Parents Stung With Unexpected $24,000 Tax Bill
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."