The Ministry for Social Development (MSD) is “concerned” that nearly one-in-four beneficiaries are not getting their correct entitlements.

Its latest annual report, the subject of scrutiny in Parliament on Wednesday, shows 77.6% of working-age benefit entitlement assessments were processed correctly.

That’s below the ministry’s target of no-less-than-95% and down from 82.7% last year. It means nearly one-in-four were getting incorrect entitlements.

“The direction for this KPI [key performance indicator] was off track,” the report said.

“This was due to case complexity, staff having to navigate multiple frontline systems and the need to strengthen our internal capability and quality supports. MSD has placed a focus on accuracy with a dedicated team working at a regional level with our staff and managers.”

Appearing before a select committee, chief executive Debbie Power said the ministry was “concerned about the accuracy number ... that has been declining for three or four years, if I am honest”.

She said the ministry had scaled-up significantly during the Covid-19 pandemic, employing thousands of people who take about two years to train to use the ministry’s “very complex” systems and understand legislative requirements.

“We have seen our accuracy impacted from probably about that time, if not earlier. We have done a lot of work to improvement plans, to pivot the resources we have, in terms of capability developers, to be focused on those core processes we know we are getting things wrong.”

Earlier, Social Development Minister Louise Upston accepted it was “challenging”, particularly when there are over-payments, which can lead to the client being in debt to MSD.

“I know how incredibly stressful it is, particularly when somebody’s work hours are irregular, and the benefit paid has resulted in an over-payment, they then get a debt. Absolutely, there is more work to do to improve the accuracy.”

She pointed to the Te Pae Tawhiti transformation programme, intended to modernise the ministry’s systems to make it easier for people to get support, which she believed will improve accuracy.

Social Development and Employment Minister Louise Upston at the social services and Community select committee hearing. Photo / Mark Mitchell

But the Greens’ social development spokesman Ricardo Menéndez March told the Herald more needs to be done to address a serious issue.

“At a time when benefit levels already sit below the poverty line, the consequences of not having your benefits correctly assessed are dire,” he said.

“You could be slapped with huge debt if you’ve been over-paid, or worse, leave families without the means to put food on the table or a roof over their heads.”

Under questioning from Labour’s Carmel Sepuloni, the former minister, Upston denied there were any staffing capacity issues affecting the ability to be accurate, saying efforts had been made to protect the frontline from any cuts.

But Sepuloni said she believed backroom cuts were impacting on the ability to be “timely and accurate with granting of benefits and ensuring people get access to what they’re entitled to”.

“What we know is that MSD lost 712 staff, sure they weren’t frontline, but that certainly puts pressure on frontline. On top of that, they’ve got over 30,000 more people on benefit in the last year, they haven’t got increased staff, and yet they’ve had more and more work put on them.”

She said the Te Pae Tawhiti upgrade needs to happen urgently and agreed that it would improve accuracy. There needs to be more financial commitment to that, Sepuloni said. Upston said it would be the subject of Budget approval.

Labour Party MP, Carmel Sepuloni. Photo / Hayden Woodward.

Menéndez March also asked Upston at the select committee how accurate MSD’s sanctions regime is, given there were issues with the accuracy of benefit entitlements.

The Government has made it clear it wants the ministry to fully enforce sanctions against beneficiaries not fulfilling their obligations, in order to incentivise them to find work.

More than 14,400 sanctions were handed down during the September 2024 quarter, which is up 133% from that quarter last year.

Upston couldn’t provide specific data around the accuracy of sanctions being applied, but said just 0.6% of clients were at the ‘orange’ level of MSD’s traffic light system, which is for those who aren’t meeting their obligations though are yet to see their benefit reduced.

At this point, beneficiaries can have conversations with the ministry to address any potential issues that may lead to a sanction being applied incorrectly, Upston said.

“That is the opportunity for the person who’s receiving a benefit to have a conversation with the staff at MSD and if there is any issue, that is when it is raised. I think the system is working because there is the opportunity for a conversation.”

Power said MSD didn’t “measure accuracy of sanctions per se”. She said there was a “big drop” between the number of people notified they had failed to fulfill an obligation and an actual sanction being applied. A sanction can be questioned, she said.

“We know that 84% of people, in terms of when they contact us, the sanctions are changed,” she said.

Green Party MP Ricardo Menendez-March asked about the accuracy of the sanction regime. Photo / Mark Mitchell

Menéndez March said it spoke to a “culture of cruelty rather than outcomes focused on human dignity”.

“There’s no evidence that sanctions meaningfully support people into employment, but we do know that they leave people without the means to survive. The Greens in Government would remove benefit sanctions, lift benefits to end poverty and ensure MSD is resourced to ensure people get their legal entitlements.”

Jamie Ensor is a political reporter in the NZ Herald Press Gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub Press Gallery office.