The Social Development Ministry has apologised to a grieving widow who was paid the wrong pension and then placed on "stand-down" after her husband died.
The family say a Work and Income officer also wrongly disclosed confidential personal details about the family to a funeral director.
The ministry's general manager of senior services, Lindsay Meehan, rang the widow and her daughter to apologise after the Herald made inquiries, and said the ministry was investigating the case.
"We have handled [the] case poorly and I sincerely apologise," he said.
The Te Awamutu widow, who does not want to be named, was 63 when her husband died aged 67 in May. Her husband was born with a heart defect that got progressively worse as he grew older, and his wife was his full-time carer for his last 15 years.
"The last six months it's been pretty intense," she said, choking back tears.
The husband and wife lived on the couples' rate of superannuation, but because she was not yet 65 she lost eligibility when her husband died.
The ministry's policy is to keep paying the full couple rate for 28 days when one spouse dies, but the wife was not advised that she needed to apply for a new benefit.
The couple's daughter, Wintec lecturer Tina Booth, complained after a series of errors that began before her father's death when a Work and Income officer advised her that the family would qualify for a $1900 funeral grant. This advice was repeated after his death when Ms Booth first applied for the grant.
The family planned the funeral allowing for the grant, and Ms Booth felt humiliated when she went back to Work and Income with the final application and was told the family did not qualify.
Later, the funeral director told Ms Booth that she had been into Work and Income about another client and was told things about Ms Booth's family - "about me personally, my family, my extended family's personal life, my father's financial status, my father's request history for financial support at Winz, and the funeral grant application".
The ministry also overpaid the widow by $344 three weeks after her husband died, then sent letters and made phone calls demanding repayment of this "debt" she did not know she had incurred.
Her payments were then erratic and she was finally told she had been "stood down", forcing her to rely on family for support.
Mr Meehan said the ministry let the widow and her family down during a very tough time. She now has a jobseeker support benefit that recognises the depression she suffers.
"We are also reviewing how we manage a person's benefit when their spouse passes away to help avoid these types of mistakes from happening again."
• Wrong advice on funeral grant.
• Personal information disclosed to outsider.
• Erratic and incorrect payments.
• Widow placed on "stand-down".