About 240,000 people were mistakenly sent a letter from Inland Revenue informing them their Working for Families payments had been cancelled.
The Notice of Entitlement letter told recipients they would not receive any payments from April 1.
An Inland Revenue spokeswoman confirmed to the Herald "around 240,000" letters were sent, and they were investigating how it came about.
"Essentially, the letters shouldn't have gone and we're sorry for any distress caused," she said.
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