Write-off provisions

The circumstances under which penalties and debt can be written off have been expanded from 1 April 2015. The starting position for writing off penalties recognises that a liable parent who comes to Inland Revenue to arrange the payment of a debt is trying to comply.

Penalties can be fully or partly written off where a paying parent has agreed and adhered to an instalment arrangement and/or paid off the financial support debt, and where recovery of penalties would place the liable person in serious hardship or involve an inefficient use of the Commissioner's resources. The Commissioner can also decline to enter into a payment agreement where the liable person has not complied with earlier payment agreements and no reasonable cause existed for the non-compliance.

The Commissioner will be able to write off some, or all, of the benefit component of assessed child support debt (where the receiving carer was in receipt of a social security benefit). Debt would be able to be written-off on serious hardship grounds or if it was an inefficient use of the Commissioner's resources.

The Commissioner may also write off debt that is payable by the estate of a liable person if the liable person's estate is insufficient to pay the debt. Similarly, the Commissioner may write off debt that is payable by a liable person if the receiving carer has died and the Commissioner is satisfied that the amount is for any reason unlikely to be recovered.