National says new details show sloppiness over Cost of Living Payments
Wednesday, 21 September 2022
Inland Revenue gave Cost of Living Payments to 49,300 people who were only reporting investment income in New Zealand and made the payment to another 6629 people who it knew had overseas mailing addresses, National Party finance spokesperson Nicola Willis says.
The $350 Cost of Living Payments were unveiled in the Budget and are intended to help residents cope with the rising cost of living, but it had previously emerged that some people who should not have been entitled to the payments received them.
They included New Zealanders and foreigners on working holidays who had recently moved overseas.
Willis said documents newly released under the Official Information Act showed “just how sloppy the design and delivery of Labour’s cost of living payment was”.
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“Labour rushed this payment through, ignored the warnings from their officials, and now potentially millions of dollars have been wasted on people who should never have received the payment, including French backpackers and London lawyers,” she said.
A spokesperson for Willis said it was not categorically the case that none of the people identified in the OIA could have been entitled to the payments, but it was strong evidence they may not have been.
Finance Minister Grant Robertson said the figures showed a teething issue with the payments.
”That’s exactly why we asked Inland Revenue to re-look at the system, to make sure it did work properly,” he said.
“It’s the first time we’ve done a payment of that nature. We are going to have to work through issues as they arise.”
Revenue Minister David Parker announced in August in the wake of criticism of the management of the scheme by Auditor-General John Ryan that he had asked Inland Revenue to tighten eligibility checks for the second tranche of the payments which were paid on September 1.
The number of people receiving the payments dropped by about 54,000 after the tighter checks, which included IR screening for people who had accessed their myIR accounts from an overseas internet address and then asking them to confirm their eligibility.
But there are other reasons why some people’s eligibility might have changed between the two payment dates, aside from ineligible people being screened out.
Inland Revenue spokesperson Gay Cavill said people who earned up to $70,000 were eligible for the Cost of Living Payment whether their income came from wages, self-employment, investments or interest.
“The 49,300 people mentioned in the OIA had income through bank interest,” she said.
Although only people who were actually in New Zealand should have received the payment, having an overseas mailing address, as such, also did not disqualify people, she said.
“Payments were only made to people who have a physical address – as opposed to a mailing address – in New Zealand and who, according to IR’s records, paid tax in New Zealand and had a New Zealand bank account.”
”As far as Inland Revenue is concerned, people can have different mailing and physical addresses.”
Everyone being paid the Cost of Living Payments has a New Zealand address with Inland Revenue listed as their primary physical address, Cavill said.
But she said the additional screening meant that if IR had “less confidence that person is actually in New Zealand”, they would now not receive a Cost of Living Payment until they confirmed they were in the country.
Inland Revenue later clarified that the 49,300 people referred to in the OIA who only had interest income in the past tax year were people who had not had a finalised tax assessment at the time the first Cost of Living Payment was made, so would not have received it on August 1.
They could be entitled to the payment if they were, for example, stay-at-home parents, it noted.
The third and final $116.66 tranche of the Cost of Living Payment is due to be paid out on October 3.