Parents pushed to the limit

Waikato Times

Many parents believe they get the sharp end of our child support system and end up with a burden they struggle to sustain. Geoff Taylor reports.

Gunner Lovich keeps an eye on the clock. It's his day off and in an hour or so he's picking up his seven-year-old daughter Bryttany from Cambridge Primary School.

They'll spend the afternoon together and he'll get her dinner.

"She's ordered steak. I got her rump steak soaked in beer the other day. Now that's all she wants."

After dinner, Lovich, who works as a paramedic for St John Ambulance, will drop Bryttany back with his ex-wife Marie Sweetman. He's a shift worker and has an early start tomorrow.

Lovich, 54, from Leamington, is one of thousands of New Zealanders who each year join the ranks of ex-partners juggling children. Last year 10,100 divorces were granted by the Family Court in New Zealand, involving 8075 children.

In most of these cases the cost of bringing up these children - estimated at between $8000 to $10,000 annually - needs to be shared.

Often, as with Lovich and Sweetman, that method is the child support system administered by the Inland Revenue Department. As at June 30 IRD managed child support for 177,000 custodian parents for 280,500 children.

Most people know someone involved with child support. It's not a perfect system but it's a system many wouldn't be without.

Nevertheless, child support is something that just about everyone seems to have a story about.

For Lovich, the story's not been a particularly happy one lately.

He and Sweetman split up nearly four years ago without a lot of communication and Lovich found himself with a letter from IRD saying he was paying child support.

When couples split they can enter into voluntary payment agreements, unless the custodial parent is a beneficiary, or they can go through IRD's system. IRD uses a formula which multiplies a proportion of a paying parent's income by the number of children involved. The custodian parent's income doesn't affect the entitlement. Child support is paid until a child turns 19 or stops living at home, starts work full-time or receives a benefit or lives with a partner.

Lovich says he was initially paying $142 a week but a mixture of changes in income and yearly increments has seen that rise steadily and he is now paying $177 a week. He feels that is too much.

He earns about $65,000 a year and says he has a $352-a-week mortgage. This leaves him with about $250 for all other bills. Further straining the budget is the fact his new wife Annette is a student who is also paying child support of $60 a month to her ex-husband.

He says he had to cancel his life insurance because he can't afford it and puts off going to the doctor. They don't go out to the movies and he drives an old car.

"We don't live extravagantly. On a Friday night when I'm not working we go to the Cossie Club for a couple of beers because it's cheap."

Bryttany is a precious little girl for Lovich and Sweetman. When she was two she was diagnosed with leukemia. The couple went through terrible ordeals with her although she is now in good shape.

"She is my flesh and blood and I love her dearly," says Lovich.

"I do, however, have to question why it takes $177 a week to feed and clothe her."

Shouldn't Lovich accept that child support is a fact of life? That it's never going to be easy?

"I accept that but you should be able to live life without struggling to this extent.

"I'm sure there are a hell of a lot of other people out there in the same boat."

Lovich says sometimes he has been working up to 72 or 76 hours a week so the couple can live comfortably.

"This then increases my income for the year which, in turn, means I will have to pay more child support the next financial year. It's a no-win situation."

He believes the child support payment should be based only on one's basic gross income.

"Most people work overtime for a reason, to get a bit of cash in your pocket to save, but you can't do that in this situation."

He believes he is paying more than his share - possibly to make up for others who don't.

"I just totally believe it's theft from the Government. It's a cash cow and the Government doesn't want to lose it."

It's a claim IRD denies, saying money taken from paying parents is passed directly on to custodian parents.

If a custodian parent is on a benefit, the money taken from the paying parent is used to refund the Government.

IRD assistance manager families Bruce Findlay says of the $173.6 million collected by IRD in the year to June 30, $173 million was passed directly to custodian parents. The penalties IRD charges parents who are late payers go to the Government.

Sweetman is sympathetic to Lovich. She is on a benefit and studying and says she doesn't have a lot of money to come and go on either. Because she is on a benefit the pair can't opt out of the IRD child support system and set up their own arrangement. But she doesn't like seeing Lovich struggle.

Lovich isn't the only one who feels hard done by. Most people know of someone with a hard luck story involving child support. Given friction between ex-partners, it's a sensitive issue and people are reluctant to speak openly.

The Times spoke to one Hamilton woman with two children who says despite appearing to be well off, her husband is paying her only $60 a month. He runs his own business and doesn't appear to make enough income to warrant higher payments. Understandably she is angry and bitter.

People using tax deductible expenses, such as telephone, car expenses and depreciation to reduce taxable income from which child support is calculated, is a common issue which Raewyn Sporle, of Hamilton, comes across in her role as a specialist child support barrister and solicitor.

Self-employed people are able to reduce their liability by setting up trusts or claiming tax deductions. As a result, a person's taxable income is often very different from their real income.

Sporle says since 1993 IRD has offered administrative reviews which give people a free means of having child support, as assessed by IRD, reviewed.

Findlay says since last September the Commissioner of IRD has also been able to review a parent's liability if it appears that they have a greater capacity to pay than their taxable income indicates.

He says ultimately IRD has the power to force payment including sale of assets and property.

There is also the perennial problem of people simply not paying their share.

IRD figures released last year showed at June 30 there were 123,134 parents with a child support debt. More than $1 billion was owed in child support. Of that, 30 per cent of parents owed less than $500, 10 per cent owed $500 to $1000, 40 per cent owed between $1000 and $10,000 and 20 per cent owed more than $10,000.

IRD says it's not doing too badly. Findlay says since taking over the child support scheme in 1992 when the Child Support Act came into force, the department has collected more than 88 per cent of the money assessed as owing.

Sporle says another common problem she encounters with child support issues occurs when a couple split up and then hammer out an agreement voluntarily with a lawyer. Subsequently one of the partners objects and instead asks IRD to make a formal assessment which can initially overturn the previous agreement.

If parties are not happy with the IRD administrative review decision, they can take the matter to the Family Court.

As a barrister and solicitor specialising in child support, Sporle is a rare species. She handles cases all over New Zealand and from other countries. She won't be drawn into who New Zealand's child support system suits best - the custodian or the paying parent. Men or women.

She says it works both ways, and what people often forget is that the system is all about the obligation of both parents to financially look after their children. She says sometimes children are used as pawns and she's seen it all: money squabbles leading to a parent refusing to take a child to the doctor or pay netball fees, even parents refusing to bring a child's clothes or toys to the other's house.

Some of the issues raised with the Times relate to the way IRD administers the child support system. One accusation is inflexibility.

Early last year Lovich decided to try to have his situation looked at through an administrative review.

Sweetman joined him in applying to have his contribution reduced by getting the status of shared carer, a situation where both people care for a child almost equally. This means a paying parent has a child stay for 40 per cent of the time (146 nights a year) or contributes more through other means. Lovich and Sweetman made a joint case to a hearing in April last year. They said because of Lovich's shift work he was unable to have her as many nights as they would like, but in addition to two or three nights Bryttany has evening meals with him at least four times a week. Although technically Lovich fell six nights short of the requirement, they hoped his other time with Bryttany would be taken into account.

Sweetman says when they got a letter turning him down they were both gutted.

"We are both sitting in there amicably with a solution for both parties and still they don't approve it. You wonder what it's going to take. I just couldn't believe it."

Findlay says he can't comment on specific cases. He indicates that the other option open to Lovich is through court action. It's an expense Lovich doesn't want.

He feels hamstrung and nods at his brick wall above his fireplace.

"It's like that, eh - bang, bang, bang against a brick wall. All because I'm a shift worker and don't fit into their square box."

Lovich has no time for IRD.

"I have not been able to speak to the person who has signed letters to me from the department. Every time I call I get someone different. I think they are a pack of bastards."

A Hamilton man who asked not to be named and whose marriage ended in late 2005 says he and his ex-wife agreed he would pay $400 a week for his three children. Unknown to him, his ex-wife then brought in IRD who contacted him to tell him he was beginning formal payments through them. Because IRD backdated charges to the start of the month, he was charged for a fortnight despite the fact he had paid his ex-wife $800.

He approached IRD and was told it was beyond their control and if he was unhappy he could ask for an administrative review. He did so and assumed it was an open-and-shut case.

He made a written submission to the hearing but subsequently discovered that further information he was invited to supply was not considered because the hearing had gone ahead without his knowledge. He was stunned when the review then ruled against him.

"I couldn't believe it. The judgment brought in matters outside of the event we were talking about. And then they just got it palpably wrong."

His ex-wife paid him back $200 but he was still $600 out of pocket.

IRD decided he would pay nearly $1000 a month for three children on a shared care basis but then one Saturday morning he was rung by IRD to say the amount was about to rise. He was asked to attend a meeting.

"I spent a week preparing and then when I turned up for the meeting they told me it had been thrown out anyway. It was a complete and utter waste of time."

Findlay says IRD takes child support very seriously and says it has set up call centre numbers to improve communication.

Hamilton sales representative Paula Stokes urges people to remember why child support exists. "It's there for the children."

Stokes, 37, who was married for 9 1/2 years and has two children, split up from her husband nearly three years ago.

She says people need to realise that when their marriage breaks up, they will not be able to live as they did before.

"All of a sudden your assets and equity is divvied up. Suddenly you have got to manage on one income instead of two. People often expect to have the same lifestyle and it just doesn't work.

"When you are a parent, you are a parent for life. There are consequences for every decision and a lot of people don't like those consequences."

The two adults often have to basically start again financially. Stokes is doing just that. She says she'd prefer to live in a suburb like St Andrews but she bought a modest house in Nawton. She doesn't have much money but she always puts the children first, getting them involved in relatively inexpensive activities such as soccer, mountain biking and youth groups. She has a very quiet social life.

Stokes says when her marriage broke up, some people advised her to go on the domestic purposes benefit but she felt it was important for her to keep working.

Originally she and her ex-husband had a voluntary arrangement but ended up going through IRD. She says the hardest time for her was over Christmas 2005 when she waited for her first child support payments. It took two months for the first payment to come through and she used her savings to survive over the holiday period.

Stokes says she gets about $147 a week from her ex-husband and has few complaints. She senses a lot of prejudice about women receiving money from ex-husbands and says friends offering advice can feed bad feeling. She refers to comments like "she's just ripping you off" or "make sure you tie up your assets" or "don't let her touch your business".

"It becomes something between the two people as opposed to getting the best for the children."

Is child support a good idea or would she recommend couples try to enter into a voluntary agreement?

"If you can work with your ex and have good communication and good understanding of each other's situations, a private agreement could work within certain guidelines. But how many people can do that?"

Stokes acknowledges the child support system isn't perfect but for a lot of people it is very valuable. "There's so much good stuff about child support. Not all people rip the system off. It's done a lot of good. It can take a lot of the stress away from couples that are separating."