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Housing payment glitch lasted decades

NZ NewswireNZ Newswire 30/05/2016
A bundle of New Zealand money. © RNZ / Alexander Robertson A bundle of New Zealand money.

An automatic payment error made 21 years ago has resulted in almost 90,000 people being incorrectly paid their Work and Income accommodation supplements.

An initial analysis by the Ministry of Social Development has found about 41,000 people were underpaid a total of $23 million, while about 46,000 people were overpaid around $32m.

The error dates back to 1993 and although it was identified and fixed at the end of 2014, Social Development Minister Anne Tolley was only told about it in March this year.

The ministry says work is underway to fix the problem and it's looking at options for repaying those who are owed money. Most individual underpayments are believed to be less than $1000 and Ms Tolley has ruled out trying to claw back money from those who have been overpaid.

Ms Tolley says MSD believed it had fixed the problem in late 2014, but at the time no one understood the longer term implications or consequences of it.

"It was thought to be a minor fix and they thought they'd fixed it," she told reporters.

It was only after MSD was ordered to do a review of all its payments and practices late last year, after a separate error was uncovered relating to the payment of benefits after a stand-down period, that the full scale of the accommodation supplement payment came to light.

That review has picked up a number of other issues and Ms Tolley said there are six specific problems that may have resulted in beneficiaries being underpaid, but the details are yet to be confirmed.

None of those issues are as big as the accommodation supplement problem, she said. Ms Tolley said she doesn't know why her ministry didn't tell her about the error sooner, but she has received an apology from its chief executive Brendan Boyle.

The accommodation supplement - a weekly payment to help people with rent, board or the cost of owning a home - had been correctly paid since December 2014.

The ministry pays around 286,000 people $1.2 billion each year in the accommodation supplement. About 800 current recipients were affected by the error.

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