Ministry warns no escaping IOUs

By Adam Bennett, NZPA

The Ministry of Social Devlopment is taking a hard line on those who owe it money, warning it will even seek repayment from estates following death. File photo / Thinkstock
The Ministry of Social Devlopment is taking a hard line on those who owe it money, warning it will even seek repayment from estates following death. File photo / Thinkstock

People who owe money to the Ministry of Social Development will be chased beyond the grave as the organisation looks to sharpen up debt collection.

Appearing before MPs at parliament yesterday, MSD's head of fraud Mike Smith said the department was owed more than $930 million by beneficiaries.

Half of that was due to overpayments, with the rest being largely interest free loans. Benefit fraud debt totalled $65.6 million with an additional $15.9 million being established last year - a big increase on the $11.1 million the previous year.

Mr Smith emphasised the ministry's commitment to reclaiming all debt, noting that, with regard to fraud cases in particular, it would chase the money to the last dollar.

The ministry would recover debt even when those who owed were in retirement. In the event they died, the department would seek repayment from their estates.

"No escape," he said.

Mr Smith said the ministry prosecuted about 800 people a year for benefit fraud and 95 per cent of those were convicted.

The ministry routinely undertook data matching and data mining programmes and last year checked 538 million records.

Meanwhile, a recent Auditor-General report found that while the department's debt collection system was not broken, there was room for improvement.

David Press of the Auditor-General's office said it was recognised MSD was "not a standard debt collection situation".

"You can't just send the heavies round to collect the money. The ministry has to take into account people's circumstances and it has a policy that repayment rates have to be realistic and not cause hardship."

Among the potential collection improvements, the report suggested using technology more efficiently to contact those who owed money, as well as reviewing which staff should be calling debtors, specifically looking at what skills were needed for the job to be done effectively.

Mr Smith said a number of the report's suggestions had already been taken on board.

- NZ Herald

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