Friday, July 01, 2016

Increase in benefit fraud?

RNZ is reporting:

"Work and Income is owed $180 million from former and current clients who have defrauded the system - and that amount has doubled in five years."

Yesterday a journalist working on CheckPoint sent me some OIA data looking for comment.

I told him I've have never seen figures this big. That's because they represent cumulative debt. In the note it says: "The data has been produced from the Legacy Audit Trail (LAT) reporting. LAT information provides a fuller picture of debt owed to the Ministry and takes into account debt owed by current and former clients."

I advised that he look at this graph:

MSD is getting better at detecting fraud. Fraud detections doubled in 2013/14 because of MSD's IRD data-matching programme, It isn't getting better at recovering the debt. But I would be surprised if the behaviour of beneficiaries has changed particularly.

The second most common type of benefit fraud (after working while claiming a benefit) is people claiming a single parent benefit when they are in a relationship. In February 2014 MSD started a 12 month trial involving following up with 1,616 sole parent support clients to establish entitlement to a benefit.

Then, the Social Security (Fraud Measures and Debt Recovery) Amendment Bill passed into law in April 2014. It's purpose was "to make spouses and partners, as well as beneficiaries, accountable for fraud, and to enable the Ministry of Social Development to recover debt more effectively". Obviously not working yet.

Maybe he wanted me to say something derogatory about fraudulent beneficiaries to provide 'balance'. Because he didn't use any of my comment.


DIRK said...

I suspect many of those who committed fraud are still receiving benefits. Makes a mockery of a system which is talking tough on benefit fraud.

david said...

"The second most common type of benefit fraud (after working while claiming a benefit) is people claiming a single parent benefit when they are in a relationship"

This is the problem with means tested welfare. We ‘penalise’ people (ie reduce their benefit) when they take the very actions we want to encourage. In the process we build distrust and compromise the ability of the welfare services to actually help. Is there a solution short of a universal income? Perhaps rather than adjusting payments as circumstances change, the payment should be fixed for a period of (say) six months and then reviewed in the light of circumstances then. That would give a period where the recipient could benefit from improving their lot and thus the incentive to do so.

Anonymous said...

All benefits are fraud - all welfare is fraud - taking money from the few high-earning kiwis and handing it out to bludgers.

Benefits went up so fraud has gone up.

The only way to end fraud is to end welfare.