Parents stung with unexpected tax bill

Photo: RNZ

More parents say they have been shocked to receive unexpected tax bills because of an oversight in filling out an IRD form.

IRD says it may initiate discussion with Department of Internal Affairs about how the situation could be avoided.

The parents say mother-of-two Megan Hunt is not the only person to have been caught out by accidentally not declaring the existence of a partner.

Hunt told RNZ this week that she had been handed a bill for $9000 for overpaid Working for Families credits when she applied for the Family Boost childcare subsidy.

She said the problem arose because, when she registered her child's birth and filled out her husband's details for the birth certificate, as well as supplying information for Working for Families, she missed a tick box declaring she had a partner.

Another woman, Jess Henwood, said she had missed the declaration in a similar way.

"I was doing my tax return last June when the very next day I ended up with $8000 in my account. Being an honest person, I thought that's not correct so inquired to IRD saying I don't think I'm entitled to this.

"They then asked me if I had a partner and all his details. I said I've been married for the last 13 years and he's our three children's father. They then told me I didn't declare him when registering our youngest daughter's birth in 2022 and I owed them $24,000 with growing interest and debt fees."

She said she went to the Department of Internal Affairs and found out she had misunderstood the form and not included him by accident.

"Which is incredibly frustrating as I'm an honest person not out to rip the IRD off... I'm not surprised by the amount they have overpaid to ineligible mothers. I was told if I wanted to change anything I'd need to go to Parliament. This whole system is ridiculous and too easy to get wrong."

Another woman said she was given an $8000 bill the week before Christmas and was expected to pay it by the end of December.

"They sent me another letter on January 3 saying the payment time had been extended to February, and this morning sent another letter saying the debt was overdue and they had contacted my employer to make unspecified deductions from my wages.

"I finally got hold of them yesterday and the person I spoke to was very empathetic, but unfortunately we're still liable so we have started a payment instalment arrangement, which is just another financial burden we didn't need.

"You kind of expect that when the tax department has all of your family's details, their processes would be robust enough for a red flag to pop up if some information hadn't been linked correctly. I'm certainly no accountant, and thought I had done everything right in terms of declaring our family status."

She said she had tried to offer details about her partner but the information had not reached the tax department.

Past and present relationship details needed

An IRD spokesperson said even if a father was named in the birth certificate application, it needed to know that the father was in, or still in, a relationship with the mother.

"Hence the need for the partner/husband affirmation in the Working for Families form; and again, the two are separate forms that need to be filled out accurately.

"That said, we are aware of the issue and some discussion with DIA may be initiated to look at how the two processes - birth certificate application and Working for Families - work when they present the way they did for your contact.

"We do have a process within Family Boost which may identify a mismatch between a Family Boost claim with a partner, and a Working for Families record showing no partner. When this happens, our people will look into the account, make contact with the customer and make any other required adjustments."

-RNZ

5 comments

Hmmm

Posted on 11-01-2025 11:43 | By Let's get real

Lying on forms to receive increased benefits has been going on for far too many years and it's fantastic to see that thieves are being held to account for their actions.
Unfortunately, you can't expect a third party to know that you have made a genuine error when reviewing your application.
We all know of people claiming to be single parents while having a resident "partner" in the household. So let's see this continue and see the thieves that are blatantly abusing the system held to account.
Mistakes happen, but deliberate misinformation is theft and should be punished.


@Let's get real

Posted on 12-01-2025 13:32 | By morepork

The problem is knowing when it was deliberate and when it was accidental. As an ex-computer system designer, I think there is no excuse for bad systems that do not make it very clear. If having a partner can drop you into thosands of dollars debt, then a small tick box is probably not adequate. I'd have boxes on the form for partner's first and surnames...MUCH harder to miss. Human interfaces (usually forms) should capture only what is needed to support the process, should be clear and in plain Eglish, and limit the data captured on a single page. Sure, there are dishonest people, but here are also honest mistakes. The system should help to minimize those.


@ morepork

Posted on 13-01-2025 13:59 | By Yadick

. . . should be clear and in plain Eglish . . .
HAHAHA πŸ˜‚
Happy new year morepork. Wishing you a spectacular 2025 and looking forward to your posts on here. Cheers Yadick.


@Yadick.

Posted on 16-01-2025 11:24 | By morepork

Thanks for your greeting and kind words. Same to you! BTW, it is NOT impossible to put clear English into computer/Human interfaces; the problem is that a lot of the people designing systems just don't speak proper English or have it as a non-primary language. Proper testing with focus groups should identify where there are problems, but, all-too-often, they are under pressure to release systems that have not been fully or adequately tested.


@ morepork

Posted on 16-01-2025 17:33 | By Yadick

Oh I realise that and totally agree.
What made me laugh was your spelling of, clear and plain 'eglish'
Your 'eglish' just wasn't clear and plain.
It was a great mistake 🀣


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