3 Apr 2018

MSD overpayments reveal 'double standard' advocate says

1:45 pm on 3 April 2018

The Ministry of Social Development has a "double standard" in the way it treats pensioners and beneficiaries when they're accidentally overpaid, a beneficiary advocacy group says.

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Photo: RNZ/ Rebekah Parsons-King

Figures released under the Official Information Act to RNZ show more than 7,500 superannuation overpayments, worth $3.8 million, have been wiped by the Ministry of Social Development over the last five years.

One pensioner was mistakenly overpaid $43,301 - and it was the largest single debt to be wiped in 2016.

It's not known how many benefit overpayments have also been written off, though RNZ has requested the information.

Overpayments to beneficiaries and pensioners were quite common, but superannuitants were more likely to get the debts wiped, Auckland Action Against Poverty advocacy coordinator Alastair Russell said.

"There's a world of difference in how people on national super are treated by Work and Income and the way other beneficiaries under the age of 65 are treated.

"There's a clear distinction between the deserving and the underserving poor," Mr Russell said.

Beneficiaries who were mistakenly overpaid were often "too scared" to challenge MSD about having to repay the debt often created more hardship, he said.

However, Grey Power Federation president Tom O'Connor said it was only fair that superannuitants had debts wiped if they were the result of clerical errors by MSD staff.

"A lot of pensioners live almost from hand to mouth and if they suddenly have an overpayment issue they don't have the resources to pay it back.

"It's a very pragmatic approach for the ministry to say 'it's our error and we'll wipe it'... MSD are now developing a little bit more empathy than in the past," he said.

Minister for Social Development Carmel Sepuloni said she was seeking more advice on the issue before commenting.