Budget 2022: Outdated sole parent law to be reversed

The outdated sole parent law is to be reversed as part of Budget 2022.

Child (file photo).

Sole parents on benefits have for decades "been denied money that is rightfully theirs by an outdated rule that has seen the Crown retain their child support payments," Prime Minister Jacinda Ardern said.

It means the payments will be treated as income and go directly to the parent. Currently, the state can hold onto child support payments to recoup the cost of welfare.

However, the Government won't be reversing the rule until mid-next year, despite the estimate that it could lift between 6000 to 14,000 children out of poverty and it was also a recommendation in the Welfare Expert Advisory Group report.

Ardern said it was thought that it would encourage more parents to pay their child support payments as it would mean the money would go to their children - rather than the Crown.

Social Development Minister Carmel Sepuloni said it was estimated more than 40,000 families would get a median gain of $24 per week after the rule is reversed.

"This will be the first time in New Zealand's history that children of sole parents on a benefit will receive their full child support payments."

She said changing the policy "isn't an easy fix", with changes to the law introduced later this year, only coming into force mid-2023.