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Fraud vs incompetence

Written By: - Date published: 7:10 pm, December 7th, 2010 - 28 comments
Categories: national, welfare - Tags: ,

The Nats like to talk tough about “benefit fraud”. This interesting investigation by ONE News certainly puts the problem into perspective:

Welfare errors cost taxpayers millions

Hundreds of millions of taxpayer dollars are being mistakenly handed out to beneficiaries every year, contributing to a debt of nearly $1 billion through the welfare system.

According to figures obtained by ONE News under the Official Information Act, the Ministry of Social Development has overpaid beneficiaries $191.6 million this year alone.

While most of this is because beneficiaries have failed to alert the Ministry when their living and financial situation changed, $47.8m comes from the Ministry’s own mistakes and administrative problems.

This figure is three times higher than what benefit fraud has cost over the same period.

Got that? Incompetence costs us three times as much as the fraud problem that the Nats love to bang on about.

I don’t for a moment think that this is a new problem, or one that we can blame National for. But two things. First, let’s now never forget that a lot more money can be saved by improving Ministry processes than by hounding all beneficiaries for the sake of catching the very few fraudsters. And second, this problem is going to get worse, not better, as the Nats go about cutting public sector jobs and “back office bureaucrats”. Yet another example of “penny wise pound foolish” incompetence from this government.

28 comments on “Fraud vs incompetence ”

  1. this problem is going to get worse, not better, as the Nats go about cutting public sector jobs

    The answer, though, isn’t so much more bureaucrats as better ones. Perhaps if the average “customer (sic) service (sic) officer” at WINZ wasn’t so young as to have never experienced struggling to raise a family and pay bills (beyond the one for their mobile phone), they’d not only treat their “customers” with more respect and understanding, but know what buttons to press to claculate the correct entitlement.

    (And BTW, for every beneficiary inadvertently getting too much there’s another not getting their correct entitlement. Just ask the Beneficiaries Union).

    I’d suggest WINZ trawl the queues of its “customers” and take on a range of people of all ages and backgrounds who know what it’s like to live life on the dole or the DPB. Contrary to popular belief, they’ll find most will jump at a job. An added benefit is that they’d be a wake up to the bludgers… when you’re on the dole and struggling, you soon notice those who are cruising along using it as a lifestyle choice to subsidise a bit of burglary or drug dealing.

    And punt a few of these – often quite condescending – youngsters into the queue, so they know what it’s like on the other side of the desk.

    • ghostwhowalksnz 1.1

      Rex , when was the last time you saw the inside of a Winz office.
      If anything the average age is older than you would find in any other office.

      • Zorr 1.1.1

        Would have to agree with ghost here. You have no clue whatsoever Rex. Full stop. I would go further, but really can’t. Lets just say that every day I work alongside people who have struggled/are struggling to raise families and find their way in life. I am one of the youngest in my office at the sprightly age of 27.

        • Rex Widerstrom 1.1.1.1

          Me personally… it’s been awhile I’ll admit. But one of my children presently has to deal with them, as does my ex. Their stories lead me to believe my perception is valid.

          Indeed a similar comment a few months ago was backed up by current beneficiary and regular Standard commenter vicky32:

          “Being treated like a work-shy simpleton by someone maybe half my age at WINZ, who then insists I go on a course to learn how to write a CV.”
          Yes, exactly! My experience when I applied for the dole right after losing my job, was of giving my CV to the ‘case manager’ and having her not even read it, until the end of the interview when she said “Oh, you were in works for years?” Well, no sh** Sherlock!

          Or her comment here:

          I suspect a lot of them are on power trips, but the main thing seems to be that they don’t have sufficient training!

          Or this from KJT:

          They have reverted to type since National got back in.
          I have supported a few teenagers through WINZ etc lately.
          These are not deadbeats. They are kids who would leap at almost any job offered.
          Yesterday after waiting in the queue for 20 minutes one was told. “You are 1 minute late for your appointment. Come back next week”.
          Staff are now exceptionally mean and contemptuous.

          Or this from Treetop:

          WINZ will disconnect you from your child/children.
          WINZ will disconnect you from any unpaid work you do in the community.
          WINZ will expect you to do outside home care without a car.
          WINZ will expect you to find child care when your child is sick or a teachers strike
          WINZ will expect your employer to alllow you time off to take your child to the GP.
          WINZ will expect you to supply a medical for a day off work.

          And so on, and so on…

          If I could be bothered putting in the effort to shatter your comfortable illusions by trawling other fora (or even delving deeper into this one) I could no doubt produce a lot more.

          Before jumping to defend your public service voting base (mickey) or your colleagues (Zorr) it might pay to find out about the perceptions of those who actually use the “service”. You’ll find they’re almost universally feeling patronised and dehumanised.

          But hey, you go right ahead backing the status quo so that when people like Matt McCarten come along, they have plenty of ammunition to use against the so-called “left” establishment.

          • Logie97 1.1.1.1.1

            It’s easy Rex to find instances you quote. True of most public services offices (Councils/WINZ/ACC)

            You will also find many who have nothing but good words for how they have been treated.

            Unfortunately you will also find a good number who treat the staff with utter disdain, are extremely demanding and diabolically rude and aggressive – who are venting their frustrations at the system on the person on the front-line.

            And then that clerk, without a break, has to assume a calm and supportive attitude towards the next client. (Probably has a floor manager tutting and strutting about, concerned at the back-log in reception…under pressure from his or her superior)

            “That Mrs Jones. You know she spends all day standing at her kitchen window. I can see her from my front room.”

            • Vicky32 1.1.1.1.1.1

              I have been on both sides, and I agree with Rex! When I worked for WINZ in the 80s, I was shamed by the things the bosses made me do (such as phone a man and demand to know which if any of the children named in his UB application were biollogically his – they all were, but the girls had their mother’s surname, not uncommon in the 80s) and phoning a woman and telling her my boss didn’t understand students and mixed-sex flatting and had decided that one of her male flatties must be her sex partner and so she should “seek financial support from him”.
              I was extremely glad to go on maternity leave!
              Now, I am being mucked around by call centre people who mess up regularly, because as at least two of them have confided to me, they don’t have training! The problem comes largely from the men, who I gather all feel that the job is beneath them, and are particularly hostile.
              As for face to face encounters – either I am invited to feel sorry for them with their job insecurity (as if!) or treated like a moron by people a fraction of my age.
              Vicky

          • The Voice of Reason 1.1.1.1.2

            “You’ll find they’re almost universally feeling patronised and dehumanised.”

            Patronised and dehumanised. Kinda like your attitude toward to thousands of modestly paid workers in the NZ public service, Rex. You can get the man out of NZ First, but, apparently, you can’t get the NZ First out of the man.

            • Rex Widerstrom 1.1.1.1.2.1

              I believe someone once said, in a similar situation, “Diddums”.

              Yes they’re underpaid. In fact part of my argument is that clearly more should be being done (like higher pay) to retain more experienced customer-facing staff at their posts rather than filling the seats with condescending youngesters.

              And yes, their jobs are thankless. And yes, like just about anyone who deals with “the public”, they sometimes cop it unfairly. So do bar staff. wait staff, taxi drivers… so do I, for that matter, from clients who prevaricate on decisions and then expect me to meet their deadlines by working all night.

              The difference is, those of us in the private sector can’t vent our frustration by demeaning and “punishing” our “customers” as some (but by no means all) staff at WINZ do.

              Acting like an utter s**t and getting away with it is a perk of the public service. I encounter it at court registries, fines enforcement offices, vehicle registration centres, benefit offices and similar places on a regular basis. There are, of course, some outstanding staff amongst them, but that doesn’t excuse the fact (and it is a fact… read the comments of the other “customers” on this thread) that some abuse their power, and are permitted to do so by the culture.

          • ak 1.1.1.1.3

            You’ll find they’re almost universally feeling patronised and dehumanised.

            Copacetic Rex. Every day, in every way; a massive well of continuous self-loathing and misery that manifests in horrific health and social outcomes. And their consequent reluctance to “beg” explains the massive unclaimed entitlements which continually stagger advocates and would dwarf “overpayments” and “fraud” if ever properly calculated.

            But don’t blame the Case Managers: the departmental culture-change since the 90s has been impressive – and the younger CMs are generally far better than the addled relics of Ruthenasia.

            Blame every sickening utterance from every demonising tory populist that ever lived and hammed concern for those “trapped” in “wefare dependency” that seeps into the pores of every beneficiary. Blame the lazy, partisan media that regurgitates their putrid, unfounded tripe: and blame those weak and insecure individuals who will eagerly ravage the latest officially-sanctioned scapegoat, feigning succour and practising starvation. Blame the piteous empathy-free caricature that could use the phrase “breeding for a business” – and who has promised with a smile and a wave of his blood-stained hand to include “welfare reform” in next year’s budget. And blame all the upstanding citizens and “opposition” who will shrug and look away.

            • Rex Widerstrom 1.1.1.1.3.1

              Blame…

              Fair comment. And if I had a “take them out and shoot them for free” day, I’d be working my way through those groups before I ever got to a WINZ case manager.

              And as I’ve said above, there’s some outstanding people amongst them. I even had one as my case manager. As soon as it became known he was prepared to go the extra mile, he was transferred out of a customer-facing role and into stats.

              But I’d also argue that yes, all those groups you’ve rightly blamed create an atmosphere whereby one can get away with treating beneficiaries inhumanely. But you don’t have to. It’s like the justice system, in which I work… most prison officers are just there to draw their pay; they don’t hate prisoners. They’re obstructive not because they delight in being, but because following the letter of the rule book is just easier.

              But that doesn’t lessen the impact their decisions and actions have on prisoners and their families.

          • DJames 1.1.1.1.4

            I think you’d find all WINZ staff would be able to do their job better if they weren’t so under-staffed and asked to make such weird bueraucratic backflips.

    • Vicky32 1.2

      The problem is, Rex, that it’s policy for WINZ not to employ what the staff call amongst themselves “Bennies” – (I worked for them in the 80s, but have been told this year, that they have a rule against employing anyone with a debt, even if said ‘debt’ is what they call an ‘innocent breach’ (i.e., the result of incompetence…) and no one who has *any* work at all whilst on UB can escape an ‘innocent breach’. I know all this because I specifically asked my ‘case worker’…
      Deb

  2. A 2

    Well, without some idea of the scale involved, it’s hard to tell what to make of this. Is there any reason to think that the benefit overpayments due to mistakes are out of line with similar practices in other departments or in the private sector? For example, my wife’s government department cannot seem to pay her salary correctly half the time.

    Without some genuine comparison and appreciation of the unique pitfalls involved in operating the benefit system how are we supposed to know whether this is evidence of massive incompetence on the part of the department as opposed to unavoidable waste, and if the latter is the case, then evidence of very low incidences of benefit fraud? We are, after all, talking about the biggest single income distributor in the country IIRC.

  3. Draco T Bastard 3

    Hundreds of millions of taxpayer dollars are being mistakenly handed out to beneficiaries every year, contributing to a debt of nearly $1 billion through the welfare system.

    Now that’s a nice bit of spin and misdirection isn’t it? Imply that the governments deficit is almost entirely due to the welfare system rather than the truth which is that the debt is entirely due to NACTs tax cuts for the rich.

  4. of course, the greater incompetence is that beneficiary numbers are still rising nearly two years after the recession ended.

    I don’t know if Bennett learned anything on her five week paid holiday in the US…. I mean ‘prestigious study course’ –

    her spin on the latest numbers is bad as ever, including a typo that makes the first sentence nonsense (http://www.scoop.co.nz/stories/PA1012/S00070/beneficiaries-still-finding-work-in-tough-times.htm “There are 2,250 fewer New Zealanders on Unemployment Benefits since November” um, these are the november stats, does she mean ‘since october’ or ‘since november 2009?’

  5. Descendant Of Smith 5

    Going back to my advocacy days I would suggest that it’s a bit simplistic to simply say it’s either fraud or incompetence. Many cases I worked with it was more down to the complexity of the system – it often put both clients and staff in a no win situation.

    Take an aspect such as annual charging of income. Based on last year all reasonable expectations of income for the year was that I would earn $8,000. I earn $8,200. This results in a debt at the end of the year of $200 * 70 cents = $140-00. I can’t see that that is either fraud nor incompetence.

    Trying to estimate your gross earnings for the week on an unemployment benefit was another case in point. If your earnings were variable you had to get these in by Friday to get paid correctly the following week. If you got it wrong you often got a debt – might only be a few dollars but multiply that over lots of people over a year and you’ll get a substantial total no doubt.

    Mistakenly giving net earnings rather than gross was also a common amongst people I worked with. Again these people weren’t committing fraud and would be horrified to think that such simple mistakes would be put down as fraudulent behaviour.

    Are Special Needs Grants and Advances included in those debt figures? That would make a substantial difference.

    And Rex for what it’s worth in my experience most staff are from the queues of the beneficiaries. I doesn’t know where you think they come from – some public service manufacturing plant perhaps.

    As a result I would suggest that they are diverse as the populations they come from and pigeon holing them is as idiotic as pigeon holing people on benefit – some of whom would be the last people you would want doing anything for you given their view of their own entitlement versus everyone else is a bludger. I’ve done advocacy work for some of these people and their self righteous indignation at not getting things cause they were not Maori, or black enough or not a New Zealander etc was a wonder to behold. If you want them dealing with you good luck!

    • Augustus 5.1

      Agree with that. I, too, am self-employed and have had to apply for a sickness benefit in the past. All rules pertaining to benefits are taylored for regular wage earners. The system is a shambles when you’re not one and necessarily results in over- or underpayments. There are also no checks at all on people who indirectly benefit from special needs grants, such as car repairers, dentists, landlords etc. (and power companies), that their charges are reasonable, and in my experience they take full advantage of that.
      But the main problem is a complex system beyond many CWs comprehension and/or lack of training, combined with incentives to be malicious.

  6. BLiP 6

    So, the MSM does Paula Bennett’s dirty work and puts the boot goes into the public service and beneficiaries yet again – meanwhile untold millions are being rorted by the rich and their dubious dealings. Where’s that story?

    Hon PETER DUNNE (Minister of Revenue) : I am aware that 9,700 families have been using losses from investment properties to reduce their family income and to increase their Working for Families entitlements, and that some families who structure their financial affairs through trusts are also claiming Working for Families tax credits, despite earning substantial incomes. For example, a family whose trust-owned company earned over $700,000 a year in taxable income was able to claim $12,000 in Working for Families tax credits. Working for Families tax credits are intended to support families in genuine need, not to boost the incomes of wealthy families like those. Therefore, the Government will change the law later this week to extend the definition of “income” for Working for Families purposes, to prevent such abuses continuing. This will make it fairer for middle-income New Zealand families, in particular, and for the taxpaying public, which foots the bill for these social assistance programmes.

    • just saying 6.1

      And so the bidding war for “middle” NZ continues in earnest.

      The way the parties are spinning the ‘plight of the middle’ you almost expect Oxfam to start moving resources from the starving in other parts of the world to provide emergency relief – even Dunne is getting in on the act.

      Apologies for butting in and treadjacking your perfectly valid post BLiP,
      I’m starting to get really angry.

    • joe bloggs 6.2

      what you mean is all credit to Bennett and Dunne for closing Labour’s loopholes

  7. Logie97 7

    Hallelujah. At last – now THIS IS a fraud/gerrymander being stopped that will gladden many hearts.

    http://www.stuff.co.nz/national/politics/4431965/Rich-ruled-out-of-Working-for-Families

    Husband and wife on modest incomes – children at university get diddly squat in support from the state and finish with massive loans debts.

    Meanwhile children of parents with the where-with-all to organise their finances with devious and dubious accounting have been able to claim student support grants.

    Looks as though Blinglish has caught up with you now. What a shame it won’t be retrospective though. Would be wonderful to see this administration pursue repayments with the same intolerance shown to beneficiaries’ overpayments.

    captcha – moral

  8. kriswgtn 8

    anti spam=Performance

    And what about these winz workers and their performance reaching topups they get???

    How many more millions are paid out to these clowns in performance bonuses? per year for refusing beneficiaries what theyre legally entitled to??

    thank hell i no longer have to deal with the clowns….
    but from the days when i was a bene – hah the stories I could tell, if it wasnt for people and orgs like DCM ( downtown city ministry and Peoples centre- these cocks would be walking all over beneficiary’s

  9. burt 9

    This is what I like about having Labour in opposition. Failures in bloated public service are criticised and debated.

    • bbfloyd 9.1

      burt, you are without doubt the dumbest, most ignorant wanker who’s posts i’ve had the displeasure of having to read. not the slightest attempt at reasonable debate… do you need to take drugs to stay as lucid as you are? (not saying much there).

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