Benefits underpaid for 18 years

Certain beneficiaries have been underpaid by a total of one day each since 1998. Photo / Hagen Hopkins

Beneficiaries have been underpaid for the past 18 years - and the Government is now seeking to change the law to avoid paying for the mistake.

Certain beneficiaries have been underpaid by a total of one day each since 1998, beneficiary advocate Kay Brereton said.

An amendment to legislation currently before Parliament would mean such underpayments would be wiped.

"For the past 18 years Work and Income's computer system has been set-up to grant a person's benefit from the day after their stand-down ends," Ms Brereton said.

"However, the law required that the benefit be started the day the stand-down ends - which is one day earlier."

This meant thousands of people had been short paid by one day, and people who had been granted a benefit several times since 1998 have been short paid several times.

"Would this happen if a parliamentary allowance was underpaid? I doubt it very much," Ms Brereton said.

Social Development Minister Anne Tolley said the law change simply reflected what was happening on the ground.

"We're talking a day, so it's not a huge amount of money," Ms Tolley told Radio New Zealand.

"It's just unfortunate that it was the normal practice for a long period of time...so now we're making it very clear in law what was Cabinet's intention."

The select committee reporting the changes will report back in January next year.