Child Support Proactive Engagement Pilot - video transcript
Thank you, Valmai, that was a really good presentation. It's a nice segue looking at going from teen pregnancies going into Child Support services which a lot of what I'm going to talk about today deals with the young, new liable parents and the ways that we can interact with them.
So, a lot of you don't know me, actually, I've been in New Zealand for only about five years, prior to that I was in the US Child Support programme for about ten years and every year what we've done was we always debated what are the best ways to improve the programme so that we can better support the children and have outcomes for families.
So, there's materials on a lot of research in the area, there's a worldwide Child Support network that's available on the web and it hosts a lot of different counties and it has -- I think they had two annual conferences where you can go and look at the literature of the Hague Conventions and things like that and some other countries, what they're doing. There's also the National Child Support Enforcement Association as well and that has -- every year they have a national conference where counties -- about 35 counties from around the world gather and talk about how to improve the outcomes for children.
So, what I'm going to do is I'm just going to give you a little bit about what I'm going to present and first I'm just going to give a little bit of a context of Inland Revenue and then the second thing is what is Child Support and who are liable parents, who are they exactly? Then I'm going to tell you the task at hand with regards to this early intervention pilot that we did for new customers and we're going to explain what we found with the pilot, and as a result of all these findings, you know, what did we do with them, did we use it for a BAU initiative or are we trying to improve -- how do we take these findings and move forward.
So, basically in a nutshell, Inland Revenue has its mission and vision and a strategic focus, obviously. So, in the mission, we obviously contribute to the economic and social wellbeing of New Zealand by collecting and distributing money. The vision is to be a world-class revenue organisation recognised for service and excellence, and the strategic focus is to grow voluntary compliance by making it easier for people to get it right, reduce customer compliance costs and make government policy changes faster and more cost-effective. So, a lot of the strategic focus that I'm going to be talking about belongs to that first bit, which means we want to grow voluntary compliance to get people to get it right.
We just recently had a new restructure of our organisation, and in that structure we wanted to emphasise how we are going to work as an organisation and on three basic principals. One is that we really wanted to be customer centric, we wanted to understand who our customers are and service them properly to make better decisions. The second thing is we wanted to be intelligence-led, we wanted to use the data and the information we have to make better decisions for our customers, and then we wanted to be agile, we wanted to work so that we can gather insights from various people within the organisation as well those outside the organisation and work together in a very collaborative way to achieve our goals.
So, basically what is Child Support? Well, Child Support, in its simplest terms, is money paid by parents who do not live with their children or who share care with somebody else, and the money is to help the cost of raising the children. That relates basically to the Child Support Act and there's some articles in the Child Support Act and that Act was established in 1991 and basically the purpose in that Act gets a little bit more specific about Child Support and it's basically used to ensure that the children are financially supported by both parents, so -- and that parents maintain the financial responsibility for their children and that also it minimises the cost to the State in providing financial support for their children.
So, what does collecting Child Support really depend on? There's a really great article by Deloitte, who has done a lot of research in this area, called the Next Generation of Child Support Improving Outcomes for Families, and it really basically boils down to three things and I'll add a fourth.
The first is that you need parents to be cooperative, but exactly how hard is that to accomplish when you're dealing with the break up? In reality, it's not very easy to have cooperative parents, you know, they fight for custody, they fight for financial responsibilities and so on and so forth. Also is the parents' emotional connection with their children. Obviously, the better connected you are emotionally with your children, the more likely you're able to cooperate and pay Child Support. And, finally, it’s employment and/or income of liable parents. We -- and our child's population tends to be on the lower income side, skewed to that area and with lower income parents, generally they support -- we're asking them to support single mothers or receiving carers who also are struggling to pay their bills and so on and so forth so in a really modern Child Support system, we have to work together as an organisation within government and between government to pull each of these levers. So, how do we improve the employment or the financial wellbeing of parents so that they can support their children? How do we have better conversations so that we can have parents be more cooperative in the process? And the final thing I want to add is that I think we should have an organisation such as IR where it's a supportive environment, where parents don't have to feel threatened when they call us and that we can provide the support and information they need.
Just some really quick numbers of how many customers that we deal with, we have about 164,000 liable parents who owe Child Support in New Zealand and overseas. We have 135,000 receiving carers, we have 183,000 qualifying children for Child Support and we bring in about 1,000 new customers entering the scheme each month.
Based on the annual report, we collected about $473 million and distributed $287 million to receiving carers. We have about $2.3 billion in Child Support debt that we carry and I can talk to you a little bit about that later if you have questions, and then we collect about 69% of the assessment that's paid on time.
So, who are new Child Support liable parents? Well, new parents are those who are assessed to pay Child Support for the very first time or they can be returning into the Child Support scheme after being absent for a while if they're newly assessed.
One of the very first pieces of work that we've done was we contracted out and interviewed customers to find out some insights regarding the onboarding experiences when they become new customers, and here's some things that they've said that allowed us to go into what this pilot was about:
First thing, they would like advice and help and information to be provided early in the registration process obviously. They like to be provided a better education, going over their obligations at the earliest possible moment, they expressed a need for advice either face to face or over the phone and they like to have some reassurance after the first conversation that they know what to do and obviously it makes sense, right? I mean, if I enter a contract and buy a house, for example, I would want to sit down with somebody and go over my 30 year mortgage, it makes sense. So, if you're going to be liable for the next 18 years, you would wanna know what's in it for me, what happens if I don't pay, I mean it's common sense to me.
Other things that we looked at about new liable parents is that they're very young, the median age is about 25 years old, only about a quarter of these customers pay their first few obligations on time which is quite low. They have relatively low income which is the median of about $19,000 per year annually and some insight work that we've done is that two thirds of these parents have over a 75% chance of getting into Child Support debt and staying in debt, so we have a lot of people who just, once they get into debt, they have a very hard time, difficulty getting out of it.
So, when we tested this idea, we looked at new customers using three -- basically three areas. One is the use of behavioural innovations, we wanted to test this idea of having better conversations. We wanted to use a customised case management approach where we wanted to walk customers through their journey for the first four months and then we wanted to introduce the idea of when we have a talk with customers, we wanted to have some sort of support service referral or information so if they have issues with housing or food or income or education, we wanted to refer them to the proper government agencies that can help them with their needs.
So, basically in a customised case manager approach, we had basically an initial call, an initial education call and they received an overview of how their assessment was calculated and then we followed up with the letter going over the details of the call and then they had a text reminder of the call before their first due date, and then we monitor them for the first four months, all calls were handled by a specific team of four officers, and then we assisted them with setting up payments through internet banking, and this was really key, we took the time to get them to set the payments up because a lot of them really didn't know how to do that, believe it or not, and once we sort them and help them and walk them through it, we found that we got some positive results.
So, one of the things in a behavioural interventions area is that we had a behavioural psychologist on our team and we used a variety of different things like soft skills training, empathy, active listening skills, things like using appeals, like, "Oh, by the way, I'm sure you want to do the right thing for your children", this sort of type of conversation, we reframe the conversations to make it easier to understand, use some negotiation techniques and the bottom one is really important because we emphasised the importance of paying Child Support for the benefit of his or her child, which we wanted to resonate that you're not just doing this because we're telling you to do this, you're doing this because you have an obligation to support your children even though you're not living with them.
For liable parents that needed outside assistance, we provided them with government agency referrals, like I said, to find some work and parenting and relationship counselling, et cetera.
So, we had this pilot and we tested 240 new liable parents and we compared them to two types of control groups. One is those that received applications over the phone and the rest who didn't receive applications over the phone, we called them the Registration Initiative and the Standard Group respectively and the pilot ran from July through December 2017 and performance and survey results were assessed after the first liability.
So, here's some of the things that we found from the survey that was done after the pilot. The pilot group found that effort was reduced, they found it easy to understand their obligations, findings also was that emotional stress was reduced, they found it less emotionally difficult in dealing with Child Support matters, the financial stress was reduced, digital literacy improved quite a bit, I would say so, believe it or not, a lot of folks don't have access to computers, they can't afford data plans on their phones, things like that, so we walked them through getting just more confident about internet banking and things like that, and then the attitudes towards paying Child Support obviously improved.
Some of the survey results also found that compared to the control group, there was an increased confidence by speaking to someone to get things right, by speaking to somebody, they understood their obligations, it removed the stress and it decreased customer effort and they felt more confident about what to do next.
Some other performance results we tested looked at the first five months of the intervention compared to the next 12 months and we had three measures of compliance, one is the actual percentage of assessment that was paid and the percentage of customers paying full and on time, and the percentage of customers who paid their full first three obligations on time and as you can see, both in the first five months and then well into the next 12 months, the pilot group out-performed each of the control groups on a consistent basis and keep in mind that this is for brand new parents.
Now, there is a group of parents that were actually returning customers who were in debt and unfortunately this type of interaction had no effect on those because these -- our hypothesis was that they have debt and they've developed into this habit of not cooperating, and so one of the things that we're working on is how do we reengage people who are in debt, how do we negotiate to relieve their penalties so that they can re-participate in this system to support their children?
Now, this is a longitudinal look of the percent of assessment that was paid and what we notice is that by the second month throughout the -- and that's the 18th month by the way, I'm sorry, 18 months -- by the 17th month, the pilot group are paid much more of the proportion of their assessment than the other two control groups, while the two control groups have been declining over time, the pilot group sort of maintained itself throughout the longitudinal period.
So, bringing it all together, the results of this pilot demonstrated that a cost effective approach towards improving outcomes for families and the next step was, well, this is great and all, we have these findings, but what do we do with them? Do we just sort of put them on a shelf and have a nice chat about it, or do we want -- can we do something really meaningful to implement something?
So, what we did -- I'm sorry, the Families segment implemented an initiative called "This is Us", and it was implemented in July 19, and really it's taking in -- the philosophy of This is Us is to take and help train our staff to recognise that customers are at the heart of every interaction and that the Families segment pioneered this new way of engagement that embraces the shift in the way we service customers. So, the activities are aimed to support Families officers to have better conversations with new and existing customers and understand the customer journey at every interaction for each of the following products, not just for Child Support, but we have Paid Parental Leave, Best Start and Working for Families.
So, in the end, This is Us is designed to build rapport, especially during their first point of contact. It seeks to understand a customer's unique situation and uses empathy and relationship management skills to better meet the customer's needs and work with the customers to provide solutions and assurance and this is designed to improve overall certainty and assurance with their own obligations.
And that's the end of the presentation. Thank you.