Multi million-dollar benefit debts 'written off'

Multi million-dollar benefit debts will never be re-paid because the Labour Government is making life too easy for benefit fraudsters, says National's Welfare spokeswoman, Judith Collins.

"Millions of dollars will effectively be written off because repayments are calculated to ensure that people who rip off the system suffer no financial hardship.

"Ministry of Social Development figures show that five sickness beneficiaries owe a combined $791,442, with debt being recovered at rates of between $15 and $46 a week.

"Five DPB recipients owe a combined $896,622, but they have to repay only between $20 and $45 a week.

"Five unemployment benefit recipients owe $726,434 between them. That debt is being paid off at between $10 and $33 a week.

"One person collecting the invalid benefit owes more than $210,000, which is being recovered at between $15 and $43 a week.

"The top five debts incurred by people who fraudulently collected the invalid benefit total more than $920,000.

"This is appalling. The Government has had eight long years to get on top of the problem but has failed to take it seriously.

"How many times does Labour need to be told it needs to provide stronger disincentives to committing benefit fraud in the first place.

"Surely, that's Benefit Fraud Prevention 101."

Below: Answers to parliamentary questions.

16145 (2007). Judith Collins to the Minister for Social Development and Employment (Acting) (14 Sep 2007): What are the top five debts owed by recipients of the Domestic Purposes Benefit and at what weekly rate are these debts being recovered?


Hon Steve Maharey (Minister for Social Development and Employment (Acting)) replied: Corrected reply: I am advised that the five highest levels of debt owed by working age recipients of the Domestic Purposes Benefit at the end of August 2007 are: $199,983, $184,122, $182,598, $180,741, $149,178. These debts are all the result of benefit fraud. These debts are outliers and are not indicative of the amount owed to the Ministry by most clients with debt. Debt is currently being recovered at rates of between $20 and $45 per week. Weekly repayments are calculated as appropriate to each client's present financial circumstances, and as those circumstances change, the rate of recovery can change. Debt recovery continues throughout a person's lifetime. Where appropriate, the Ministry will investigate selling the debtor's assets to recover the amount owed. All cases of fraud are investigated and prosecutions commenced where there is sufficient evidence to meet the burden of proof required. Prosecution was commenced in four of these cases. Two cases resulted in prison sentences. One case is pending. One case was not prosecuted due to domestic violence related issues.

16144 (2007). Judith Collins to the Minister for Social Development and Employment (Acting) (14 Sep 2007): What are the top five debts owed by recipients of the Invalid Benefit and at what weekly rate are these debts being recovered?

Hon Steve Maharey (Minister for Social Development and Employment (Acting)) replied: Corrected reply: I am advised that the five highest levels of debt owed by working age recipients of the Invalid's Benefit at the end of August 2007 are: $210,128, $190,416, $186,958, $173,822, $159,669. These debts are all the result of benefit fraud. These debts are outliers and are not indicative of the amount owed to the Ministry by most clients with debt. Debt is currently being recovered at rates of between $15 and $43 per week. Weekly repayments are calculated as appropriate to each client's present financial circumstances, and as those circumstances change, the rate of recovery can change. Debt recovery continues throughout a person's lifetime. Where appropriate, the Ministry will investigate selling the debtor's assets to recover the amount owed. All cases of fraud are investigated and prosecutions commenced where there is sufficient evidence to meet the burden of proof required. Prosecution was commenced in four of these cases. Three cases resulted in prison sentences. One case is on Appeal.

16143 (2007). Judith Collins to the Minister for Social Development and Employment (Acting) (14 Sep 2007): What are the top five debts owed by recipients of the Unemployment Benefit and at what weekly rate are these debts being recovered?

Hon Steve Maharey (Minister for Social Development and Employment (Acting)) replied: Corrected reply: I am advised that the five highest levels of debt owed by working age recipients of the Unemployment Benefit at the end of August 2007 are: $193,491, $173,299, $128,901, $117,090, $113,653. These debts are all the result of benefit fraud. These debts are outliers and are not indicative of the amount owed to the Ministry by most clients with debt. Debt is currently being recovered at rates of between $10 and $33 per week. Weekly repayments are calculated as appropriate to each client's present financial circumstances, and as those circumstances change, the rate of recovery can change. Debt recovery continues throughout a person's lifetime. Where appropriate, the Ministry will investigate selling the debtor's assets to recover the amount owed. All cases of fraud are investigated and prosecutions commenced where there is sufficient evidence to meet the burden of proof required. Prosecution was commenced in four of these cases. Two cases resulted in prison sentences. Two cases are pending.

16142 (2007). Judith Collins to the Minister for Social Development and Employment (Acting) (14 Sep 2007): What are the top five debts owed by recipients of the Sickness Benefit and at what weekly rate are these debts being recovered?

Hon Steve Maharey (Minister for Social Development and Employment (Acting)) replied: I am advised that the five highest levels of debt owed by working age recipients of the Sickness Benefit at the end of August 2007 are: $200,095, $180,125, $154,957, $128,280, $127,985. These debts are all the result of benefit fraud. These debts are outliers and are not indicative of the amount owed to the Ministry by most clients with debt. Debt is currently being recovered at rates of between $15 and $46 per week. Weekly repayments are calculated as appropriate to each client's present financial circumstances, and as those circumstances change, the rate of recovery can change. Debt recovery continues throughout a person's lifetime. Where appropriate, the Ministry will investigate selling the debtor's assets to recover the amount owed. All cases of fraud are investigated and prosecutions commenced where there is sufficient evidence to meet the burden of proof required. Prosecution was commenced in all five of these cases. Four cases resulted in prison sentences, one case is pending.