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Ministry of Social Development response to the Joychild report regarding the implementation of the Ruka decision


This report provides you with advice and preliminary comment on each of the recommendations of the Frances Joychild Report (Joychild Report). We agree, in part or in whole, with the majority of the reports recommendations and outline here the actions already taken, or to be taken to implement them. Where we disagree with a recommendation we have suggested an alternative where possible, and where not, we have outlined our rationale for disagreeing.


Auckland Barrister Frances Joychild was commissioned to consider and report on the implementation of the Ruka decision following commentary which suggested that our application of policy relating to relationships in the nature of marriage was inconsistent with the Court of Appeal's judgement in Ruka v DSW.

Ms Joychild has an extensive background in this area having represented the Auckland Women's Lawyers Association before the Court of Appeal when the Ruka case was being heard. In addition, to assist with the preparation of her report, we provided Ms Joychild with access to all relevant material and met with her on a number occasions to provide additional information and discuss issues.

We were pleased to note that the Joychild report concludes, amongst other things, that we are currently applying the correct legal test in documentation and investigations in relation to de facto relationships. The report also concludes that staff carrying out benefit control work have done so in good faith.
Ministry Policy on Relationships in the Nature of Marriage

Determining whether or not a relationship in the nature of marriage exists is one of the most complex assessments our staff are required to make. It requires an assessment to be made of all of a client's circumstances as well as those of his or her partner. The Joychild report notes that the law in this area is problematic and contentious. That is because the assessment as to whether or not a particular relationship is one "in the nature of marriage" fundamentally requires a subjective assessment to be made, based on the circumstances of the client. The difficulty of doing this is amplified by the reality that there is no one model of a "marriage type relationship" against which decisions can be tested.

The current legislation in this area is principally unchanged from that applicable at the time of the Ruka decision, and the difficulty in setting legal definitions around relationships in the nature of marriage was highlighted again during the recent debate concerning the Property (Relationships) Act 1976.

We always strive to ensure that our investigations are consistent with the law and policy and practice guidelines. Decisions made by staff are based on an assessment of the set of circumstances surrounding a particular relationship. In some complex cases however, the application of the law to a particular set of facts can give rise to differences of opinion as to the correct outcome or decision.

Our Legal Services Unit has responsibility for assessing the impact of relevant case law on the operations of the Ministry. An assessment of the Ruka decision was undertaken shortly following the delivery of the judgement of the Court of Appeal. Ad hoc instructions were issued to all relevant staff within a short time of that assessment being carried out. Those instructions were updated further last year (2000) and will be reviewed as required as the law in this area continues to develop.

The decision of the Court of Appeal in Ruka did not provide that domestic violence precluded the possibility of a marriage type relationship existing. Rather the Court held that in the Ruka case, the prerequisite features of emotional commitment and financial interdependence were missing and the relationship was therefore not a relationship in the nature of marriage.

Staff have to consider in every case whether or not the necessary ingredients of emotional commitment and financial interdependence are present. If there is violence in the relationship they also have to consider to what extent that violence affects the relationship's fundamental characteristics.

It is our opinion that Benefit Control Investigators are, as a group, mature and experienced staff. They are skilled at eliciting information from people and, where they suspect violence may be an issue, will do everything possible to canvass the effect that this may have on the relationship. Joychild also specifically states that her comments do not "… relate to the integrity of investigators and no reflection is cast upon them by [her] comments."

Because of the subjective nature of the decisions that have to be made when investigations into marriage type relationships are carried out, there will inevitably be scope for decisions to be questioned. We seek to actively work with clients and advocacy groups to assist any client exercise their review and appeal rights and often internally review a case where there is a suggestion that the client is not happy with the outcome of our investigation.

Investigators are required to establish that there is a sufficient evidentiary basis for any decision that they take. Cases referred for prosecution or which lead to the cancellation of benefits or overpayments being established are required to be proven to a high standard and investigators are required to look at all of the evidence, both for and against any particular decision, before making a determination.

Detailed Response to the Report's Recommendations

Recommendation 1

"That the Ministry undertake a review of the basis of the decisions to establish overpayments further to section 63(b) of the Act, in all cases decided between 1 November 1996 and December 2000 except where the beneficiary has been prosecuted or an appeal considered by the Social Security Appeal Authority.

The review to consider whether the prerequisite factors of financial interdependence and emotional commitment had been established satisfactorily in each case and whether violence, where it was evident, had been assessed against those factors. The review also to consider and deduct any 'notional entitlement'.

The review to involve notification to beneficiaries and consultation with them where additional facts are required before assessment can be made."

In terms of the notional entitlement issue, while present legislation does not allow for the backdating of benefits (which would be used to offset the debt established), following discussions with you we have put this issue on our policy work programme for more detailed consideration, and will report to you by 30 August 2002.

While we agree with the general intent of the recommendation to review s63(b) cases during the period in question, there are a number of issues that require further consideration prior to decisions being taken on this matter, including the potential impact on clients and costs. Following initial discussions with you regarding these issues we are undertaking further analysis and will report to you by 31 March 2002 on implications and options.

Recommendation 2

"The Ministry continue to update all staff resource documentation so as to give clear instructions to staff as to the correct legal test for a marriage-type-relationship. This will state clearly and unambiguously that there are essential requirements, which are financial interdependence, (meaning actual or a willingness to support if the need arose), cohabitation and emotional commitment. Reformulated checklists can still be included in the context of identifying whether these essential requirements have been made out. In particular:
• The indicator list in use as of November 2000 must be amended as above.
• The draft chapter on conjugal status - September 2000 - include at p. 57 that cohabitation is an essential requirement. There should also be a separate heading for Violence in a Relationship.
• Consideration is given to amending the relationship pamphlet to add case studies so as to give greater assistance to beneficiaries to understand what a Marriage-type-relationship might be."

We agree with all components of this recommendation, with the exception of amending brochures to reflect case studies, and the inclusion of cohabitation as an essential requirement when ascertaining a marriage type relationship.

It is vital that staff are provided with up to date information in a timely and accessible manner, and we are constantly striving (using a variety of means) to ensure that this occurs. Recently, this has taken the form of posting information on the Ministry's Intranet site to which all staff have daily access. Prior to this, we circulated information by way of a bulletin called "Grapevine".

While we provided training and circulated information about the Ruka decision within 2 months of the Ruka decision, we accept that ad hoc information distributed to staff should have also been incorporated into manuals and policy information. Having said that, we believe staff were aware of the relevant information and that generally it was taken into account when making determinations.

Our documents, manuals and brochures are now the subject of a quality assurance process involving our Delivery, Policy and Legal staff. In addition we consult beneficiary advocacy groups and other stakeholders. The current relationship documents and the Benefit Control Manual have all been through this quality assurance process and we will continue to review all documentation on an ongoing basis via routine reviews.

While we agree that financial interdependence and emotional commitment are essential requirements when ascertaining a marriage type relationship, and will amend documentation accordingly, we do not consider that cohabitation is an essential requirement. Two individuals may regard themselves as being a couple while not sharing living accommodation. A married couple, for example, does not cease to be married by reason only of the fact that one party lives elsewhere. As such, cohabitation is just one factor that we consider when assessing cases. It is important to note that each case must be assessed on its own merit.

In the Ruka decision, violence was a predominant indicator which affected the judgement on the financial and emotional components of the relationship of the parties. The fact that the parties only sporadically lived in the same home was a secondary indicator. For this reason, we are concerned that including a co-habitation requirement in the manual or in the relationship brochure will confuse clients who may mistakenly believe that they cannot be held to be living in a defacto relationship if they are living in separate dwellings.

When we last reviewed the relationship pamphlet in 2000, we considered the use of case examples but came to the conclusion that, while the case studies could serve to clarify the issue for some beneficiaries, the range of possible relationships is so great that the likelihood of confusion outweighed the advantages of using examples. The current pamphlets simply advise clients to contact the Ministry if they have a change in their circumstances in order to determine whether their benefit may be affected, however prior to the next reprint of the brochure, we will consult with key stakeholders and reconsider the use of case studies.

As a result of the Price and Hughes commentary our most recent brochure has been amended to include a separate heading and paragraph for individuals in a violent relationship, and our manuals have been updated to incorporate an amended indicator list.

Recommendation 3

"That all staff resource documentation is independently audited on a regular basis to ensure compliance with legislation and with relevant rulings of the Social Security Appeal Authority and the Courts."

We agree with the intent of this recommendation (to ensure the relevance and integrity of staff resource documentation is maintained) and, in part, are achieving it. The Joychild report notes that all our current documentation is compliant with legislation. To date we have achieved this by ensuring our Legal, Policy, and Service Delivery staff work closely in order to review policies and practices. With the recent merger of the two former entities into the Ministry of Social Development, and the co-location of the Policy and Service Delivery Groups, in the New Year, we expect that the robustness of this process will be further enhanced.

While we do not agree that a formal independent audit of staff resource documentation should be implemented due to cost implications and selection issues, we suggest that we continue to actively work with beneficiary advocacy groups to obtain independent advice on any proposed changes to our main benefit and supplementary assistance policy material, and associated documentation.

We hold regular meetings with the Beneficiary Advocates Consultative Group at which we discuss policy and service delivery issues. At these meetings the Advocates have raised a number of issues and we are constructively working through each in turn. Where necessary, we actively work with a sub-group of the Advocates on particular projects - an example of this is the current project underway investigating the administration of Special Benefit. The participation of Advocates in the process outlined above assists with the quality assurance and transparency of our system and processes. We do not believe additional processes are required in addition to this.

Recommendation 4

"That training of all investigators be undertaken and that such training be prepared and delivered with the input of experts in the field. The training would be for the purposes of assisting staff to:
• Appreciate and understand the dynamics of domestic violence, particularly the power and control dynamic, which incorporates battered women's syndrome theories, and financial abuse as a characteristic of violence.
• Recognise the signs and symptoms of a beneficiary who is experiencing domestic violence.
• Assess whether there has been a marriage-type-relationship where violence has been present.
• Understand Ministerial policy in respect to handling of cases where violence to women is evident."

We agree with this recommendation in its entirety, and have already contracted experts from the Women's Refuge to provide training for our Benefit Control Investigators. While the training programme will be ongoing, the bulk of our staff have now completed the programme with the costs of the training being absorbed within current baselines.

Recommendation 5

"That the Benefit Control Unit develop a policy relating to the handling of investigations where there is suspicion or knowledge that violence is an aspect of the relationship. It is recommended that such cases either be directed to a senior investigator to determine whether a marriage-type-relationship exists or a senior supervises all such investigations.

This policy would also provide that in all cases where violence has been a feature of the relationship the investigator must provide details of resources for the beneficiary including refuge contact details; counselling contacts, parenting support contacts, etc."

We agree with this recommendation and can now assure you that investigations where there is suspicion or knowledge of violence are escalated to Senior Investigators or Area Managers for supervision.

Our selection process for Investigators seeks individuals with empathy, maturity and life skills. The importance of being open and honest with clients is emphasised. Wherever violence is identified current practice requires investigators to discuss with clients options available to them and to broker support resources where appropriate.

Recommendation 6

"That all regional departmental offices establish a regular and ongoing liaison with local Women's Refuges so as to jointly review administrative practices in their areas relative to issues affecting beneficiaries who are victims of domestic violence. Consultation also takes place with the National Collective of Independent Refuges Head Office where national policies and protocols need developing."

We agree with this recommendation in its entirety and have already prepared a draft protocol which is currently with the National Collective of Independent Women's Refuges for comment and feedback. The principal stated aim of the protocol is to increase "the understanding of each other's role in promoting the right of women and children to be safe from family violence and in improving their employment and social outcomes". Once the national protocol has been signed off, each region will implement similar protocols with their local refuges. The national protocol is to be reviewed annually.

Recommendation 7

"That more robust checks and balances continue to be put in place to check the soundness and fairness of investigator decision-making. Specifically:
• A senior investigator audit all files where an overpayment of over $4,000 is established.

As a result of our discussions with Frances Joychild, but prior to her report being released, we implemented the practice of a senior investigator auditing all files where an overpayment of over $5,000 had been established and applied this policy to all beneficiaries. To change the threshold for this beneficiary group only would raise inconsistencies with all other beneficiaries, therefore we suggest that the threshold remain at its existing level of $5,000.
• A monthly random 10% audit continue to be conducted by a senior investigator of all other files.

We agree with this recommendation and will continue with the current practice. The results of the audit are also used as a measure of Investigator's performance.
• A benefit not to be cancelled until a senior investigator has reviewed the file and the beneficiary accepts the decision made. Otherwise cancellation occurs only after Benefit Review Committee review of the decision.

We disagree with this recommendation and note that in order to be equitable, it would need to include all beneficiaries rather than just those being dealt with in the Benefit Control area. Benefits may be suspended for any one of a number of reasons, and they are not suspended unless there is strong evidence to suggest there is no entitlement to that benefit. There is also a formal review process in place which the client can activate.

To only suspend benefits once a senior investigator has reviewed the file or the Benefit Review Committee has reviewed the decision would be very resource intensive for the Ministry (and therefore have significant associated costs). To continue to pay benefit where there is no entitlement would also result in a significant increase in the establishment of debt for clients.

Having said that, it is worth noting that in the Benefit Control area, decisions made regarding debt established in excess of $5,000 are checked by a Senior Investigator. This means that the majority of debts in the Benefit Control area are checked and the responsibility of junior Benefit Control staff is mitigated.
• That provision be made for urgency for Social Security Appeal Authority hearings once a benefit has been cancelled after review.

We agree with, and have implemented, this recommendation. In July 2001 we met with Social Security Appeal Authority and Department for Courts staff to develop a fast track process for urgent appeals. While it is outside our jurisdiction to order the consideration of appeals, it was agreed that in consultation with us, the Secretary of the Authority would monitor and facilitate urgent hearings where the circumstances of appellants make such action appropriate.

This process also includes appeals involving entitlement and benefit control decisions, and since July a number of appeals have been dealt with using this method. For example, we recently suggested that a benefit matter for an elderly person be put into the list at short notice, with the result that the appeal was heard in early November 2001, rather than the scheduled date in March 2002.
• The practice of cold calling be replaced by a system which notifies beneficiaries in writing of an appointment for an interview. The letter should advise that inquiries about benefit entitlement will be made at the interview and there is a right to bring an advocate or support person. Only in circumstances where the beneficiary does not respond should cold calling be undertaken.

We agree that the practice of cold calling is often a contentious issue, however we have recently reviewed this practice and consider that it is an effective tool in an investigation process and is an efficient use of resources. We have also found that we would be unable to meet current purchase agreement requirements if we were to cease this practice.

We have recently modified our practice in relation to both investigations and early intervention interviews. Our investigator now presents the client with a written explanation of their rights, including the right to have a support person present.

We consider that current practice should be retained.
• The letter notifying the beneficiary of the decision of a marriage-type-relationship was in existence, what the overpayment is and how much per week is to be paid back should have enclosed with it an easy to read pamphlet setting out how to take a review, what happens during it and contact details of local advocacy groups.

We agree with the intent of this recommendation, but need to undertake further work to assess its feasibility.

The letter sent notifying a client of the decision to amend,suspend or cancel a benefit or any associated overpayment outlines the review rights available to the client, and we have ensured that review brochures are available from all service centres.

In terms of enclosing brochures with letters, we have identified logistical issues in obtaining and updating the contact details of local advocacy groups in order to ensure the delivery of correct information to clients in each region. In addition, given that letters are generated to clients from both our centralised computer centre and local offices, there are technical and Quality Assurance issues to work through.

This issue is broader than the Benefit Control area and we will therefore provide you with a report outlining options regarding this recommendation by 31 March 2002.
• That legal training modules are developed and all members of the Benefit Control Unit undergo regular legal training based on them. Topics should include the impact of decisions of the Social Security Appeal Authority and courts, and concepts such as natural justice and fairness.

We are currently developing legal training modules, including a module dealing specifically with marriage type relationships and the concept of natural justice. The Ruka decision will be central to this training.

In addition, every Benefit Control Team has a solicitor available to staff for advice and guidance and the implications of Appeal Authority and Court decisions are made available to all staff by National Office.
• That the statutory power of the Ministry to impose a monetary penalty on a beneficiary be repealed. These punitive measures should be administered in a court system where there are inherently stronger checks and balances in the administration of justice.

We disagree with this recommendation. We consider that penalties remain effective in some circumstances as their use is intended to have a deterrent effect in cases of fraud. Penalties are only effective and used where there is likely to be a deterrent effect and, generally speaking, this is more likely to be the case in lower debt value cases and where clients are in a position to meet the penalty.

Having said that, we have moved away from general imposition of monetary penalties over the past few years. Since the 1997/98 year the number of penalties imposed has reduced from 2,800 with a value of $3.361m to 757 with an associated value of $400k in the 2000/01 year.
• That an independent complaints officer be appointed to deal with complaints against the Ministry similar to the Insurance and Banking Ombudsmen (the current external agencies are responding too slowly to be effective).

We disagree that there is a need for an independent complaints officer as there are a number of formal and informal avenues already open to clients in addition to their being able to raise complaints with our managers, commissioners and Chief Executive. These include:

• Benefit Review Committees
• Social Security Appeal Authority
• The High Court
• Ombudsman
• Human Rights Commissioner
• Privacy Commissioner
• Race Relations Conciliator
• Health and Disabilities Commissioner

• Members of Parliament
• The Minister and Associate Ministers

Recommendation 8

"That in its activities in the areas of benefit fraud investigations, staff training and community education, it maintain a dual focus. This requires attention to the need to ensure all New Zealanders in receipt of social security are treated with dignity, respect and equality with other citizens as well as the need to create an effective system to prevent, discourage, detect, investigate and create sanctions for those persons who are engaging in benefit fraud."

We agree with this recommendation. Our Benefit Control strategy encompasses the factors of prevention, deterrence, detection, investigation and sanction. In our view, it is essential that clients are treated with dignity, courtesy and respect in all aspects of the Ministry's work, including those activities associated with maintaining the integrity of the benefit system. These expectations are clearly set out in the Ministry's service charter, and we place great emphasis on ensuring that Benefit Control Unit investigators are recruited for skills such as empathy, maturity, and life skills.

Having investigation staff with these skills facilitates the effective implementation of our Benefit Control strategy, as they are well placed to emphasise the importance of being open, honest and transparent.

Recommendation 9

"That the Ministry develop an education policy and programme specifically for s.63(b) benefit fraud prevention and take proactive steps with beneficiaries to ensure clearer knowledge of the boundaries of a relationship."

We agree with this recommendation. Prevention of benefit fraud is one of the key components of the Ministry's overall Benefit Control strategy. We have adopted an early intervention approach in order to facilitate this, and also ensure that our clients understand their obligations following the grant of their benefit, particularly with regard to entering into a relationship in the nature of a marriage.

Benefit Control Units are currently working on an information sharing initiative designed to help clients understand their reciprocal obligations. Focus groups are held with clients several weeks after the grant of their benefit, in order to lift the level of understanding around obligations and entitlements. These meetings also provide an opportunity for us to respond to any issues that the client may raise.

Recommendation 10

"That the Ministry develop a well publicised model based on the "facilitation" process, as recorded in its manual, whereby beneficiaries commencing relationships are 'facilitated' through the transition from the benefit.

We agree with this recommendation. Many clients approach us during the early stages of a relationship in order to discuss their circumstances, and we actively work with them to determine what effect the relationship will have on their benefit entitlement, and to facilitate their transition between benefits and/or off benefit completely.

The key objective in doing this is to give the client as much information as possible, so that they are able to make an informed decision about whether to move into a relationship in the nature of marriage. At the same time, it is important to give the client a sufficient period of time to consider the consequences and talk it over with their partner. Case managers therefore negotiate a timeframe with the client (up to six weeks) to enable this to happen. Benefit Control staff regularly train Case Managers in the facilitation technique and rationale.

We encourage our clients through brochures, the case management process and other communications, to come and talk to us about changes in their circumstances, the impact that this has had on their entitlement and how we can help them. As well as this, we will be looking at training for case managers as part of the DPB reforms to ensure that they are fully aware of the implications of section 63(b), which will help them to clearly explain these to clients.

Recommendation 11

"The Ministry initiates regular consultations with a view to building a co-operative approach with community groups to the administration of social security system. Particular attention be paid to relationships with specialist beneficiary advocacy groups and women's refuges."

We agree with this, and are committed, at all levels of the organisation, to building strong and positive relationships with specialist Beneficiary Advocate Groups. Over the past 18 months, we have held regular fora at the national and regional levels (including a national advocates conference) with the advocates, which allows them to discuss policy and operational issues and concerns.

We will continue with this approach, and our Regional Operations Managers are to meet with lead advocates in their regions every 6 to 8 weeks, to discuss and address local operational issues. Matters of national significance will be referred to National Office for follow up action, and national policy meetings will be held with advocates 2 to 3 times per year. I have already met with the National Advocates to assure them of my commitment to this process.

Regional representatives are also meeting regularly with key community stakeholders in order to provide information and discuss issues of interest and/or concern. Key stakeholder groups include the following:
• Local Runanga/Iwi Groups
• Disability Groups
• Youth Advisory Services
• Grey Power
• Women's Refuge
• Salvation Army
• Methodist Mission
• Presbyterian Support Services
• Budget Advice
• Community Service Councils
• Community Law Centres
• Mature employment
• Food Banks

In addition, my Benefit Control staff have built solid relationships with a number of different groups and they have put effort and energy into building relationships with Benefit Advocates. Since 1997 Benefit Control have completed over 500 community talks to various community organisations including Women's Refuge, schools and other community groups.

Recommendation 12

"That Key Performance indicators be altered to focus on quality of investigations undertaken. Monetary target incentives be disestablished."

We have recently reviewed the monetary performance measures in the Purchase Agreement. Detection of benefit fraud has been the main emphasis in the past, and the performance measures tended to reflect that. However, in order to reflect Government's preferred direction of fraud control rather than a crime approach, and to address concerns raised by the Beneficiary Advocates, the Minister of Social Services and Employment agreed to amendments in the Vote Work and Income Purchase Agreement measures for 2001. Changes to performance measures are subject to negotiation with the Minister.

The change in focus from primarily detection to one that combines detection and a prevention/early intervention approach has resulted in the lowering of the Purchase Agreement targets from a return of $3.35 for every dollar spent in relation to overpayments, to $2.50 for every dollar spent. An additional measure of a return of $2.00 for every dollar spent in relation to prospective savings brought due to early intervention initiatives has also been included.

Monetary target incentives for Benefit Control staff are consistent with the performance-based approach to the salary system of our organisation. In such a system, clear targets are required in order to make objective assessments regarding individual's performance pay entitlements. Given the nature of work in the Benefit Control area, to date performance pay targets have been linked to the purchase agreement. When negotiating the 2002 Purchase Agreement we invite the Minister to suggest re-consideration of the performance measures, and a consequential revision of performance pay targets.

Quality measures for investigations are incorporated in both audit processes and the performance assessments for Benefit Control Officers. There is a 10% file audit for each investigator, all overpayments over $5000 are reviewed (using national standards), and all files that are referred for prosecution are also reviewed. This is to check that correct procedures have been followed in the course of the investigation (including the appropriateness of the methods used and the evidence obtained).

In addition, individual cases may also be subjected to the scrutiny of the Social Security Appeal Authority, Benefit Review Committees and Benefit Control solicitors and managers, all of whom will have to regard to the quality of the process.

The performance assessment framework and process for investigations staff incorporates qualitative measures to ensure that the correct and appropriate procedures have been followed, e.g. that prosecutions are prepared to the required standard, professional work practices are demonstrated and that appropriate attitude and behaviours are used in dealings with all people.

We will continue to look at ways to improve the interface between benefit control and service delivery, in particular to ensure that when cancelling benefit and establishing a debt, clients are given information and assistance to ensure that they are receiving non-beneficiary supplementary entitlements, as well as tax credit assistance.

Recommendation 13

"The policy issues relative to notional entitlement be assessed on an urgent basis with a view to clarifying section 81 via legislative amendment to provide the Ministry with the clear power to take account of the entitlement the beneficiary would have had to any other benefit when assessing an overpayment. Further, that it places an obligation rather than a discretion on the Ministry to do so and that it apply retrospectively to those decisions which it is recommended, under this review, be reviewed."

The Minister of Social Services and Employment has asked us to put the issue of notional entitlement on our work programme (report no 01/316 refers). We will be addressing this issue in the New Year. This work will include examining:
• the possible legislative options for amending the Act;
• the practical and evidential difficulties in having to retrospectively ascertain whether a client would be eligible for other benefits;
• the fiscal and administration costs of such an amendment; and
• how any inequality for those that have partners who work could be addressed.

We will carry out the work in consultation with other Government Agencies and the Benefit Advocates Group.

Recommendation 14

"That the Ministry develop a policy in relation to "debt burden" which removes the life time indebtedness which thousands of its beneficiaries are currently living with. That it uses, as a guide, the principles underlying the concept of 'reparation' in the Criminal Justice Act and as enunciated by the judiciary."

Under current legislation, the Government's ability to adopt policies that use write-off or suspension of debt as a mechanism to reduce hardship is limited. The current provisions only provide for:
• The Minister of Social Services and Employment and the Minister of Finance to write unrecoverable or uneconomic-to-recover debts off the Crown balance sheet (under the Public Finance Act 1989); and
• A provision in the Act that freezes the rate of repayment of a debt at the level prior to benefit cancellation for 91 days for sole parent beneficiaries going into work.

However, as part of the Social Assistance Initiatives package, we reported to the Cabinet Social Equity Committee on 7 November 2001 on a number of proposed amendments to benefit debt policy. The Committee noted that the current legislation limits government's ability to use debt write-off or suspension as a mechanism to encourage employment and tackle issues of social exclusion and poverty. The Committee also agreed, and Cabinet confirmed this on 12 November 2001, [SEQ Min (01) 26/5 refers] that a regulation-making power be included in the Social Security Act 1964 that will enable write-off/suspension of debt to be used to:
• Prevent debt accumulating while on a benefit, to assist beneficiaries to reduce their levels of debt and improve their ability to enter employment;
• Assist with the transition to work, so that beneficiaries do not face increasing benefit debt levels when they enter the workforce; and/or
• Provide a positive incentive to enter work or stay in work.

The legislative changes required will be made in the Social Security (Working Towards Employment) Amendment Bill which will be in the House in December 2001, for enactment by the end of July 2002.

In the meantime, we are aware of the difficulties that debt repayment can cause for some clients and we actively work to minimise these difficulties within the confines of the current law. When considering cases for hardship, the client's entire financial situation is taken into account, and we also check to ensure that they are receiving their full entitlement of supplementary benefits and family support.

Recommendation 15

"At the same time, as a matter of fairness and justice, it bring before the Courts for prosecution all cases of blatant fraud, where persons can be appropriately tried and if convicted, sentenced."We agree with this recommendation. We presently assess all potential cases for prosecution against a set of prosecution guidelines, in order to ensure that the right balance is struck between the need to deter benefit fraud, the interests of justice in the particular case and, very importantly, the impact of a conviction on the client.

We currently prosecute blatant fraud to the extent that resources allow. However, the time and resource required to bring cases to court is a considerable factor, and therefore we do have to make choices regularly on which cases are progressed to prosecution.


It is recommended that you
(a) note the contents of this report;
(b) agree to the following separate reports being provided to you by 31 March 2002:
• Implications and Options regarding recommendation 1 of the Joychild report; Yes/No
• Options for improving information dissemination to clients regarding contact details of Advocacy Groups etc; Yes/No
(c) note that we have put the issue of notional entitlement on our policy work programme, as per our discussions with you, and will report to you by 31 August;
(d) invite Officials to re-consider Benefit Control performance measures, and a consequential revision of performance pay targets, when negotiating the 2002 Purchase Agreement; Yes/No

Peter Hughes

Chief Executive