Beneficiary debt reaches all time high

Beneficiary debt has reached an all-time high and all Ruth Dyson can do is offer excuses for her Government's woeful record on this issue, says National's Welfare spokeswoman, Judith Collins.

"The latest figures reveal beneficiary debt now stands at $763.8 million. That's a $300 million increase since Labour took office. Labour's own figures confirm that almost half of all working-age beneficiaries are in debt to Work and Income.

"Former beneficiaries owe $426.1 million while current beneficiaries owe $337.7 million. The debt owed by current beneficiaries increased by $15 million in just six months.

"The debt owed by women on the DPB has increased from $67 million in 1996 to almost $120 million today, even though fewer women are now receiving this benefit.

"In an environment of increasing demand for foodbanks, and when prices for things like food and petrol are going through the roof, Labour should be providing sound budgeting advice for beneficiaries. Instead, it is standing by and allowing beneficiary debt to spiral out of control.

"In 2000, Labour abolished the budgeting referral system that National set up in 1995. Now the Ministry of Social Development cannot even advise how many, if any, beneficiaries have received any budgeting advice.

"This sort of inaction can only lead to more beneficiaries in more debt, especially as Labour's economic legacy starts to bite."

Written Parliamentary Questions: 1531, 11509, 18715, 257


Sent: Monday, March 17, 2008 12:59:09 PM
To: Judith Collins
Subject: 01531

Question: What is the total amount of non-current beneficiary debt?

Portfolio: Social Development & Employment
Minister: Hon Ruth Dyson
Date Lodged:29/02/2008

Answer Text: I am advised that as at the end of December 2007, the total value of recoverable assistance and overpayments owing by all current clients receiving any form of financial assistance was $337,725,610. This figure includes all clients and their partners in receipt of a main benefit, as well as other forms of financial assistance, such as non-beneficiary assistance and New Zealand Superannuation. This definition is consistent with my response to written parliamentary question 16011 (2007).
The answer to written parliamentary question 86 (2008) provides the total value of recoverable assistance and overpayments, owing by clients in receipt of a main benefit only. This figure excludes partners and other forms of financial assistance, such as non-beneficiary assistance and New Zealand Superannuation.
The total value of recoverable assistance and overpayments, owing by all former clients (non current debt) as at the end of December 2007 was $426,135,760.
Please note that these figures include overpayments due to fraud.
This is also my response to written parliamentary questions 1532, 1535 and 1536 (2008).

11509 (2007). Judith Collins to the Minister for Social Development and Employment (28 Jun 2007): How many current beneficiaries are in debt to Work and Income and how much do they owe?
Hon David Benson-Pope (Minister for Social Development and Employment) replied: At the end of May 2007, 178,359 current beneficiaries owed $322.9 million. At the same time, 129,775 former beneficiaries owed $430.1 million.

18715 (2007). Judith Collins to the Minister for Social Development and Employment (13 Nov 2007): Has it ever been compulsory for Work and Income or any of its predecessors to provide budget advice to beneficiaries who request and/or receive the Special Needs Grant; if so, when was this requirement removed and why?
Hon Ruth Dyson (Minister for Social Development and Employment) replied: In 1995, there was a compulsory referral scheme to budget advice that applied to first-time applicants and beneficiaries applying for their third food-related Special Needs Grant within a period of 12 months. This ceased in 2000. Since that time, the Ministry of Social Development has expanded its focus on referring clients to budget advice. As part of Work and Income's case management practice, case managers refer any client they believe would benefit from budgeting advice – not just those first-time applicants and beneficiaries applying for a third food-related Special Needs Grant within a period of 12 months.

257 (2008). Judith Collins to the Minister for Social Development and Employment (12 Feb 2008): How many beneficiairies received budget advice in 2007; how many beneficiaries received the budget advice referred to as an employment intervention in the fourth quarter report appendices output plan 2006/07?
Hon Ruth Dyson (Minister for Social Development and Employment) replied: The Ministry of Social Development works with clients to ensure they receive appropriate financial assistance and are offered referrals to budgeting services. I am advised that the Ministry does not collect information on the total number of Work and Income clients that participate in budgeting advice services. For the number of beneficiaries who received the budget advice referred to as an employment intervention in the Fourth Quarter Report appendices 2006/07, I refer the member to page A-13 of the Fourth Quarter Report appendices 2006/07.