Consultation: Enabling MSD to more quickly use IR’s PAYE income information 

The Ministry of Social Development (MSD) and Inland Revenue (IR) are seeking feedback on plans to amend their Approved Information Sharing Agreement (AISA) to enable faster use of IR income data to adjust benefit entitlements.

Background

The Government has agreed for MSD to use PAYE income information from IR to assess eligibility and automatically calculate payment rates for its clients’ benefits and other income-tested assistance, and to charge clients’ PAYE income forward from the week they are paid by their employer. 

This work is in the first phase, which is improving the integrity of MSD payments by increasing the number of manual checks MSD carries out each year. From July 2028, the second phase will introduce an automated process that uses and applies PAYE income information closer to real-time. 

The aim of these changes is to more accurately pay MSD clients what they are entitled to receive, and in the second phase, reduce the burden on clients to declare their PAYE income to MSD, and to create less overpayment debt for clients. 

In order for these intended outcomes to happen, the AISA between IR and MSD needs to be amended. The proposed amendment will involve waiving an existing requirement for MSD to provide 10 working days’ notice for a client to dispute the accuracy of their personal information, when an adverse action (such as a client’s benefit being reduced or stopped) is being taken based on shared information. 

Removing the requirement will mean MSD can charge clients’ PAYE income as close to possible to when it is received, which will reduce overpayments of benefits being made and the likelihood of client debt. 

If the requirement is removed, MSD will introduce safeguards to ensure accurate information matching, prompt notifications, and the ability for MSD clients to challenge the information shared or the decisions made using that information. 

There are also existing inefficiencies with how child support income is charged against subsidies, which can cause hardship for clients. MSD can resolve this issue by amending the AISA to waive the notice period for child support income in relation to subsidies. 

It is also proposed that the requirement be removed to enable the Government to make decisions in the future to improve the responsiveness of subsidies to income changes. 

The first two changes would be expected to come into force in October 2026 to support phase one and resolve the child support income issue, with the remaining change following in July 2028. 

What's changing

The changes involve removing the requirement for us to give clients 10 working days to respond before we reduce or suspend a client’s benefit based on PAYE income information from IR.

Keeping the notice period would mean MSD could not use clients’ PAYE income information in a timely way when it is received from IR. This would mean the changes to income charging will result in overpayment debt being established for MSD’s clients.

Removing the notice period will help us ensure people are paid the right amount at the right time.

MSD and IR plan to implement safeguards to accompany the change. These are outlined in the discussion document on the MSD website.

Have your say

Public consultation is open from 20 April until 29 May 2026. You can read about the consultation on the MSD website. 

You can give us your views by either:

  • posting to: AISA Amendment, Ministry of Social Development, PO Box 1556, Wellington 6140, New Zealand.