Government short-changed over 7000 of NZ's most-desperate beneficiaries by millions

NZ Herald

20 Sep, 2017 05:58 AM4 mins to read

Green Party MP Marama Davidson called the Government's error "one of the cruellest things" it could do. Photo / Dean Purcell

More than 7000 of New Zealand's most-desperate beneficiaries have been short-changed by the Government - and they're about to get payback.

A Ministry of Social Development report has found 7148 people on Special Benefits have been underpaid by the Government since 2006, and they have known about it for two years. MSD have estimated the amount could be up to $9.5 million.

In 2015, MSD was advised that it needed to offer the Temporary Additional Support (TAS) to beneficiaries if they were better off on it.

Green MP Marama Davidson said there was no reason this had to happen and the Government had been slack in trying to give people their money back.

"They're on the bones of their arse needing this help to survive and this is withheld from them. This is one of the cruellest things a Government could to its elderly, vulnerable and sick."

Davidson was critical of the payback scheme as in the interview beneficiaries would be pressured to go on a TAS which has tighter criteria, more paperwork and less security as recipients needed to apply every 13 weeks.

"The Government will stop at nothing to get their statistics down for getting people off the benefit and cutting down payments even if it means creating further hardship," she said.

"All they care is how it looks on the accounting."

Almost 2000 people stand to get over $1000 cash back.

The Temporary Additional Support benefit replaced the Special Benefit on April 1 2006. It is used as a last resort to help clients meet regular essential living costs which can't be met from their income or from other resources. The costs could include buying essential household appliances, employment related costs like childcare or repayments for a previously purchased vehicle.

This assistance is available for a maximum of 13 weeks and may be reapplied for if clients have an ongoing deficiency of income.

After the TAS was introduced SB were only paid if they were granted before the introduction date or to clients who had their entitlements reviewed.

To be on SB you must have less than $1000 in cash assets.

MSD spokeswoman Ruth Bound said around 12 per cent of the people who were grandparented on the SPB may have been better off on TAS.

MSD's understanding of the law was that clients could not cancel their Special Benefit and apply for a TAS, even if it meant they were better off. They then received advice in 2015 that in fact clients could move to TAS.

"Since then we have been establishing in more detail how many people are worse off as a result of not having moved from the Special Benefit to TAS. We have also been working through other cases where our practice is not in line with legislation, in the areas of the Accommodation Supplement and core benefits."

Bound said they would give beneficiaries the option of moving on to a TAS and receiving a back payment. Those payments would be made by early next year.

"The Ministry has been working constructively with beneficiary advocates on the best way to resolve the issue and how best to contact those clients affected and to offer back-payments where appropriate."

To get the reimbursement beneficiaries will be written to and invited to an interview to discuss applying for TAS. MSD will then grant them a TAS from the "most financially beneficial point" and MSD will cancel their SB and pay them the net arrears.

This process is estimated to be completed six months after the regulations change.

Davidson was worried the process would act as an obstacle for people to get their payback and more effort needed to be put into marketing.