A family trust pays my child’s expenses, do I still need to pay child support? The Ex-Files

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Question: My child’s expenses are paid through a family trust, and I personally have little or no income. Can I be exempt from paying child support because the trust already meets…

A parent cannot contract out of the Child Support Act 1991. Photo / 123rf

Question: My child’s expenses are paid through a family trust, and I personally have little or no income. Can I be exempt from paying child support because the trust already meets my child’s costs?

Answer: Not necessarily. Having a family trust that pays your child’s expenses does not automatically exempt you from paying child support.

This issue can arise where a family’s financial affairs are structured through a trust rather than through the parents personally. For example, the trust might own the family home, pay school fees, cover living costs or meet other expenses for the child. A parent may therefore feel that they are already providing substantial financial support for the child, even though they personally receive little or no income.

Please note that a parent cannot contract out of the Child Support Act 1991. Even if both parents initially agree to a voluntary agreement for payments, either parent or a third-party carer can apply for the child support formula in the future despite this agreement.

However, child support is generally treated separately from the way in which a family choose to structure their finances. The fact that the trust is paying a child’s day-to-day expenses does not necessarily mean that the parent has satisfied their child support obligations.

Similarly, having little or no income does not automatically mean a parent will have no child support liability. The parent’s financial circumstances still need to be considered in the context of the child support regime.

This can be particularly relevant where someone has access to financial resources even though they do not receive a conventional salary or wage. For example, some families operate businesses or hold investments and property through trusts. Others may have moved to New Zealand from countries where family trusts or similar structures are commonly used to own property and meet family expenses.

The key point is…

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