Payments begin for current clients 21 Nov 2016
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Hon Anne
Tolley
Minister for
Social Development
21 November
2016
Payments begin for current
clients
Social Development Minister Anne Tolley says that current Work and Income clients who were underpaid due to a coding error in Accommodation Supplement payments will start to receive reimbursements this week.
The incorrect payments, which date back to 1993, have resulted in 49,000 current and former clients being eligible for payments. 22,000 current clients will receive a total of $14 million in reimbursements, with all of the payments expected to be made by the end of the year, accompanied by a letter of apology from the Ministry.
It’s estimated that 27,000 former clients were underpaid a total of $15 million, and starting next week former clients will be able to go online at the MSD website to assess their eligibility and to take part in the process to receive back payments. This online service will continue for at least six months, after which time it will be reviewed.
65,000 current and former clients who were overpaid a total of $53 million as a result of the error will not have to return any money.
“I was made aware of this issue after asking MSD to review its practices to ensure they were in line with legislation,” says Mrs Tolley.
“While we can’t go back and change an error from 23 years ago, the government is doing the right thing by everyone affected.
“Reimbursing anyone who was underpaid, while not asking for people to return money which was overpaid, is simply the right thing to do.
“In addition, Cabinet has agreed to exempt these lump sum payments from asset-testing for twelve months to ensure they don’t affect a person’s benefit payments.”
The average reimbursement for current and former clients is estimated at around $590, while 48 clients will receive $10,000 or more. The highest amount is $28,500, which is being paid to a NZ Super client.
MSD is working with key stakeholders, including beneficiary advocates, to ensure that clients and communities are well-informed.
More information and the relevant Cabinet paper is available at: http://www.msd.govt.nz/about-msd-and-our-work/newsroom/2016/accommodation-supplement-error.html
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