Pension shock in store for defaulting parents

Press, 15 February 1989, Page 1

Pension shock in store for defaulting parents

DEBORAH McPHERSON

Parents who try to avoid payin welfare contributions for their children after a separation may find their debts deducted from their pensions on retirement. The Christchurch Social Welfare Department’s senior executive officer for revenue, Mr Barry Smart, said tabs were kept on liable parent contributions to the domestic purposes benefit. Those who did not pay up now would be confronted with their arrears when they eventually applied for the national superannuation, said Mr Smart. Liable parents are those required to be named as the “other parent’’ when a custodial parent

applies for the Domestic Purposes Benefit.

In Christchurch the department is seeking payment from 15,711 liable parents who collectively owe $768,000. So far 81 per cent have been contacted and up to $332,000 recovered. Most of New Zealand’s 125,000 liable parents are men, but liable parent contributions are required from whoever is the non-custo-dial parent. A large “chunk” of liable parents went to Australia to avoid paying, said Mr Smart. “Those who go away thinking they can come back when they are 60 to retire could be in for a shock if they find $20,000

deducted from their national super. It’s better if they get their affairs sorted out now,” he said. Assessing liable parent contributions could cause headaches for staff, however, because often there might be more than one liable parent for each child. Staff were also often caught in a “torrid” situation if a relationship soured. “The men tend to get very angry about paying if they think their former wife is setting up a liaison with another man,” said Mr Smart.

“But liable parent contributions are required because the State believes parents should take responsibility for their children.”

A member of the department’s review committee, Dr Libby Plumridge, said some men who were liable parents wanted to go through a separation “without a hitch in their finances,” but others were in genuine financial trouble.

If appropriate, the committee might reduce the amount a liable parent had to contribute and help establish a budget. Liable parent contributions were mandatory while the custodial parent was on D.P.B. Liable parents have to pay the department up to $94 a week for their first child and up to $l6 a week extra for each other child.

Debts recovered, page 4