Welfare fraud and reform

58 comments on “Welfare fraud and reform ”

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1. Thomas Beagle 1

   11 August 2011 at 9:45 am

   $22 million, gosh that’s a big number, you could pay for lots of hip operations with that!

   What percentage is that of the total benefits paid over that period?

   I suspect that number won’t be nearly as impressive.
   • Bored 1.1

     11 August 2011 at 10:05 am

     And your point is?

     From a straight business perspective if I let my accounts department over pay my suppliers $195 mlln for services not recieved and when investigated found that $22 mlln of that was for false invoices I would be firing the head of my accounts department. Its plain bad business. To let it get to that level of financial mismanagement on my watch would make me culpable. Sitting on this problem for 2 1/2 years as Bennett has is totally unnacceptable.

     If it continued the GM and the Directors would also get the boot. As a shareholder in NZ Inc. I hold Bennett, the PM and the the WINZ CEO responsible for this appalling performance. They should go.

     Come on Righties, lets get some real world business common sense on this appalling administrative performance. How would you treat the management team? Give them bonuses?
     • vto 1.1.1

       11 August 2011 at 10:11 am

       Yes, that is exactly what they do… when they mismanage they still get bonuses.

       Examples, Lachie McLeod at South Canterbury Finance and his $20m bonus when he was effectively fired for pushing the outfit off the cliff. All manner of bankers and wankers during and immediately after the GFC.

       Squash the small man and enrich yourself. Greedy wankers.

       but the sun of karma is rising and already above the horizon.
2. vto 2

   11 August 2011 at 9:49 am

   Yes, go on Bennett and Key, keep demonising these people. Tell them they are useless and ripping off the system.

   It will get to a point, if it hasn’t already, where these demonised people will feel like they have no stake in their society, they will have nothing to lose and no fear, and who knows what they might do ……………….
3. Wayne91 3

   11 August 2011 at 9:54 am

   I dont hear, read or see any demonising of people who genuinly need welfare payments, only those that are ripping off the system.

   22 million is not a trivial amount of money.

   Demonise fraud of any kind
   • The Voice of Reason 3.1

     11 August 2011 at 9:57 am

     Does that demonising include the fraudulent backhander to well known welfare bludger Warner Bros?
   • felix 3.2

     11 August 2011 at 10:02 am

     This fraud story isn’t the demonisation, it’s just setting the scene.

     The demonisation comes this weekend. And you’ll be cool with it ‘cos you’ve heard there’s quite a lot of fraud.
   • vto 3.3

     11 August 2011 at 10:04 am

     It is part ofa bigger picture, that is typically played out during the run up to an election, where concentration on things beneficiary is carried out to garner support for harder lines to be taken on these people. It is demonising these people. Surely you can see that, no?

     Also, $22,000,000 is not trivial true. So what do you call $1,500,000,000 that was paid out to South Canterbury Finance in what is turning out to be, if not fraud, then criminal negligence? Or how the nats let South Canterbury Finance into the deposit guarantee scheme when, as John Key has admitted, they knew from their first day of office, that the outfit was going to go bust? Why did Key and English let the company into the scheme after it was told it was going bust?????

     That is more fraudulent. And 70 times the size of this beneficiary issue.

     You see, it is exactly this type of “squash the small man and enrich ourselves” approach that is enraging the people. London burning anyone? You, Wayne91, would seem to be part of the problem with your lack of objective wisdom.
   • jackal 3.4

     11 August 2011 at 10:08 am

     Haven’t heard much from National re white collar crime… that fraud costs the country a hell of a lot more than a few beneficiaries rorting the welfare system, because WCC money is more likely to disappear from NZ. But why question your mates when you can demonize the poor?
     • The Gormless Fool formerly known as Oleolebiscuitbarrell 3.4.1

       11 August 2011 at 10:11 am

       “Haven’t heard much from National re white collar crime…”

       What tosh. I think you will find the victims of white collar crime will willingly and loudly complain, as they are the victims. As opposed to the state.
       • KJT 3.4.1.1

         11 August 2011 at 11:22 am

         White collar criminals seem to get Knighthoods, directorships and sinecure jobs rather than jail time.

         Brash and Shipley being good examples.

         Anyway. Why punish the 99.8% of beneficiaries who are not defrauding the system because of 0.2% who are.

         50% of the wealthiest people in NZ pay little or no tax.
         That is a massive fraud in itself.
         1/2 of our wealthiest are committing fraud. Whether it is legal or not!
         • The Gormless Fool formerly known as Oleolebiscuitbarrell 3.4.1.1.1

           11 August 2011 at 11:37 am

           What exactly is the white collar crime committed by Dr Brash?
           • KJT 3.4.1.1.1.1

             11 August 2011 at 11:57 am

             Not so much because no one has been silly enough to elect him to a position of real power.

             Accepting thousands a day in taxpayer benefits, to regurgitate the same economic voodoo, and work against the interests of the majority of those who pay him, is a fraud on the rest of us for a start.

             Whatever happened to working in the best interests of those who pay you.
             • The Gormless Fool formerly known as Oleolebiscuitbarrell …

               11 August 2011 at 2:22 pm

               So, another answer to my question would have been: there isn’t one.
               • KJT …

                 11 August 2011 at 5:50 pm

                 Last time I looked.

                 Someone working as a professional was criminally negligent if they did not work in the best interests of their clients.

                 Never been applied to politicians though. Too many would be convicted.
   • Deadly_NZ 3.5

     12 August 2011 at 7:12 am

     And what about Brownlee LYING to his collegues about how much he`said that the committee wanted, what a shock it must have been for him when the heard the`head of the panel saying that the 400 was enough and the Jabba had NOT spoken to him. Just a bunch of thieves and liars.
4. Psycho Milt 4

   11 August 2011 at 10:06 am

   So – benefit fraud of $22 million a year vs. Work & Income overpayments of $195 million and white collar fraud of $172 million. Which are the bigger problems here?

   Depends on which problem you’re interested in. If the question is “Which problem has a bigger impact on people’s attitudes to social welfare beneficiaries?”, then $195 mil of white-collar fraud remains utterly inconsequential in comparison to a mere $22 mil of beneficiary fraud.

   Likewise, if the question is “For which problem is the govt responsible for measures to prevent it happening?”, again the white-collar fraud is inconsequential. The govt’s role there is restricted to providing a regulatory framework and investigating fraud once it’s occurred. Taking measures to prevent it happening is the responsibility of individual organisations.

   As to the overpayments, the linked article reports $144 mil was recovered, which makes the bulk of the overpayments a mere administrative overhead. However, it leaves open the question of the overpayments that aren’t recovered. According to this story, as much as $50 mil of last year’s overpayments could go permanently unrecovered, ie stolen. That’s not small change.
   • Lanthanide 4.1

     11 August 2011 at 11:22 am

     “According to this story, as much as $50 mil of last year’s overpayments could go permanently unrecovered, ie stolen. That’s not small change.”

     I don’t think failing to be able to repay something you were paid in error is really “stealing”.

     If you go to WINZ and expect them to do their job properly, and they pay you more than you’re entitled to, it’s not really your fault, is it? If you are destitute and just scraping by and need every penny just to live, then it’s not surprising you’d have no ability to repay the ‘overpayment’ later. That doesn’t mean you stole it.
     • KJT 4.1.1

       11 August 2011 at 11:28 am

       How successful was the State services commission on recovering over payments to double dipton and over payments to MP’s for travel and expenses.
       Shane Jones was one of the few who paid it back, before they were caught.
   • Psycho Milt 4.2

     11 August 2011 at 12:04 pm

     I don’t think failing to be able to repay something you were paid in error is really “stealing”.

     The justice system differs with you on this matter.

     I recall when I was a beneficiary (long time ago now), Min SW kept sending me cheques for weeks after I got a temporary job. No fraud, just a failure of the bureaucracy. I didn’t cash the cheques, because it was fairly obvious someone would eventually discover the error and come looking for the money. If I’d said Nah fuck it, cashed the cheques and pocketed the cash, lived a bit less squalidly for a few weeks and told the Dept I was skint when they asked for their money back, it quite obviously and definitely would have been stealing.
     • weka 4.2.1

       11 August 2011 at 12:27 pm

       It’s different now though, because (a) money gets paid straight into bank accounts, and (b) WINZ have a really crap notification system (I’ve had increases to my benefit that I’ve never been notified of, I just see the change on my bank statement). While it’s true that beneficiaries are not entitled to spend the overpayments, the problem is that often it’s really hard to tell. WINZ are notoriously bad at telling beneficiaries what they are getting paid for. Anyone who applies for extra assistance may have no idea which bits they applied for have been approved. In that situation, even though someone is legally not entitled to the overpayment, it’s not ‘theft’ if they didn’t know.

       This is why it’s not being called fraud.
     • Vicky32 4.2.2

       11 August 2011 at 5:42 pm

       I recall when I was a beneficiary (long time ago now), Min SW kept sending me cheques for weeks after I got a temporary job.

       If they were sending you cheques, then you must have been a beneficiary in the 1960s! My Mum got her widow’s benefit the same way..
       Benefits have been paid into bank accounts since the 1970s, trust me, I know…
       • Psycho Milt 4.2.2.1

         11 August 2011 at 7:53 pm

         It was 1980/81. I didn’t have a bank account for them to pay it into, so I guess paying by cheque was the fallback position.
         • Vicky32 4.2.2.1.1

           12 August 2011 at 12:33 am

           I didn’t have a bank account for them to pay it into, so I guess paying by cheque was the fallback position.

           I really did not know that was even possible then!
   • Draco T Bastard 4.3

     11 August 2011 at 2:38 pm

     According to this story, as much as $50 mil of last year’s overpayments could go permanently unrecovered, ie stolen.

     Wrong. All over-payments are errors on the part of WINZ and a lot of them may not be worth recovering (ie, $10 overpayment and will cost $20 to recover) which is probably where most of the $50m comes from.
     • Psycho Milt 4.3.1

       11 August 2011 at 7:58 pm

       Yeah, right. Ask Cara Hurring whether the fact her over-payment was an error on the part of Westpac means she didn’t steal anything. And how hard is it to “recover” money from someone when you’re paying more money into their bank account every week? A $10 overpayment can be fixed immediately by a $10 underpayment.
       • Vicky32 4.3.1.1

         12 August 2011 at 12:42 am

         A $10 overpayment can be fixed immediately by a $10 underpayment.

         Which would be fine if they would do that! In fact that’s what they’re supposed to do when I declare earnings. But they many times have not, as it’s “much easier” to just add it to the debt..
         I would infinitely rather get a permanent job, and have done with this casual declaration of earnings nonsense, even if it was a rest home job paying $13.50 an hour, instead of the $30.00-45.00 I get teaching – if I could find one! 🙁
5. randal 5

   11 August 2011 at 10:15 am

   I never dreamed that they would put ME in the goon squad.
6. Wayne91 6

   11 August 2011 at 10:18 am

   vto – I dont care about the pollitics of it – as I said demonise fraud of any kind including those that you have mentioned – the moey paid out to SCF included.

   Interesting you have drawn a long bow from my opinion to the riots in London
   • vto 6.1

     11 August 2011 at 10:23 am

     I drew that bow because, as I explained above it is not about the $22m, it is about the upcoming election and getting votes. Anything that demonises these people, explicitly or implicitly as with this $22m issue, helps the nats.

     That demonsation and link to riots aint a long bow fulla. Why on earth would you think that?
   • insider 6.2

     11 August 2011 at 10:29 am

     Yes let’s prosecute the ones that set up and signed off the guarantee for SCF that led to the payout – Clark, Cullen and Cunliffe are first cabs off that rank.
     • felix 6.2.1

       11 August 2011 at 10:37 am

       Key has already admitted they knew SCF was going down the tubes from the first day he took office.

       And how many times did they sign off on it after that, eh?
     • freedom 6.2.2

       11 August 2011 at 11:15 am

       hey insider
       when labour signed on SCF, they were not (apparently) in trouble as a company.
       When National signed them on, and signed them on again, and again, they had emphatic statements from Treasury that SCF was going to collapse

       spot the difference?
       • Draco T Bastard 6.2.2.1

         11 August 2011 at 2:42 pm

         When National signed them on, and signed them on again, and again, they had emphatic statements from Treasury that SCF was going to collapse

         True but when National signed SCF back onto the scheme they also knew that SCF had most likely broken the terms of the agreement.
         • freedom 6.2.2.1.1

           11 August 2011 at 5:00 pm

           i have heard that but do not fully understand how? any layman explanation available ?
           • Draco T Bastard 6.2.2.1.1.1

             11 August 2011 at 7:46 pm

             Basically, to be in the guarantee scheme SCF had to maintain certain accounting/business practice standards which, by all appearances, they failed to do.
             • freedom …

               11 August 2011 at 7:59 pm

               okeedokee ty
         • vto 6.2.2.1.2

           11 August 2011 at 8:38 pm

           “when National signed SCF back onto the scheme they also knew that SCF had most likely broken the terms of the agreement”

           Draco, that’s fraud right there !

           And at $1.5 billion, it completely outweighs the Nats $22 million of welfare. Why are the Nats not chasing that and crowing about it?

           Anyone? A Nat supporter perhaps?
       • mik e 6.2.2.2

         11 August 2011 at 11:17 pm

         Freedom National also allowed SCF to continue to get bailed out after treasury told them they were breaking the rules of their contract allowing related companies to borrow plus the bank ran up another $800 million dollars in loans using the bailout money That shouldn’t of happened.
7. ak 7

   11 August 2011 at 10:27 am

   Don’t forget the whole definition of “overpayment” is highly debateable in the first place. Under the high complexity of benefit law, many so-called “overpayments” are contested and overturned. If, and it’s a big if, the beneficiary accused is aware of his/her rights, can be arsed going through the incredibly fraught process, or get access to support.

   Top post r0b: this is simple, typical, tory electoral demonisation as forecast here months ago. The big “recycled Brash” Maori-bash was a fizzer, so it’s back to the Benny-bash.

   Desperation distraction tactics from NACT as they run out of victims for their sordid divide-and-conquer, and their Money world collapses.

   Tory recta will be quivering today: the global ten-month dead-cat bounce has come to an end with a jolt. Wee Platitude Johnny’s recent “economic wizard” reassurances are going to look very sick in replay over coming weeks. Watch those dairy auctions.
8. KJT 8

   11 August 2011 at 10:31 am

   How much was lost in just one instance of white collar fraud by an ex National MP again?

   The fraud for which he got a whole 300 hours of community service.

   That is before we start on fraud by finance companies and the massive fraud that was 1980’s asset sales.
9. Oligarkey 9

   11 August 2011 at 10:33 am

   This really pushes my indignation button. Structural unemployment is built in to the failed/failing market model. This beneficiary-bashing is like setting up a maths test and grading it so 7% have to fail, then berating them for not trying harder. It’s irrational and nasty.
   • Campbell Larsen 9.1

     11 August 2011 at 10:56 am

     + 1
     I join you in indignation.
   • freedom 9.2

     11 August 2011 at 11:41 am

     + 1
     I join you in indignation and the math test is a classic example. I got off the Sickness Benefit a couple of years ago even though i can still qualify but the system was making my health worse. I can only work PT and most weeks earn less than i would if i was still on a benefit. Some weeks are beyond interesting when it comes to diet and general survival but i do not have the mind-buggerring stress of that soul-sapping institution to deal with every day.

     The medical costs to jump through hoops and the repetitive cycles of assesment were bad enough, especially when having to constantly retell a personally traumatic event to different people when most of your friends and family barely know the details. The final straw was when they changed the extra income structures. As an artist i would occassionally sell work and declare it. The figure was allocated against my annual income and the relevant deductions were made for a weekly amount. This is a fair and reasonable system as not all income for a beneficiary is a weekly PT job. Some unemployed people in IT fields for example will attest that an occassional contract does not equate to a weekly wage, but are more usually a lump sum.

     Then the wise old WINZ leaders decided that all extra income is taken as a weekly earnings and even if you only sold two pieces in a year that is your tough luck the amount stands for the week it was earned. So what you say? Before , when the work was appraised over an annual income the amount of secondary tax to apply was a lot less and the beneficiary actually saw some of their earnings they had worked for. When you take 70c out of every dollar earned, that matters.

     An example was a piece i sold for $600, the first $80 was ‘allowed’ then $520 was taxed at 70c in the dollar.
     $364 in tax as oppossed to the$7 previously taken against an annual amount.
     So how is this new system helping the beneficiary to get ahead? How does the new system encourage people to find work. how does it allow people to take opportunites that may only offer short term employmment? How is it anything but destructive to attitudes and aspirations?

     ( to those who actually read this and are thinking, hang on, if he earns less than the benefit, how is he on the net, that’s expensive’ Not that it is any of your business but I choose to live cheaply and my present rent every month is less than most pay weekly.)
     • Draco T Bastard 9.2.1

       11 August 2011 at 2:54 pm

       How does the new system encourage people to find work.

       It doesn’t. In fact, from what I can make out, it’s actually purposefully designed to prevent people getting ahead because if they actually benefited from their own independent work they wouldn’t be forced to work for someone else.
10. Wayne91 10

    11 August 2011 at 10:37 am

    vto – as I said, I dont see demonising of worthy recipients requiring welfare however you have said that I am lacking objective wisdom and that Londons burning and im part of the problem

    Very long bow.

    All I see in London now is “the poor man squashing the poor man” Very sad indead.
    • vto 10.1

      11 August 2011 at 10:50 am

      well if that’s all you see in London then you need to take your blinkers off.
11. KJT 11

    11 August 2011 at 10:42 am

    Interesting Graph on the Ministry of social development website. Steadily decreasing numbers on welfare during Labour’s 9 years after a steep increase in the 90’s. Steadily increasing under National.

    Anyone who is genuinely concerned about the rising costs of welfare would be voting Labour.

    But we are not really concerned about rising welfare costs are we? Just how much we can take from NZ society without giving anything back.
    Tax cuts for those who steal the most from our society are more important than having a fair, inclusive and decent society.

    Supported by all the little dickheads, who have such overconfidence in their own abilities, they support the wealthy, because they hold the delusion of one day becoming one of them.
    • Draco T Bastard 11.1

      11 August 2011 at 2:56 pm

      +1

      …they support the wealthy, because they hold the delusion of one day becoming one of them.

      This is the saddest part of our society.
      • freedom 11.1.1

        11 August 2011 at 5:10 pm

        what is really sad is the majority of those who make the decisions that motivate people of that ilk are themselves victims of the same delusion, usually by several factors higher. Take our PM, a man of some wealth but little more than a minnow in the foodchain of the global cartels.
12. Oligarkey 12

    11 August 2011 at 10:47 am

    Also – i’ve known many people to be under-paid by WINZ due to incompetence, or sheer meanness. i.e. not being back-paid when they should have been, then they’ve had to go in to debt, or get hauled through the tenancy tribunal for not being able to pay rent. I wonder what the number in dollars for this would be? Probably higher than 200 million. Of course it is unknowable, but should be taken in to consideration.

    Also – total government spending is around 65 billion. We’re talking something like 0.3% of total spending here, and this is headline news, while the global economy continues to collapse due to the faulty banking/monetary system and oil-supply shortage. Yet not a squeak from National or the msm as to how to fix these problems.

    National is failing us all badly, and wants us to focus our frustrations on the destitute, who are largely victims of a failed economic model which causes poverty and alienation. Shame on you National.
    • Wayne91 12.1

      11 August 2011 at 11:02 am

      Vto – I agree there are underlying reasons why London’s burning however the results that I have seen have been as I stated “the poor man squashing the poor man” Thats the really sad part of it.
      • freedom 12.1.1

        11 August 2011 at 11:53 am

        Wayne91
        we are not talking results we are discussing reasons. The result of a car hitting a brick wall is damaged masonry and dented steel. It does not tell you that the tyres blew out or the steering pin collapsed
        • Wayne91 12.1.1.1

          11 August 2011 at 12:37 pm

          Freedom – Yes you are right actually this thread is about Welfare fraud and reform – I digressed when I was told I was part of the problem for the London Riots
          • freedom 12.1.1.1.1

            11 August 2011 at 1:03 pm

            Hate to break it to you Wayne. you are part of the problem. I am part of the problem. We are all part of the problem, that is the whole point. The system that we live with is the problem. Forget about labelling it a generalization, it is a fact. A cold squelchy stinking fact that lurks behind the fridge and it will not go away and no-one wants to get their hands dirty sorting it out because they are not quite sure what else might be back there.
13. Vicky32 13

    11 August 2011 at 5:33 pm

    So, actual fraud of $22 million and “mistaken overpayments” of $195 million? What is going on? Let’s start with the overpayments.
    Overpayments of $195 million is business as usual. Last year the overpayment was $191 million.
     

    As I have said on another thread, these overpayments are mostly what even they call “technical breaches” – or “innocent breaches”… When staff fail to do their jobs properly, we get over-payments… I have an eye-watering debt because although I declared my earnings, the staff did not do what they’re supposed to do, and adjust my next weeks’ payments – they just added it all to my debt – as one of them blithely told me “It’s much easier!” (Yeah, for her..)

     
    • Draco T Bastard 13.1

      11 August 2011 at 7:51 pm

      I suggest taking that to a lawyer.

      Oh, and next time, take a concealed recording device to the interview.
    • Campbell Larsen 13.2

      11 August 2011 at 8:39 pm

      The ‘overpayments’ (or at least a sizable portion) are in essence structural debt i.e. Debt that occurs as a result of the systems in place. In balance I think many people do use part time income when on a benefit to offset the gap between the financial assistance received via the benefit and their actual costs. So in defense of your case worker her decision to not re over the money in a lump sum from your next payment was most probably the decision that many beneficiaries short on cash would prefer (though I appreciate the fact that preexisting indebtedness would give you other priorities)
      The leeway in the system works both ways – permitting a flawed system to operate and permitting people to live, albeit only just. However this is why persecuting people for breaches is so ridiculous. If the Govt really wants people to be on a declared income basis beneficiaries should be treated no differently from any other taxpayer and be able to run income minus expenses accounts over the financial year. This is my preferred option – I don’t see why beneficiaries costs are any lees real.
      If the Govt wants to manage the PAYE process proactively then it should do so and assume responsibility for payments through IRD – it should not use it’s information sharing solely for punitive measures. How stupid is it to have a system that can catch people out but won’t help them to avoid a problem in the first place?
      That is why the structural debt is necessary – it is helping to hide the bleak reality that many many people simple cannot afford to live and that benefit levels and our current pitiful minimum wage are a recipe for poverty.
      The real issue is the lack of jobs – I have no issue with short term indebtedness to WINZ and from a sociological perspective the same conclusion is easily reached, especially when the alternative for many is the predatory and unscrupulous finance companies.

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