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New Zealand law explained for everyone

Child Support Act 1991

Automatic deductions - Automatic deductions

169: Unpaid financial support to constitute charge on payer's property

You could also call this:

“Unpaid child support can lead to the government claiming your property”

If you don’t pay the money you owe for child support, the government can put a charge on your property. This means they have a legal claim to your property until you pay what you owe.

The charge applies when you don’t make the deductions you’re supposed to make, or when you owe money to the Commissioner. It covers the unpaid amount, plus any interest, penalties, or costs.

This charge doesn’t apply if a bank fails to make a deduction from your bank account.

The government’s charge comes after any existing mortgages or charges that are already registered on your property. But it usually comes before any new ones.

The Commissioner can register this charge on your property without paying a fee. If the property is sold, the money from the sale can be used to pay off what you owe.

The court can order the sale of your property or appoint someone to collect rent from it to pay off the debt. If your property is sold this way, the court can transfer ownership to the new buyer.

This law doesn’t apply to money owed under section 167 of the Child Support Act.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM256594.

Topics:
Family and relationships > Children and parenting
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Part 10 Automatic deductions
Automatic deductions

169Unpaid financial support to constitute charge on payer's property

  1. Where a payer fails wholly or in part to make any deduction in accordance with that payer's obligations under this Part, or is liable to pay any sum to the Commissioner under this Part or the Tax Administration Act 1994, an amount equal to the total for the time being unpaid to the Commissioner in respect of that deduction or that sum (including any interest or penalty), and in respect of any judgment obtained therefor (including any costs, fees, or expenses included in the judgment or otherwise payable by the payer to the Commissioner in respect thereof) shall be a charge on all the real and personal property of the payer.

  2. Nothing in this section shall apply to a failure by a bank to make a deduction from a bank account.

  3. Every charge created by this section shall be subject to any mortgage, charge, or encumbrance that exists at the time of the creation of the charge and that either—

  4. has been registered under any registration Act to which the property is subject; or
    1. that is valid and effectual under the Personal Property Securities Act 1999 without registration thereof,—
        1. but, subject to this section, shall have priority over all other mortgages, charges, or encumbrances. Notwithstanding anything in any other Act, if any property subject to the charge created by this section is also subject to a charge created by that other Act, the charges shall rank equally with each other unless by virtue of that Act the charge created thereby would be deferred to the charge created by this section.

      1. Despite section 23(b) of the Personal Property Securities Act 1999, if a charge affects property against which charges may be registered under a registration Act, the Commissioner may register the charge under the registration Act.

      2. The Commissioner is not required to pay a fee for the registration of a charge under a registration Act in reliance on this section.

      3. For the purpose of this section, registration Act, in relation to any property, includes—

      4. subpart 5 of Part 3 of the Land Transfer Act 2017 in every case where the property is land or an interest in land (including a mortgage):
        1. the Personal Property Securities Act 1999.

          1. Particulars recorded under subsection (4) are to operate and take priority according to the provisions of the applicable registration Act.

          2. If the registration under this section of a charge over property occurs after the registration of a mortgage over the same property and before an advance of money secured by the mortgage, the charge has priority over the mortgage in respect of that money.

          3. On the satisfaction of a charge that is registered under a registration Act in reliance on this section, the Commissioner must release the charge in the manner required by the registration Act, with such modifications as may be necessary.

          4. The Commissioner is not required to pay a fee for the release of a charge that is registered under a registration Act in reliance on this section.

          5. Any charge created by this section which is registered against any property shall operate to secure any amount secured by any prior unregistered charge and unpaid at the time of registration of the charge, and also to secure any amount secured by any charge coming into existence after the registration of the charge, so that the registered charge shall operate to secure the total of all amounts for the time being owing by the payer under all charges created by this section.

          6. If any amount constitutes by virtue of this section a charge on any property, the Family Court or the District Court may make such order as it thinks fit, either for the sale of that property or of any part thereof, or for the appointment of a receiver of the rents, profits, or income thereof, and for the payment of the amount of the charge and the costs of the Commissioner out of the proceeds of the sale or out of the rents, profits, or income.

          7. Where any property has been sold under any such order, the Family Court or, as the case may be, the District Court may, on the application of the purchaser or the Commissioner, make an order vesting the property in the purchaser.

          8. Every such vesting order shall have the same effect as if all persons entitled to the property had been free from all disability and had duly executed all proper conveyances, transfers, and assignments of the property for such estate or interest as is specified in the order; and in the case of land which is subject to the Land Transfer Act 2017 the purchaser's title thereto shall be registered accordingly.

          9. This section shall apply subject to section 167.

          Compare
          • 1976 No 65 s 367
          Notes
          • Section 169(1): amended, on , by section 3(a) of the Child Support Amendment Act 1996 (1996 No 65).
          • Section 169(1): amended, on , by section 3(b) of the Child Support Amendment Act 1996 (1996 No 65).
          • Section 169(3)(b): amended, on , by section 191(1) of the Personal Property Securities Act 1999 (1999 No 126).
          • Section 169(4): substituted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(4B): inserted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(5): substituted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(5)(a): amended, on , by section 250 of the Land Transfer Act 2017 (2017 No 30).
          • Section 169(6): substituted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(6B): inserted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(7): substituted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(7B): inserted, on , by section 3 of the Child Support Amendment Act (No 2) 2003 (2003 No 125).
          • Section 169(9): amended, on , by section 261 of the District Court Act 2016 (2016 No 49).
          • Section 169(11): amended, on , by section 250 of the Land Transfer Act 2017 (2017 No 30).
          • Section 169(11): amended, on , by section 7 of the Stamp Duty Abolition Act 1999 (1999 No 61).