Exclusive: Taxpayers $1 billion out of pocket because of overpayments to beneficiaries

Taxpayers are almost $1 billion out of pocket due to overpayments to beneficiaries by the Ministry of Social Development. 

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The Government argues most of the overpayments happened under National’s watch. Source: 1 NEWS

National is calling it shocking incompetence. However, the Government has pushed back, saying most of the overpayments happened under National's watch. 

Debt figures from 2014 to 2019 were released to 1 NEWS, showing cumulative overpayments had risen to $990 million to the 2018/19 year.

This was an increase of $222 million since the previous 2017/18 year, when debt sat at $767.8 million.

Prior to then, it had only risen $28.8 million from 2016/17, when it was $739 million, and it rose $30.5 million between 2015/16 and 2016/17. 

Figures obtained by 1 NEWS only go back to 2014/15 year, when the cumulative overpayment debt was at $673.8 million. 

National's Simon Bridges put the over payment rise down to the Government "making bad mistakes". 

"That's really hard on hard working taxpayers who are doing it tough. I think it's staggering incompetence by the Government. Ms Sepuloni needs to explain why over payments have shot up by so much, and how that's going to be fixed," he said. 

Social Development Minister Carmel Sepuloni disputed Mr Bridges' comments. 

"I'd have to say he's slightly incompetent saying that, given that it is a cumulative figure and so some of that debt was incurred under his government.

Despite the rise, debt owed due to fraud dropped down to $148.8 million, compared to $210.9 million in the 2017/18 year.

Ms Sepuloni said the ministry was now better at detecting overpayments - intervening and facilitating before it was deemed to be fraud.

"People often in part-time work, their hours fluctuate and change and that's often how the overpayments come about," she said. 

Auckland Action Against Poverty's Ricardo Menéndez March said "more and more people are owing money to the Ministry of Social Development", and that was putting families in hardship.