$40 million owed in Rotorua child support and penalties | Rotorua News | Local News in Rotorua

Nearly 6000 Rotorua parents owe almost $40 million in overdue child support payments.

Figures released to The Daily Post show 5701 Rotorua parents owe about $40 million in child support payments - $25.9 million of which is penalties for non-payment by absent parents.

Local politicians say the growing amount of child support owed and rising penalties are both concerning issues. Labour List MP Steve Chadwick said Inland Revenue Minister Peter Dunne highlighted problems with the child support payments system three years ago but since then had "sat on his hands".

"National is not taking this issue seriously," she said.

The penalty regime for non-custodial parents who didn't pay acted as a disincentive for people to meet their responsibilities, Mrs Chadwick said.

About 96 per cent of parents liable for child support have incurred penalties for non-payment or late fees.

"There is no doubt we need to ensure that non-custodial parents take responsibility for their children by paying an appropriate amount needed to ensure their children do not miss out," she said. "We can't, however, make the system so difficult that people simply choose to opt out due to the mounting level of debt accrued through penalties and interest."

Rotorua MP Todd McClay said he agreed the issue was concerning.

The Government had appointed a committee to look at the issues, he said.

The problem had been highlighted a "decade" ago and there needed to be change to the system, especially considering more was owed in penalties, Mr McClay said.

"Few people realise that any penalties incurred go to IRD, not to the custodial parent - this needs to change," he said.

Rotorua Budget Service advisor Pearl Pavitt said people struggling to pay child support should seek help from a budget advisor.

Child support is compulsory whether a non-custodial parent is working or on a benefit.

If the parent who has custody of the child has a job, the monthly payments are collected by Inland Revenue and passed on to them. If they are on a benefit the money is paid to the Government.

People who lost their jobs needed to make contact with Inland Revenue to ensure their payments were adjusted, Mrs Pavitt said.

"If they don't pay, the payments are backdated, creating a debt," she said.

"Child support is not something we can get rid of. If they go to a budget advisor then we can contact IRD to see if the payments are too harsh ... situations change," she said.

A spokesperson for Inland Revenue said one of the biggest difficulties the department faced was collecting child support from parents who went overseas.

There is a reciprocal arrangement between Australia and New Zealand with data-matching between the two countries.

"One of our difficulties is that people are more transient than in the past," she said.