Enabling MSD to more quickly use PAYE income information provided by Inland Revenue

Overview

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.

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 forwards from the week they are paid by their employer. These changes are expected to come into force in July 2028.

This work is in the first phase, which is improving the integrity of MSD payments by increasing the 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 aims of these changes are to more accurately pay MSD clients what they are entitled to receive, and in the second phase reduce the administrative 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 as possible to when it is received, which will avoid overpayments of benefits being made and reduce the likelihood of client debt. If MSD cannot use clients’ PAYE income information in a timely way when it is received from IR, then the changes to income charging will result in overpayment debt being established for MSD’s clients.

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 of these 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.

Accessible formats of the guidance document will be available soon

Public consultation is open from 20 April until 29 May 2026 and you can give us your views by completing this online survey, or by providing a submission.

Submissions can be made by emailing AISAconsultation@msd.govt.nz

Or send your response to:

AISA Amendment
Ministry of Social Development
P O Box 1556
Wellington 6140
New Zealand

Submissions may be the subject of a request under the Official Information Act 1982, which will result in their publication unless there are grounds for the submission (in whole or part) to be withheld. The withholding of responses on the grounds of privacy, or for any other reason, will be determined in accordance with that Act. If you consider that any part of your submission should properly be withheld under the Act, please clearly indicate this.

Submissions will be shared with the Minister for Social Development and Employment, and Minister of Revenue where MSD and IR believe it is appropriate, to inform the AISA amendment.  Any information shared with those Ministers or agencies will be transferred to them securely.

Opened 20 April 2026

Closes 29 May 2026

Contact

Email us at AISAconsultation@msd.govt.nz