A court has heard a case in which a Dunedin beneficiary was not told what money Work and Income was deducting may be a nationwide problem.
The government agency has begun a High Court appeal against a Human Rights Review tribunal decision last year awarding Gordon Holmes $17,000 in compensation for two breaches of privacy law after it failed to provide personal information he requested.
Mr Holmes had had a running battle with Work and Income over its refusal to fund a $70 eye test.
At the Dunedin High Court on Monday, Crown lawyer Joanna Holden argued that Work and Income should not be penalised for withholding personal information about debt reduction payments.
Ms Holden told the court that Work and Income's Dunedin branch manager did not respond correctly because she simply misunderstood what Mr Holmes was requesting.
Gordon Holmes is representing himself, but is being assisted by Les Andersen, a court-appointed lawyer.
Mr Andersen told the court that hundreds of thousands of beneficiaries could be affected by the way Work and Income's benefit payments system changes the amount being repaid without notification.
"The problem is that what the computer system does is different to what they're told when they take out their loan.
"So they're given it will be deducted at this rate and all the way through. And then while that's what the letter that goes out and tells them, the system does something different."
Mr Andersen said the case has highlighted failures in Work and Income's procedures which the tribunal rightly described as systemic.
However, the Crown has argued that the tribunal was wrong to describe the breaches as sustained and systemic - because they were neither.
The case is expected to conclude on Tuesday.