In which Toad gets prickly with Cactus Kate on DPB and deadbeat dads

Aspiring  ACT MP Cathy Odgers, aka Cactus Kate, has trawled up my 2008 post here on deadbeat dads who avoid supporting their children:

…those [fathers] … using devices such as self-employment, employment on a very low wage by a company they own, and Loss Attributing Qualifying Companies, to minimise their taxable income, and consequently minimise their child support payments.

The term “bludger” to me far more accurately describes child support avoiders than it does the women who are forced onto a benefit in order to care for their children.

Isn’t it time that we reviewed the Child Support Act to allow Inland Revenue to go behind the declared taxable income and assess the real ability of deadbeat dads to provide for their children?

Odgers  is using it to make a pretence of  Green support for her agenda:

DPB: This needs to be abolished. Unless there are safety concerns ALL fathers should be named and levied directly for child support for their individual child. Any mother under the age of 25 should have her parents means tested for eligibility for the dole should the father not be able to pay. This would incorporate a true whanau concept to child-rearing and make parents responsible for their children’s decisions where they could not afford the child themselves.

In response, I should first state I blog at g.blog  as an individual who is a Green Party member.  I don’t claim to represent the Green Party. My g.blog post here on Labour’s Emmissions Trading Scheme, amplified by David Farrar’s post here, exemplify  that I don’t always tow the “official” Green Party line.  So there is nothing officially “Green” about what I say here.

More importantly, the only part of Cathy Odgers’ post I agree with is that deadbeat dads should be required to be more responsible for their children.  I’m not sure even she would agree with that, because doing so means going behind the form of absentee fathers’ tax returns and looking at the substance of their arrangements.

For example, if an absentee father is self-employed, all the rorts in the world come into play:

Set up a company.  Set up a trust, of which the absentee father is a beneficiary, to own the company.  Decide the company pays a salary of $30,000 to yourself, even though it makes a profit of $1 million.  The dividend on the profit gets paid to the Trust, which then lends money to you as a beneficiary of the Trust.  You pay SFA child support and there is no need to pay off your loan to the Trust until the kids are  over 25, or for that matter until you die, so there are student allowance implications as well.

I agree that deadbeat dads who run that sort of rort need to be made to face up to their responsibilities.  Do you, Cactus Kate?

But I totally disagree that single mothers and their children should be victimized,  as Cactus Kate suggests, if the father can’t pay (because of genuine financial circumstance) or won’t pay (because of the rorts our tax system allows) or if the custodial single parent happens to have the bad luck to be aged under 25, which would be a blatant breach of the NZ Bill of Rights Act.

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5 thoughts on “In which Toad gets prickly with Cactus Kate on DPB and deadbeat dads

  1. “I agree that deadbeat dads who run that sort of rort need to be made to face up to their responsibilities. Do you, Cactus Kate?” –

    Yes I think that is clear.

    The real people victimising solo mums and kids are the deadbeat sperm donors as per my argument. Nothing I say or do will ever hurt solo Mums or kids more than deadbeat sperm donors.

  2. So, CK, what about the single mothers for who the fathers either won’t pay or can’t pay. How do you propose their children be supported?

    What specific mechanisms – and in particular do you agree with going past the form of an income tax return and looking at the trust and company arrangements that a deadbeat dad has used to avoid child support?

    And what about those who just bugger off overseas?

  3. Pingback: Toad’s ‘deadbeat Dads’, Cactus Kate’s response to Bomber’s blog… | g.blog

  4. Pingback: On ‘deadbeat Dads’ and Cactus Kate’s post « Anarkaytie’s Weblog

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