Summary of Underpinning Analysis: Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026

Good law-making: 9(i)

The importance of consulting, to the extent that is reasonably practicable, the persons or representatives of the persons that the responsible agency considers will be directly and materially affected by the legislation.

Inconsistency identified: NO

Summary of agency analysis

The two responsible Ministers, Minister for Social Development and Employment and the Minister of Revenue, are required to consult with the Privacy Commissioner and any person or organisation that the agencies consider represents the interests of the classes of individuals whose personal information will be shared under the proposed agreement (section 150) in the Privacy Act 2020 before recommending an amendment of the Approved Information Sharing Agreement between Inland Revenue and Ministry of Social Development (MSD). 

Inland Revenue and MSD analysed stakeholder feedback from public consultation which ran from 20 April to 29 May 2026 and advised that many of the policies and safeguards that have already been agreed for implementation by the Minister for Social Development and Employment, address areas of concern raised by stakeholders as part of the wider income charging work.

The Privacy Commissioner was consulted and considers that the proposed removal of the notice period is justified based on how MSD states the change will be implemented and the safeguards that will be put in place, provided that all recommendations in the Privacy Impact Assessment report are implemented in full. This report was produced by MSD and Inland Revenue and assessed the change against information privacy principles in the Privacy Act 2020 and the potential impacts. MSD and Inland Revenue have determined that the change is justifiable, and MSD intends to fulfil the recommendations in this report.

Good law-making: 9(j)

The importance of carefully evaluating:

• the issue concerned; and
• the effectiveness of any relevant existing legislation and common law; and
• whether the public interest requires that the issue be addressed; and
• any options (including non-legislative options) that are reasonably available for addressing the issue; and
• who is likely to benefit, and who is likely to suffer a detriment, from the legislation.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 is necessary to enable the Budget 2025 initiative to improve the accuracy and integrity of the MSD payments rates for clients’ benefits and other income-tested financial assistance (known as ‘income charging’). This change relies on PAYE income information shared by Inland Revenue and automation by MSD to calculate and pay the appropriate rate of benefit for MSD clients. 

This proposed change will enable wider income charging changes¹ via further legislative changes. The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 approves an amendment to the Approved Information Sharing Agreement between Inland Revenue and MSD (AISA) to waive a Privacy Act 2020 requirement. MSD is required to provide 10 working days to a client to dispute the information before MSD can use that income information shared by Inland Revenue. An amendment to the AISA is necessary because the current requirement prevents MSD from being able to use that information immediately. Observing the 10-working day requirement would mean MSD would need to pay assistance to a client before the shared income information from Inland Revenue can be used to calculate the correct 

rate of benefit, causing debt to be created in some circumstances where an MSD client’s income impacts their rate of benefit. Income charging will reduce the burden on MSD clients to declare their PAYE income and improve the accuracy of MSD payments. Removing the notice period would further reduce the likelihood of overpayments and client debt. 

The impacts of the change will be isolated to MSD clients that are applying for, or in receipt of, income-tested financial assistance administered by MSD. This includes:

• benefits as defined in the Social Security Act 2018, which includes main benefits and supplementary assistance
• Income-Related Rent, eligibility for the Public Housing and priority on the Public Housing Register.

The impacts of the change have been assessed via a Privacy Impact Assessment report produced by MSD and Inland Revenue against information privacy principles in the Privacy Act 2020 and the potential impacts and these agencies have determined that the change is justifiable provided MSD fulfils the recommendations in this report.

Waiving the 10-working day notice period requirement is the only way to reduce the likelihood of overpayments and client debt resulting from the implementation of income charging in July 2028. The proposed AISA amendment will waive this requirement.

[1] As well as resolve an existing issue in relation to child support income information from Inland Revenue and Income-Related Rent, Public Housing and the Public Housing Register.

Good law-making: 9(k)

The importance of the responsible agency identifying and developing effective arrangements for implementing the legislation.

Inconsistency identified: NO

Summary of agency analysis

MSD is progressing further legislative changes to implement wider income charging changes. The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 amends the AISA to waive the notice period requirement under the Privacy Act 2020 which enables this wider change and would allow MSD to use this information once it is shared by Inland Revenue. 

MSD is modifying the existing operational practices to support the elements of the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026  that come into effect from October 2026 and is developing policy, practices, IT systems and the necessary legislative changes to support July 2028 implementation of Income charging Phase 2. Safeguards are also being developed as part of wider income charging changes, such as ensuring prompt and comprehensive MSD client notification and improvements to the way that MSD clients can challenge the shared income information and the decisions they are used to inform.

Good law-making: 9(l)

Legislation should be expected to produce benefits that exceed the costs of the legislation to the public or persons.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 will enable the realisation of benefits expected from the wider income charging changes, with those benefits exceeding the costs associated with the legislative changes. As forecast in Budget 2025, when implemented the wider changes will realise $381 million in savings annually from July 2028. In addition to these fiscal benefits, the changes will reduce compliance obligations for MSD clients by removing the need to declare PAYE income to MSD and reducing the circumstances in which overpayment debt is established.

Good law-making: 9(m)

Legislation should be the most effective, efficient, and proportionate response to the issue concerned that is available.

Inconsistency identified: NO

Summary of agency analysis

The Privacy Act 2020 provides for the notice period to be shortened or dispensed with in certain circumstances, but doing so in relation to the MSD-Inland Revenue Approved Information Sharing Agreement requires an amendment to the AISA (section 153 of the Privacy Act 2020). 

Amending the Approved Information Sharing Agreement between MSD and Inland Revenue via the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 is the only legislative mechanism available to waive the requirement to provide affected individuals with 10 working days’ notice before Inland Revenue income information is used.  The amendment is therefore the most effective and efficient means of supporting the wider income charging changes, as it directly enables the intended information-sharing arrangements while making only the changes necessary to achieve that objective. It removes a procedural step that would otherwise prevent the wider income charging reforms from operating as intended.

Rule of Law: 9(a)(i)

The law should be clear and accessible.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 will make changes to the Information Sharing Agreement between MSD and Inland Revenue. This Agreement is written in plain English, and the amendment will involve publishing a consolidated version of this Agreement (including the changes made via this Order) on the Inland Revenue website, which MSD’s website will link to.

Rule of Law: 9(a)(ii)

The law should not adversely affect rights and liberties, or impose obligations, retrospectively.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not impose any requirements or adversely affect rights and liberties retrospectively.

Rule of Law: 9(a)(iii)

Every person is equal before the law.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 will apply to all MSD clients who are applying for, or in receipt of, income-tested financial assistance administered by MSD under the Social Security Act 2018 as well as Income-Related Rent, eligibility for the Public Housing and priority on the Public Housing Register.

Rule of Law: 9(a)(iv)

There should be an independent impartial judiciary.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

Nothing in the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 will affect the independence or impartiality of the judiciary.

Rule of Law: 9(a)(v)

Issues of legal right and liability should be resolved by the application of law, rather than the exercise of administrative discretion.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not delegate authority to an administrative body, such as a minister or a regulator, to resolve issues relating to legal rights and liabilities.

Liberties: 9(b)

Legislation should not unduly diminish a person’s liberty, personal security, freedom of choice or action, or rights to own, use, and dispose of property, except as is necessary to provide for, or protect, any such liberty, freedom, or right of another person.

Inconsistency identified: No

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 removes a procedural safeguard that would otherwise apply under the Privacy Act 2020. Specifically, MSD clients will no longer have the benefit of a 10-working day period to challenge the accuracy of information shared by Inland Revenue before that information is used to make decisions about the benefit or other financial assistance. This change limits an existing opportunity for clients to be heard before an adverse decision is made.  However, the limitation is considered necessary to support the wider income charging reforms and the timely administration of income-tested assistance.  Further it does not:

• alter entitlement criteria;
• directly remove a benefit;
• create a new liability;
• directly interfere with property rights.

Safeguards are also being developed as part of wider income charging changes, such as ensuring prompt and comprehensive MSD client notification and improvements to MSD clients can challenge the shared income information and the decisions they are used to inform.

Taking of property: 9(c)

Legislation should not take or severely impair, or authorise the taking or severe impairment of, property without the consent of the owner unless-

• there is a good justification for the taking or severe impairment; and
• fair compensation for the taking or severe impairment is provided to the owner; and
• the compensation is provided, to the extent practicable, by or on behalf of the persons who obtain the benefit of the taking or severe impairment.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not involve the taking or impairment of property.

Taxes, fees and levies: 9(d)

The importance of maintaining consistency with section 22(a) of the Constitution Act 1996 (Parliamentary control of taxation).

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not impose taxes, fees or levies.

Taxes, fees and levies: 9(e)

Legislation should impose, or authorise the imposition of, a fee for goods or services only if the amount of the fee bears a proper relation to the cost of providing the good or service to which it relates.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not impose, nor authorise the imposition of, any taxes, fees, or levies.

Taxes, fees and levies: 9(f)

Legislation should impose, or authorise the imposition of, a levy to fund an objective or a function only if the amount of the levy is reasonable in relation to both:

• the benefits that the class of payers is likely to derive, or the risks attributable to the class, in connection with the objective or function; and
• the costs of efficiently achieving the objective or providing the function.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 does not impose, nor authorise the imposition of, any taxes, fees, or levies.

Role of courts: 9(g)

Legislation should preserve the courts’ constitutional role of ascertaining the meaning of legislation.

Inconsistency identified: NOT APPLICABLE

Summary of agency analysis

The Regulations do not:

• exclude the court’s ability to judicially review decision-making
• exclude the court’s ability to make declaratory judgments
• introduce alternative appeal or review mechanisms
• interfere with a judicial process before the courts.

Role of courts: 9(h)

Legislation should make rights and liberties, or obligations, dependent on administrative power only if the power is sufficiently defined and subject to appropriate review.

Inconsistency identified: NO

Summary of agency analysis

The Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 removes an existing procedural safeguard by dispensing with the requirement to provide affected individuals with 10 working days to challenge the accuracy of Inland Revenue income information before that information is used in decision-making. While this engages considerations of procedural fairness, the Amendment Order does not create new administrative powers, expand existing powers, remove rights of review or appeal, or limit judicial review. Decisions remain subject to the ordinary review and challenge mechanisms available under the social security system.

Accordingly, the Amendment Order is not considered inconsistent with section 9(h) of the Regulatory Standards Act 2025.

Additional information 

Relevant publicly available inquiry, review, or evaluation reports 

To support the public consultation on the proposed AISA amendment, Inland Revenue and MSD produced a discussion document, which is available below. 

Inland Revenue and MSD will also publish a summary of consultation feedback at the same time as the proactive release of Cabinet advice seeking referral of the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 to the Executive Council.

Relevant international treaties, standards and obligations

The two responsible Ministers, Minister for Social Development and Employment and the Minister of Revenue, are required to consult with the Privacy Commissioner (section 150) and have regard to matters (section 149) in the Privacy Act 2020 before recommending an amendment of the Approved Information Sharing Agreement between Inland Revenue and MSD. Both of these conditions have been met. 

The impacts of the Privacy (Information Sharing Agreement between Inland Revenue and Ministry of Social Development) Amendment Order 2026 have been assessed via a Privacy Impact Assessment report produced by MSD and Inland Revenue against information privacy principles in the Privacy Act 2020 and the potential impacts and these agencies have determined that the change is justifiable provided MSD fulfils the recommendations in this report. 

MSD will also complete a Security, Privacy, Human Rights and Ethics risk assessment ahead of the July 2028 implementation of Phase 2.

Departures from the Legislation Guidelines

The Legislation Design and Advisory Committee (LDAC) Guidelines have been expressly considered, with specific regard to natural justice and procedural fairness.

The amendment removes the 10-working-day adverse action period, meaning clients will no longer have the opportunity to challenge the accuracy of information before it is used in a decision that may adversely affect them. This represents the removal of an existing pre-decision procedural safeguard.

While post-decision review and challenge processes remain available, new safeguards and mitigations will be developed, including processes for correcting inaccurate information, and review or reconsideration mechanisms where errors or inconsistencies are identified.