, until the end of the child support year in March. Your child support to pay will be based on this income for the full year.
You earned $40,563 for the full year, we will square up your estimation using this income for the full child support year.