Findings of review into suspension of some payments

Chief Executive Debbie Power said the review found two main issues – a gap in the legislation in relation to the treatment of Winter Energy Payments, and a processing backlog caused by underestimating how much work would be involved in implementing the annual checks on a range of clients.

“MSD has a long history of implementing important and complex legislation, including under short time frames, and doing a good job of it.

“That did not happen in this case. We did not meet the expectations we have of ourselves, or that others have of us. 

“I would like to apologise to everyone affected. Some people did all the right things but still had their payments suspended. 

“We know that even a short suspension of payments could have caused a lot of anxiety and trouble meeting costs.

“We've identified those affected, restored entitlements, and paid arrears.

“Understandably, there has been strong public interest in knowing how many people on a main benefit or receiving supplementary assistance were suspended due to the processing backlog. That wasn’t analysis we could immediately provide, but in the course of this review we reviewed 51,000 client files individually to establish this data.

In terms of the impacts on clients, in some cases the suspensions resulted in delayed payments. In other cases, suspensions were resolved before their next payment was due, and therefore had no impact on payments.  

Of those who had suspensions due to the backlog, there were:

• 2,460 clients receiving a main benefit, with an average arrears payment of $390
• 11,990 clients receiving supplementary assistance, including New Zealand Superannuation and Veteran’s Pension clients as well as non-beneficiary clients. Accommodation Supplement is an example of supplementary assistance. The average arrears payment was $140.

Analysis on NZ Superannuation and Veteran’s Pension recipients who had Winter Energy Payments affected had earlier been released, with 14,862 clients affected. That data has been updated as part of this review and now stands at 16,270 clients, with the highest arrears payment remaining at $301.06.

“We are committed to learning from this. We will be carrying out the review’s recommendations.”

“This has been about our implementation of the Mandatory Reviews Act 2025.

“The intention of the mandatory reviews is to ensure people are being paid at the right rate and getting what they are entitled to.

“It’s always been part of client obligations to keep MSD updated on their circumstances. What’s new is that starting in March, we are progressively carrying out checks for about 330,000 clients a year. To date about 137,000 reviews have been undertaken.

“If they don’t respond in time or provide the required information, their assistance is suspended. 

“The review identified two main issues.

“The legislation excluded an important clause. Winter Energy Payments shouldn’t have been suspended if NZ Superannuitants and Veteran’s Pension recipients didn’t complete their Confirming Your Circumstances (CYC) check in time. That exclusion from the legislation was on us. It was never the intention that their WEP was open to suspension.

“The review also found that MSD didn’t correctly forecast the workload involved in processing CYC responses from clients, and as a result backlogs built up.

“Fewer people responded using online forms than anticipated, and many more people than expected had changes in their circumstances to report. This meant staff had to spend longer working on each return.

“Around 80% of people who responded had a change of circumstances, compared to the one-third that was expected. These delays were compounded by an MyMSD email notification issue which meant email alerts advising clients that they had new correspondence was not sent as intended. This added to the workload. 

“The processing backlog was cleared in mid-August, we have allocated more resources for this work.  

“We expect that over time the annual Confirming Your Circumstances checks will take less staff time, as the first year’s checks are completed and clients’ circumstances are more up to date. 

“I’d like to close off by acknowledging again those of our clients who have been impacted. New Zealanders expect better,” said Ms Power.

Editors’ notes:

Assistance subject to a Confirming Your Circumstances review: 

• Supported Living Payment
• Accommodation Supplement
• Disability Allowance
• Ongoing Emergency Benefit or Emergency Maintenance Allowance
• New Zealand Superannuation (NZ Superannuation) and Veteran’s Pension with a non-qualified partner
• Orphan’s Benefit
• Unsupported Child’s Benefit

For more information, please see the Work and Income Website - Confirming your circumstances | Work and Income