After husband died of dementia, days later Work and Income demanded money

Work and Income is reviewing whether letters should be sent so soon after a death. Photo / Bevan Conley

A woman whose husband died of dementia had just picked up his ashes when she got a letter from Work and Income that offered condolences - but then demanded $1700 for an apparent superannuation overpayment.

After being contacted by the Herald about the case the agency says it's now reviewing whether sending debt collection letters within days of a death is appropriate.

The woman's husband had been in rest home care hospital-level care since 2015 with early onset atypical dementia, before his death on August 3, aged 72.

In a letter dated August 10 Work and Income told his grieving widow that she had to repay the debt, which she says she knew nothing about.

"We are sorry to hear of [your husband's] death and would like to offer you our sympathy," the letter began, before later outlining a debt totalling $1711.99 for "overpayment of New Zealand Superannuation", in periods dating back to July 2013.

Earlier that day the woman met a church minister about her husband of 27 years' upcoming memorial service, and later collected his ashes from the funeral home.

"It's not very nice going to fetch ashes on your own. I had to drive home with the ashes on the seat next to me. And on the self same day I open my mail and find this letter that says he has this debt of $1700."

It felt like trying to get "money from a corpse", she told the Herald.

"He died with no unfinished business, he didn't owe anybody a penny. And that makes me proud. He was a gentleman. And then something like this comes in and it makes you feel like you're some kind of a criminal."

Putting aside the timing of the letter, she was concerned about the validity of the apparent debt. Her husband's superannuation payments went straight to the rest homes he was in to pay for his residential care, which she was required to top-up, she says.

A visit to a local Work and Income office didn't shed any light on how the overpayment actually happened or what caused it. She was told letters had been sent to her previously, but says the staff member couldn't find records of these, and they don't appear on her own account when she logs in online.

"They are still not able to give me any sort of explanation that I find acceptable. And I can't check anything because I don't keep financial records for that long. We prided ourselves on living debt-free and I pay my bills usually as they are presented."

The situation had added stress at a difficult time. Her husband's memorial service last Friday couldn't be held because of level 4 lockdown, which has also denied her in-person support.

Jason Dwen, general manager of centralised services for the Ministry of Social Development (MSD), which includes Work and Income, told the Herald that the case could lead to changes.

"We appreciate this is a difficult time for [her] and accept the timing of our correspondence with her after her husband's passing added to her distress. We always strive to find ways to improve our practices, and are now looking at the timing of when such letters should be sent to clients so we can best ensure our communications with them do not cause further upset."

Dwen said a review of the debt had established that the overpayments in question relate to superannuation payments, specifically "extra income earned while on benefit, which meant her late husband was paid a higher rate of benefit than he was eligible for".

However, $188 of the debt was caused by a "processing error", a mistake Work and Income would apologise for.

"While we believe she was notified of the debt, we will work with her to find a way forward, and the best way the remaining overpayments can be recovered."

After this story was published, a MSD staff member rang the woman and apologised, and said the debts would be written off.

"All his and my assets were shared, they all pass to me on his death," the widow told the Herald. "And their policy is that they do not reclaim debts from the spouse. They say they would eventually have written them off as soon as they were told his estate has no assets.

"I never knew that and might have paid the debt - and my guess is most people would."