Integrity Services
On this Page:
Benefit Control
Background
Benefit Control provides services to assure the integrity of the benefit system. We have an Intelligence-led approach to benefit fraud and abuse. This means we scan the environment for emerging and threats, use risk profiles to identify areas of vulnerability, and analyse the results of our fraud investigations for future work. This allows us to efficiently and effectively target clients who are most likely to commit benefit fraud and abuse. This approach addresses both the changing patterns of fraud and abuse in the system and emerging threats.
Any deliberate fraud will not be tolerated. In every case we actively recover all overpayments resulting from fraud and abuse, and prosecute clients where there is evidence of deliberate planned and premeditated fraud.
Trends in Benefit Control area cases investigated and overpayments identified
Tackling benefit fraud is an ongoing challenge. Over the last five years, the volume of cases investigated has reduced (see table 7.6), but the nature of many of the cases has become more complex and difficult to prove.
The number of fraud cases involving Domestic Purposes Benefit (DPB) increased slightly between 2004/05 and 2007/08, from 400 to 446, while the number of fraud cases involving Unemployment Benefit went down from 596 to 232 over the same period. This resulted in the proportion of fraud cases involving DPB increasing from 34% of prosecuted cases in 2004/05 to 47% in 2007/08. The proportion of fraud cases involving Sickness Benefit clients has also increased. There are a number of causes for these shifts in fraud cases, including changes to income support policy and changes in benefit population demographics.
From 2006/2007 to 2007/2008, the number of overpayments has reduced by 39%, while the value of these cases has reduced by only 20% and the number of completed prosecutions increased by 13% (see table 7.6).
Table 7.6 Trends in Benefit Control statistics1
| Financial Year2 | Number of Investigations and Reviews completed | Number of Overpayments established | Value of Overpayments ($) | Number of Prosecution Cases of Benefit Fraud completed |
|---|---|---|---|---|
| 2003/2004 | 53,631 | 9,845 | 50,048,006 | Not Available3 |
| 2004/2005 | 55,632 | 8,203 | 41,455,851 | 1,306 |
| 2005/2006 | 45,992 | 7,299 | 35,757,865 | 937 |
| 2006/2007 | 39,141 | 7,084 | 41,935,634 | 905 |
| 2007/2008 | 26,736 | 4,407 | 33,702,275 | 1,028 |
Notes
- Figures include all activities under taken by Benefit Control and include Benefit and Student Allowance and Loan cases.
- Financial years ended 30 June.
- Until 2004/2005, prosecutions were recorded as those cases referred to legal prosecutors rather than actual court cases. There were 1,720 cases referred for prosecution in 2003/2004.
National Data Match Centre
Background
The National Data Match Centre provides services to minimise errors, fraud and abuse of the benefit system by matching information with the following agencies:
- Inland Revenue
- Department of Corrections
- New Zealand Customs Service
- Department of Internal Affairs (matches with Births, Deaths and Marriages)
- Accident Compensation Corporation (ACC)
- Housing New Zealand Corporation.
Trends in data matching cases investigated and overpayments identified
Data matching activity has increased over the last five years (see table 7.7). Several new data matches have commenced, and some existing data matches have been extended to include students.
The number of data match cases completed has trended upward over the last five years. A peak in 2005/2006 resulted from a focus on processing large numbers of lower value overpayments (see table 7.7). During 2006/07 staff were diverted to process the new Identity Match (a fraud prevention measure which doesn't generate overpayment outcomes). As a result the number of cases completed and overpayments established in other matches in 2006/07 reduced. In 2007/08 numbers increased; this reflects catch up work that was done to ensure cases previously opened were completed within required timeframes. 2008/09 will see data match volumes return to sustainable levels.
Table 7.7 Trends in data matching statistics1
| Financial year2 | Number of cases completed | Overpayments identified Amount ($) |
|---|---|---|
| 2003/2004 | 36,639 | 28,981,505 |
| 2004/2005 | 43,139 | 30,265,125 |
| 2005/2006 | 62,639 | 29,404,188 |
| 2006/2007 | 39,123 | 19,012,850 |
| 2007/2008 | 67,838 | 31,316,452 |
Notes
- Financial years ended 30 June.
Balances Owed to the Crown by Clients of MSD
Background
Clients owe money to MSD primarily as a result of recoverable assistance loans or overpayment of benefit.
A recoverable assistance loan is money loaned to clients to help them meet immediate and essential costs. It is an entitlement and should not be confused with overpayments of benefit. Common reasons for the loans are:
- school uniforms
- accommodation costs
- whiteware purchases
- electricity and gas costs
- car safety seats.
Overpayments occur whenever clients receive financial assistance to which they are not entitled. The majority of overpayments occur as a result of variability in a client’s income which reduces their entitlement to benefit.
Trends in Balances Owed
The level of recoverable assistance loaned has trended upwards since 2003/2004 as clients faced rising costs and those in need accessed the extra support they were entitled to (see table 7.8). The value of overpayments has reduced $12m since 2004/2005 as a result of both reduced benefit numbers and efforts to prevent overpayments, while the value of repayments and write-offs is stable.
Table 7.8 Trends in overpayments, recoverable assistance loans, repayments and adjustments, and balances outstanding
| Financial year1 | Opening Balances outstanding at 1 July ($m) | Overpayments ($m) | Recoverable Assistance paid ($m) | Balance reduced by repayments or write-offs ($m) | Closing Balances outstanding at 30 June ($m) |
|---|---|---|---|---|---|
| 2003/2004 | 766.2 | 194.5 | 109.1 | -312.72 | 757.1 |
| 2004/2005 | 757.1 | 203.8 | 110.8 | -283.4 | 788.2 |
| 2005/2006 | 788.2 | 200.4 | 112.9 | -284.8 | 816.7 |
| 2006/2007 | 816.7 | 185.7 | 111.9 | -283.0 | 831.3 |
| 2007/2008 | 831.3 | 191.8 | 119.2 | -286.9 | 855.3 |
Notes
- Financial years ended 30 June.
- In June 2002, MSD gained Ministerial approval to write off aged balances where all avenues of recovery had been proven to be exhausted. The final write-off of these cases was completed during the 2003/2004 year.
Trends in clients with balances owed
The number of clients with a balance owing for recoverable assistance loans or overpayments has declined since 2005/2006 (see table 7.9). This is a result of lower benefit numbers and lesser values of overpayments in recent years. The number of clients owing liable parent contribution or maintenance balances continues to decline as these programmes have been defunct for many years. The number of clients with student allowance overpayment balances owed has been maintained at higher levels since 2005/2006. Data matching Student Allowance recipients with Inland Revenue commenced in July 2005 and has enabled a greater level of overpayment to be detected.
Table 7.9 Trends in the number of clients with a balance owed, by category
| Financial year1 | Recoverable Assistance Loans or Benefit Overpayments | Other Categories of Balances Owed | Total clients with a balance owed2 | ||||
|---|---|---|---|---|---|---|---|
| Current clients3 | Former clients4 | Liable Parent Contributions5 | Maintenance6 | Student7 | Employment Training and Assistance8 | Total | |
| 2000/2001 | 170,561 | 121,613 | 28,653 | 9,792 | 3,480 | 609 | 334,708 |
| 2001/2002 | 173,296 | 127,788 | 26,639 | 8,691 | 3,729 | 624 | 340,767 |
| 2002/2003 | 176,025 | 108,709 | 10,240 | 4,825 | 3,817 | 637 | 304,253 |
| 2003/2004 | 182,082 | 114,888 | 8,341 | 3,025 | 4209 | 101 | 312,646 |
| 2004/2005 | 185,551 | 123,931 | 7,219 | 2,607 | 4,208 | 96 | 323,612 |
| 2005/2006 | 189,561 | 126,513 | 6,430 | 2,253 | 10,834 | 113 | 335,704 |
| 2006/2007 | 178,496 | 129,219 | 5,679 | 1,977 | 8,925 | 99 | 324,395 |
| 2007/2008 | 181,701 | 124,832 | 5,002 | 1,747 | 10,616 | 98 | 323,996 |
Notes
- Financial years ended 30 June.
- The total number of clients with a balance owed may be overstated because of double-counting where a person has a balance owed in more than one category.
- Clients currently receiving financial assistance from Work and Income who have an outstanding balance of overpayment or recoverable assistance loan.
- Clients no longer receiving financial assistance from Work and Income who have an outstanding balance of overpayment or recoverable assistance loan.
- The Liable Parent Contribution Scheme ended in 1992. This number represents liable parents with arrears of payments.
- Administration of Maintenance Orders and registered agreements ended in 1992. This number represents Crown maintenance clients with arrears of payments.
- Clients with a balance owed as a result of overpayment of Student Allowance or Student Loan that is not transferred to Inland Revenue for collection.
- Clients with balance owed as result of having received employment-related grants and allowances. An example is Enterprise Allowance which is a temporary subsidy available to clients entering self employment while their business is being established. An overpayment occurs where the terms of the Enterprise Allowance agreement have been breached.
Composition of Balances Owed
Ninety-two percent of the total value owed is recoverable assistance loans or overpayment of benefit owed by both current and former clients (see figure 7.1).
figure 7.1 Total Composition of Balances Owed to the Crown at 30 June 2008
