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Chester Borrows

20 February, 2013

New tools to combat welfare fraud announced

Associate Social Development Minister Chester Borrows has today announced new measures to prevent, detect and catch welfare fraud.

“We know that the vast majority of beneficiaries are honest and do the right thing, but a small minority take advantage of the welfare system. Let’s be clear – welfare fraud is a crime, committed by criminals, for their own benefit at the taxpayer’s expense, and we treat it as such without excuse,” says Mr Borrows.

“National promised to clamp down on welfare fraud, and I’m pleased to deliver on that promise today.”

The first initiative is to amend the law to create a new offence targeting partners or spouses of beneficiaries who are convicted of fraud.

Relationship offending last year cost over $20 million and makes up one third of welfare fraud prosecutions. 

“Currently there are few options available to prosecute partners who know or benefit from such offending, leaving the entire debt with one partner,” says Mr Borrows.

“Prosecuting partners who profit from welfare fraud will ensure that both parties who profit from the crime are punished, and will help the taxpayer recover the lost money faster.”

The second key initiative is to introduce new ways of working with beneficiaries who have previously been dishonest with MSD.  These new measures include greater verification of information and less access to self-service transactions, and will cover around 1000 beneficiaries each year.

“This approach will give MSD a package of tools which can be tailored to target the way an individual has been dishonest before.  It is a sensible step to make sure that those who have ripped us off once cannot do it again,” says Mr Borrows.

The third new initiative is to formalise information sharing links between ACC, Inland Revenue, Housing New Zealand Corporation, New Zealand Police, and the Ministry of Social Development (MSD).

“Sharing information between Government agencies will allow us to detect or catch welfare fraud sooner.  Bringing these key agencies together will also help catch high value fraudsters whose deception extends across multiple agencies.

“It’s vitally important that the public has every confidence in the welfare system and these measures, alongside a range of smaller initiatives included in the package, will give MSD the tools it needs to achieve this.”

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