31 May 2016

More benefit payment issues uncovered

5:11 pm on 31 May 2016

Payment problems at the Social Development Ministry could be bigger than previously thought, with a review finding more than 30 examples where it was not complying with the law - six of which could require reimbursements.

Anne Tolley

Social Development Minister Anne Tolley in Auckland. Photo: RNZ / Kim Baker Wilson

RNZ News revealed today that an automatic payment error resulted in almost 90,000 beneficiaries being underpaid or overpaid, with the mistake totalling millions of dollars.

The error at the ministry dated back to 1993 and resulted in thousands of people being given incorrect accommodation supplement payments across 21 years in a $55 million blunder.

Social Development Minister Anne Tolley said today a review has found more than 30 other examples where the ministry was not complying with the law - six of which could require reimbursements.

"Hopefully by October of this year we will have addresssed the majority of the issues that they've identified today."

Anne Tolley

Social Development Minister Anne Tolley was told about the payment problem in March this year. Photo: RNZ / Kim Baker Wilson

Ms Tolley said the government was going to put the mistakes right.

"My attention now is in how we are going to fix this and how we are going to make sure that the practice matches the law."

She said MSD used a very complicated system.

"Thirty thousand transactions in a day, eight million a year, they're going to get some of them wrong."

Ms Tolley said she had received a formal apology from the ministry's chief executive for the 18-month delay in alerting her to the accommodation supplement mispayments.

The Green Party said Ms Tolley may have lost control of her ministry.

Greens' social development spokesperson Jan Logie said the mistakes raise a lot of questions about the performance of the ministry and its minister.

"Either the minister is covering up inaction, or she has lost control of the ministry."

New Zealand First's social development spokesperson Darroch Ball said the system's broken.

"It's a long-term problem, and it needs to be fixed, and the fact that we're finding out decades later is an issue," Mr Ball said.

"There needs to be a real overhaul of the system."

A spokesperson for the Beneficiary Advocacy Federation, Kay Brereton, doesn't expect there will be any public backlash against beneficiaries.

"Most taxpayers do not begrudge benefits being paid to people in need, but they would begrudge a system that's not being administered properly.

" don't think they'd blame the recipients, they'd be smart enough to blame the system," she said.

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