18 April 2023

Andre‘
[FYI request #21927 email]

Tēnā koe Andre‘

On  9 March 2023,  you emailed the Ministry of Social Development (the
Ministry) requesting, under the Official Information Act 1982  (the Act), the
following information:
  •  Debt management policy in relation to whether a debt established in
MSD systems is decided to be recoverable or not (or written off in some
cases).

•  Debt management policy in relation to court orders or attachments that
MSD may be compelled to deduct payments to recover external debt
from other agencies.

For the sake of clarity, I will respond to each of your requests in turn.
  •  Debt management policy in relation to whether a debt established in
MSD systems is decided to be recoverable or not (or written off in some
cases).

The following legislative provisions are the legal basis for the Ministry to impose
deductions on benefits for debts such as overpayments.
  •  Section 362 of the Social Security Act 2018 (SSA 2018) imposes a
legislative duty on the Ministry to “take all reasonably practicable steps
to recover sums that are specified as debts due to the Crown.”

•  Section 353  of the SSA 2018  sets out that regulations made under
Section 444 provide for recovery of sums specified as debts due to the
Crown, issuing of deduction notices, and other related matters.

•  Section 448 of the SSA 2018 allows for the Ministry to make regulations
on the remittance or suspension of debt.

•  Regulation 206  of the Social Security Regulations 2018 (Regulations)
specifies what it means to be a debt due to the Crown. It includes
identified overpayments, as per Regulation 206(f).

•  Regulation 207 sets out the exceptions to the Ministry’s legislative duty
to recover debts under Section 362 of the SSA 2018.

•  Regulation 209 provides that the Ministry must, in performing its duty
under section 362 of the SSA 2018 to recover a debt, determine from
time to time the rate and method of recovery. Regulation 209(2)(b)
provides that one of the recovery methods is to deduct all or part of the
debt from any amount payable to the person by the Ministry as a benefit
or a student allowance.

Attached at Appendix One is the Ministerial delegation to the Chief Executive
of the Ministry to write off debts.

The process to be fol owed in considering whether to write-off debt can be
found here, including a copy of the form:
www.workandincome.govt.nz/map/income-support/core-policy/current-
client-debt/process-for-debt-write-off-decision-01.html

Staff guidance on how to write-off debts created by staff in error can be found
here: www.workandincome.govt.nz/map/income-support/core-policy/current-
client-debt/accidental-debt-change-01.html

Under Section 391 of the SSA 2018, debtors have a right to seek review by a
Benefits Review Committee of a decision made by the Ministry to impose a
deduction or specified rate of repayment, if they disagree.

Under Section 397  of the SSA 2018, debtors have a right to appeal to the
Social Security Appeal Authority against a decision made by the Ministry to
impose a deduction or specified rate of repayment, if they disagree.

The Ministry  has  a process for implementing  deductions from benefits, by
providing guidance to staff in accordance with the Ministerial Direction on Debt
Recovery.
This is available online here:
www.workandincome.govt.nz/map/legislation
/ministerial-directions/debt-recovery-direction/index.html.

The following provides information to staff about the  processes for  debt
recovery for clients receiving ongoing income support assistance:
•  www.workandincome.govt.nz/map/income-support/core-
policy/current-client-debt/negotiating-repayment-of-debt-01.html
Page 2 of 5

•  www.workandincome.govt.nz/map/income-support/core-
policy/current-client-debt/debt-recovery-maximum-01.html
•  www.workandincome.govt.nz/map/income-support/core-
policy/current-client-debt/review-of-repayments-due-to-hardship-
01.html

See also:
www.workandincome.govt.nz/map/income-support/core-policy/current-
client-debt/current-client-debt.html

Attached at Appendix Two is a report titled Debt to Government: Comparing
IR and MSD’s approaches to writing off debt. This report provides a comparison
of the write-off powers that are available to Inland Revenue and the Ministry
when dealing with debt caused by the overpayment of Working for Families
tax credits and benefits, as well as recoverable assistance.

You will note that the information regarding some individuals is withheld under
section 9(2)(a) of the Act in order to protect the privacy of natural persons.
The need to protect the privacy of these individuals outweighs any public
interest in this information.

You will also note that some information has been withheld under section
18(c)(i) of the Act, as the release of this information would be contrary to the
provision of a specific enactment, namely section 18(3) of the Tax
Administration Act 1994.

Some Special Needs Grants (SNG) are non-recoverable on the basis of
discretion. SNGs are a kind of one-off assistance that can be granted to people
in hardship. The SNG programme outlines the parameters of the programme,
including which payment categories can be made non-recoverable. It can be
found in its entirety here:
www.workandincome.govt.nz/map/legislation/welfare-programmes/special-
needs-grants-programme/index.html

Operational guidance to staff on administering SNGs, including under what
conditions they should use their discretion to make a non-recoverable grant,
can be found here: www.workandincome.govt.nz/map/income-support/extra-
help/special-needs-grant/index.html
  •  Debt management policy in relation to court orders or attachments that
MSD may be compelled to deduct payments to recover external debt
from other agencies.

The Ministry of Justice (MOJ) has the authority to impose a civil attachment
order on a main benefit, in order to meet outstanding court fines or to pay a
creditor. An attachment order requires an employer or Work and Income (i.e.
when such an order is made against a main benefit recipient) to deduct a
Page 3 of 5

specified amount or percentage from a judgement debtor’s salary, wages, or
benefit. MOJ is responsible for making decisions regarding the granting of a
civil debt recovery order. But either party – i.e., the debtor or creditor – can
apply to MOJ to vary, suspend, or cancel that order.

More information about attachment orders can be found on MOJ’s website,
here:
www.justice.govt.nz/fines/about-civil-debt/collect-civil-debt/attachment-
orders/.

While responsibility for the imposition,  variation, or cancellation  of an
attachment order lies with MOJ, the Ministry has protocols for benefit
redirections made in accordance with such an order. These protocols relate to
a prescribed rate of protected earnings and determining the priority of various
types of benefit redirection.

Case  managers  must  not  make  deductions  of  more  than  40  percent  of the
client’s net income, and child support payments take precedence over all other
reasons for a benefit deduction, including a civil attachment order. This is
because clients have 60  percent  of their net income protected by law, and
certain types of redirections (such as child support) take priority when a benefit
recipient is subject to multiple orders and redirections.

The priority of redirection types is as follows:
  •  Child Support deductions made under the Child Support Act 1991
•  Inland Revenue tax deductions
•  Work  and  Income  debt  repayments  including  Liable  Parent
Contributions, child maintenance debts and Major Repairs Advances
•  Attachment orders made under the Family Proceedings Act 1980
•  Court  attachment  orders  made  under  the  Summary  Proceedings  Act
1957 – Court Fines
•  Court attachment orders issued under the District Courts Act 2016 –
Civil Attachment Orders
•  Student Loan repayments.

Where a benefit recipient has more than one order on their record, it is
sometimes necessary to determine the priority of those deductions. If the
amount of the deductions need to be reduced, in accordance with the protected
earnings rule, then adjustments are made to the lowest priority deduction type
first.

The Ministry does not have the authority to consider a challenge to a court
attachment order, but our staff are responsible for advising MOJ if, for any
reason, we are unable to load a deduction onto a client’s file or a discrepancy
or error has been identified. Furthermore, staff are instructed to advise clients
suffering undue hardship because of the amount of an attachment order that
they should contact the Registrar of the District Court for a reassessment of
Page 4 of 5

the payment rate or cancellation of the order. Out of concern for the client’s
right to privacy, however, Ministry staff would not usually contact MOJ about
such a client directly, but rather encourage that client to contact MOJ
themselves.

More information about the Ministry’s protocols regarding attachment orders
can be found here:
www.workandincome.govt.nz/map/income-support/extra-
help/accommodation-supplement/changes-and-reviews-accommodation-
supplement/court-attachment-orders-01.html

The principles and purposes of the Official Information Act 1982 under which
you made your request are:
•  to create greater openness and transparency about the plans, work and
activities of the Government,
•  to  increase  the  ability  of  the  public  to  participate  in  the  making and
administration of our laws and policies and
•  to lead to greater accountability in the conduct of public affairs.
This Ministry fully supports those principles and purposes. The Ministry
therefore  intends  to  make  the  information  contained  in  this letter and any
attached documents available to the wider public. The Ministry will do this by
publishing this letter on the Ministry’s website. Your personal details will be
deleted, and the Ministry will not publish any information that would identify
you as the person who requested the information.

If you wish to discuss this response with us, please feel free to contact
[MSD request email].

If  you  are  not  satisfied  with  this  response,  you  have  the  right  to  seek  an
investigation and review by the Ombudsman. Information about how to make
a complaint is available at www.ombudsman.parliament.nz or 0800 802 602.

Ngā mihi nui

Bridget Saunders
Issue Resolution Manager
Service Delivery
Page 5 of 5

Document Outline