Radhakrishnan Priyanca; Rurawhe AdrianCHILD SUPPORT AMENDMENT BILLThird ReadingHon PRIYANCA RADHAKRISHNAN (Minister for Youth) on behalf of the Minister of Revenue: I present a legislative statement on the Child Support Amendment Bill. SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website. Hon PRIYANCA RADHAKRISHNAN: I move That the Child Support Amendment Bill be now read a third time. The Child Support Act was introduced in 1991 and since then it's been progressively updated and adjusted over the years. The objective of child support is to ensure that children are appropriately supported by both their parents even when they're not living together as a family. The bill we are considering today aims to ensure that the child support system works as smoothly and efficiently as possible. The impetus for the change is the Government's simplification and modernisation of the tax and transfer system. Inland Revenue has been progressively moving its various functions over from the old technology platform to the new one and New Zealanders have been enjoying the benefits of greater efficiency and simplicity. This is very relevant to us here today because one of the beneficiaries of the Inland Revenue's Business Transformation programme is the set of social policies administered by Inland Revenue and that includes child support. Earlier stages of Business Transformation meant that interest and dividend information is now reported to Inland Revenue on a monthly basis. It is therefore easy for Inland Revenue to include these amounts as income. That enables one of the proposals in this bill to widen the definition of income" further to include interest and dividend income which would provide a fairer outcome for the children if considered as part of the child support calculation. The transformation programme also now means that Inland Revenue receives payday filing information from employers which allows near real-time information about people's circumstances during the year. Now Inland Revenue is receiving more timely and accurate information this can be used to more accurately calculate a person's tax and entitlements making sure they're getting the right entitlements and paying the right amount of tax during the year. This is relevant for child support because payday filing allows Inland Revenue to get more up-to-date employment information to enable child support deductions to be set up right from the start. Many people currently pay their child support obligations through deductions made by their employer. The Government wants to help newly liable parents to start off on the right foot. So this bill extends employer deductions of child support to all newly liable parents. The driving force behind this bill has been improvements to the administration of the scheme. It does this by making it more certain that children get the financial support they're entitled to by making the scheme easier for liable parents to meet their obligations. It therefore proposes a range of administrative measures which will help smooth the scheme and provide the necessary financial security for the children involved. I've touched on a couple of measures in this bill. I think that a quick recap of the other principal features of the bill would be beneficial. The penalties imposed by the scheme are intended to be an incentive for parents to comply but they can actually have the reverse effect if the penalties are too harsh. So this bill proposes a more pragmatic approach. The child support scheme imposes an initial late payment penalty a follow-up penalty soon after and then an incremental penalty. The policy objective is for parents to get back on track quickly and the best way to do that is for Inland Revenue to work with that parent to get them on track with the objective of preventing the second stage penalty being imposed. So we propose to shift that second stage of the initial late payment penalty to give Inland Revenue time to help the parent. As I mentioned before the Government wants to help newly liable parents start off on the right foot and the proposed child support deductions made by an employer will help achieve that. But for people who don't work for a salary such as self-employed people there is still the potential to fall behind on payments as so often happens currently. And if they do it's very difficult to get back on track. We're therefore proposing a grace period before penalties are charged for newly liable parents. Moving to another matter at the moment no time bar exists for the child support scheme. That means that when reassessing child support Inland Revenue could be required to go all the way back to the inception of the scheme in 1992. This is clearly inefficient and a waste of time and money not to mention a source of uncertainty for the parents. The bill therefore proposes introducing a time bar for child support reassessments as currently exists for income tax. A four-year time bar would provide certainty for parents and improve the efficiency and administration of the scheme. The bill also includes a number of technical amendments which would also contribute to a better more efficient child support scheme. These are the main features of the bill. The bill supports the Government's aspirations for our society. These changes will mean a better child support scheme which means better outcomes for children and young people. In bringing this bill to its third reading I would like to thank the Social Services and Community Committee for its consideration of the bill and their recommendations. I'd also like to thank the officials and drafters who worked on this bill. I'm pleased to recommend this bill to the House for its consideration. Thank you. DEPUTY SPEAKER: The question is that the motion be agreed to."