The Government has been forced to delay the biggest overhaul of child support in more than 20 years over fears of another Novopay-style debacle in the making.
Revenue Minister Todd McClay announced today the first of the reforms in the Child Support Scheme Amendment Act would be delayed a year because of the "complexity of the reforms".
"Inland Revenue has informed me... it needs more time to implement the new scheme to the high standard that the Government expects."
It is the second time the changes have been delayed - the Social Services Select committee held back the changes so IRD would have time to adjust its systems.
The changes affect 210,000 children. They include a new formula for calculating child support payments to include both parents' income, and changes to payment, penalties and debt write-off.
Sixty percent of debt from unpaid child support totalling $2.6 billion is from overdue penalty payments.
The legislation was passed in April and then-Revenue Minister Peter Dunne said it would bring child support up to date and would be fairer for children and families involved in the scheme.
McClay said he had sought assurances from IRD that the changes agreed by Parliament could be implemented as proposed.
"As a result of the complexity of the new legislation and my desire to give absolute certainty to mums and dads I have decided that the responsible course of action would be to postpone the implementation of these changes by 12 months. I'm keen to ensure that parents and children who rely upon New Zealand's child support system can have certainty
"For this reason I am not willing to implement these changes until I am assured they can be made smoothly and that parents will not be adversely affected."
The new start date would be April 1, 2015 and remaining changes would come into effect from April 1, 2016.
The Government has spent much of 2013 trying to tidy up the Novopay fiasco after the button was pushed on a change to the system for paying school staff, despite known problems.
Thousands of teachers were affected including many who went months without pay and others who were overpaid or underpaid.
- Fairfax Media
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