KEY POINTS:
The Government wants to clamp down on prisoners who continue to get benefits while in prison and make it easier to track down people with benefit debts.
A bill introduced yesterday will stop welfare benefits or student allowances once it is discovered a beneficiary has been sent to prison, rather than giving the five days' notice required under the Privacy Act in which to appeal the finding.
Matching up beneficiaries on the Ministry of Social Development's books with information in other departments, such as Corrections and ACC, picked up $29 million in overpaid benefits last year.
The Social Assistance (Debt Prevention and Minimisation) Amendment Bill is aimed at reducing this debt by over-riding a section of the Privacy Act which requires five days' notice be given of the match-up between Corrections data and someone on a benefit.
The delay led to more than $2.1 million in overpayments to prisoners last year.
The bill also extends the information that can be shared to include those on student loans or allowances and will allow the ministry to get information on current prisoners, rather than just new prisoners, to catch any who apply for benefits while still in prison.
It will also be harder for people with benefit debts to evade repayment because the measure will allow greater information sharing between Customs, ACC and the Ministry of Social Development.
However, the provisions mean people may be wrongly identified and have their benefits cut off without warning.
Ministry of Social Development figures show this happens in less than 1 per cent of cases - in the 2005-06 year, 26 people out of 4012 had their benefits wrongly suspended.
A spokeswoman for Minister of Social Development David Benson-Pope said work was underway to improve the accuracy of the matching.
She said benefits mistakenly cut off could be reconnected immediately and paid overnight. Work and Income could also pay for emergency costs such as food or charges for unpaid rent.
National's welfare spokeswoman, Judith Collins, said the ministry needed to reconnect benefits swiftly in such cases.
She said she had not seen the bill but a clampdown on benefit abuse was needed and she was eager to see it.
"I'd have to take it to caucus, but this is an issue we've been raising, the overpayment of benefits to prisoners and rorting of the system, so I am looking forward to seeing it."
The Privacy Commissioner would monitor any impact the changes had and the wider information sharing between departments.
