Crackdown on welfare fraud

A new law has been made to stop welfare fraud.

A new law has been passed that now holds spouses and partners of beneficiaries, accountable for welfare fraud or dishonest overpayments.

The Social Security (Fraud Measures and Debt Recovery) Amendment Bill changes the Social Security Act 1964 and was passed through Parliament 102 votes to 17.

The original bill stated the beneficiary was liable for all debt and any criminal conviction if caught committing relationship fraud while receiving Sole Parent Support.

In the past financial year, Rotorua District Court saw 24 welfare fraud cases, adding up to more than $1 million in fraudulent overpayments.

While this was a decrease from 2012, it was still one of the highest number of cases per capita in the central North Island.

Associate Social Development Minister Chester Borrows told the Rotorua Daily Post partners who previously turned a blind eye to welfare fraud, would no longer be able to "get off scot-free and avoid repaying the debt".

"Relationship fraud involves a hell of a lot of money so this bill will ensure it is not just the beneficiary carrying the debt and being liable for criminal charges."

Mr Borrows said there will be cases exempt from this new law such as beneficiaries with violent partners as their relationship is not considered normal. "We received a lot of feedback from Women's Refuge about women in violent relationships and assured these cases will be exempt from this bill as their partnership is not recognised as a normal, functioning relationship."

A Waiariki Women's Refuge spokeswoman said she feared this bill would incite more violence and less women seeking help. "Last year we received 250,000 cases, but we know this is only a fraction of women who need help. This bill will potentially cause even fewer women to come to us because they are scared of the trouble they may get into."

The spokeswoman said when cases were referred to the Waiariki Women's Refuge they had already broken away from their abusive partners and would not be receiving any additional financial support from the terminated relationship.

The bill will drive tougher background checks on low-trust clients and require higher levels of proof of their situation before being approved for financial support. "The vast majority of people who are on the benefit need it, are not ripping off taxpayers and are doing their best to make ends meet. It is a small percentage of fraudsters who are giving the rest a bad name," said Mr Borrows.

The bill comes into force on July 7.