Plain language law

New Zealand law explained for everyone

Child Support Act 1991

Amount of child support payable under formula assessment made by Commissioner - Election that child support income be based on estimated taxable income for current year

44: End-of-year reconciliation

You could also call this:

“Checking if you paid the right amount of child support for the year”

At the end of the child support year, the Commissioner checks if you’ve paid the right amount of child support. This is called an end-of-year reconciliation. Here’s how it works:

The Commissioner looks at your actual income for the year and compares it to what you said it would be. If your actual income is the same or less than what you estimated, you don’t need to pay any more. But if your actual income is higher, you might need to pay more child support.

The Commissioner uses a special calculation to figure out how much you might need to pay. They look at how much you earned during the time your estimate applied, and they turn that into a yearly amount. They compare this to your original income amount and use whichever is lower.

If you made more than one estimate during the year, the Commissioner does this calculation for each period separately. They use a slightly different method to work out your income for these shorter periods.

After doing all these calculations, the Commissioner makes sure you’ve paid the right amount of child support for the whole year. If you’ve paid too much or too little, they’ll sort it out.

Remember, if there’s a court order about your income, the Commissioner has to follow that when doing this reconciliation.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM254043.

Topics:
Family and relationships > Children and parenting
Previous

43: Effect of revocation of election, or

"What happens when you change your mind about using your estimated income for child support"

Next

44A: Determining income amount if no tax return filed, or

"How the government figures out your income if you don't send in your tax forms"

Part 2 Amount of child support payable under formula assessment made by Commissioner
Election that child support income be based on estimated taxable income for current year

44End-of-year reconciliation

  1. For the purpose of determining whether a person has, or has been, underpaid or overpaid child support in a reconciliation period (period A), after the end of the child support year to which an election relates, the Commissioner must complete an assessment for the person who made the election (person A), treating the amount determined under subsection (2) or (3B) as person A’s adjusted income.

  2. Subsections (2) and (3) apply if period A is the only election period, or the last election period, in the child support year.

  3. The amount to be treated as person A’s adjusted income for the purposes of the assessment is,—

  4. if the actual income earned by person A during the year is equal to or less than the year-to-date income specified in the notice of election, nil; or
    1. if the actual income earned by person A during the year is more than the year-to-date income specified in the notice of election, the lesser of the following:
      1. person A’s actual income earned in period A (which is the actual income earned in the full year less the year-to-date income specified in the notice of election), annualised in accordance with the formula in subsection (3) (which gives the annualised actual income in the reconciliation period):
        1. person A’s original adjusted income.

        2. The formula for annualising person A’s actual income in a reconciliation period is—

          (a ÷ b) × 365

          Where:

          • a a

            is the actual income earned during the reconciliation period

          • b b

            is the number of days in the reconciliation period.

        3. Subsections (3B) and (3C) apply if period A is a period that is not referred to in subsection (1A).

        4. The amount to be treated as person A’s adjusted income for the purposes of the assessment is,—

        5. if the actual income earned by person A during the year is equal to or less than the year-to-date income specified in the notice of election, nil; or
          1. if the actual income earned by person A during the year is more than the year-to-date income specified in the notice of election, the lesser of the following:
            1. person A’s actual income earned in period A, annualised in accordance with the formula in subsection (3C) (which gives the annualised actual income in the reconciliation period):
              1. person A’s original adjusted income.

              2. The formula for annualising person A’s actual income in a reconciliation period is—

                ((a − z) ÷ b) × 365

                Where:

                • a a

                  is the year-to-date income specified in the estimate for the period that immediately succeeds period A

                • z z

                  is the year-to-date income specified in the estimate for period A

                • b b

                  is the number of days in the reconciliation period.

              3. In this section, unless the context otherwise requires,—

                reconciliation period, in relation to an election, means a period that—

                1. starts on,—
                  1. if the notice of the election is given before the start of the child support year, the start of the child support year; or
                    1. if the notice of the election is given during or after the child support year under section 40(8), the later of the first day of the child support year and the first day of the month in which the formula assessment begins; or
                      1. otherwise, the first day of the month in which the notice is given; and
                      2. ends with the close of—
                        1. the last day of the month before any other immediately subsequent election period starts in relation to another election; or
                          1. otherwise, the last day of the child support year.

                        2. After comparing the result of the assessment done under subsection (1) with the results obtained under section 41, the Commissioner must take whatever steps are necessary to ensure that the correct amount of child support is assessed for the child support year.

                        3. A reconciliation under this section is subject to any income amount order that applies during all or any part of an election period.

                        Notes
                        • Section 44: replaced, on , by section 13 of the Child Support Amendment Act 2013 (2013 No 12).
                        • Section 44(1): replaced, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(1A): inserted, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(2): replaced, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3): replaced, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3A): inserted, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3B): inserted, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3C): inserted, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3D): inserted, on , by section 16 of the Child Support Amendment Act 2021 (2021 No 6).
                        • Section 44(3D) reconciliation period paragraph (a)(ia): inserted, on , by section 236 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).