The Ministry of Social Development (MSD) and Inland Revenue (IR) have recently sought feedback on plans to amend their Approved Information Sharing Agreement (AISA) as part of the Child Support Pass-on initiative announced in Budget 2022.
From 1 July 2023 child support is going to be passed on directly to sole parent beneficiaries. Consequently, child support will be included as income for the purposes of calculating a person's benefit. IR provides child support information to MSD under the AISA.
Currently, the AISA requires MSD to provide 10 working days' notice when an adverse action (such as a person's benefit being reduced or stopped) is being taken based on the shared information. This allows the person time to dispute the accuracy of the personal information. The document proposes the 10-day notice period be removed to allow MSD to charge the child support payment as income as close as possible to when it is received. The objective is to avoid benefits being overpaid and reduce the possibility of a person ending up with a debt.
CA ANZ express concerns about the risks of error which may result in a sole parent beneficiary being underpaid.
According to CA ANZ, the need to carry out a data cleansing exercise prior to going live to help support higher data matching rates suggests there is a real possibility of child support payments being allocated to the wrong beneficiary. Sole parent beneficiaries are some of society’s most vulnerable and least able to afford a reduction in their benefit even for a temporary period.
CA ANZ recommend:
- MSD be required to notify the individual on the day the decision is made to reduce or suspend the specified payment and specify how the individual is notified;
- the simple process, methods and mechanisms that will allow clients to query a change should be specified in the AISA;
- the AISA should specify that MSD is required to rectify an error within 2 working days of it being identified;
- a review of the processes that will allow individuals to query a change in their benefit be carried out within six months of implementation to confirm that the processes are effective. Key performance indicators should be set to measure the number of errors that are being identified and the time taken to rectify.