10. JUDITH COLLINS (National—Clevedon) Link to this
to the Minister for Social Development and Employment
Why has he allowed benefit debt to increase to three-quarters of a billion dollars, which is a 65 percent increase since 1999?
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) Link to this
The member will be aware that in 1999 this Government inherited a benefit debt of $450 million from the previous National Government. I can inform the member that the amount is increasing at the same rate as it was when National was in Government. The member will be fully aware that the reason for this is that the Government does not write off debt as the private sector does. I can advise the member, however, that the amount of debt being established under a Labour-led Government, excluding recoverable assistance, has fallen from 1.61 percent of total benefit expenditure in 2001-02 to 1.29 percent of total benefit expenditure in 2005-06. I can also advise that the amount of debt being recovered per year currently stands at $261 million.
How much of the $750 million debt is due to fraud and abuse of the benefit system, as opposed to overpayments?
Hon DAVID BENSON-POPE Link to this
Because of the way that the debt balance is collected, I cannot provide the member with that information at this time. I will be able to do so in the new year. But it is quite important to reinforce the statement I have made to the member on a number of occasions in this House that the ministry has an absolutely zero-tolerance attitude to fraud. It is equally important to point out that a large proportion of this debt is in fact recoverable debt, and that, unlike that member’s party, this Government remains committed to assisting people in need.
Steve ChadwickHon DAVID BENSON-POPE Link to this
I can advise the House that there is much less benefit fraud today than there has been in previous years. The number of allegations of benefit fraud has fallen by over 36—
Hon Bill EnglishHon DAVID BENSON-POPE Link to this
I tell Mr English that I am about to tell him, if he would listen. The number of allegations of benefit fraud has fallen by over 36 percent over the last 6 years. Investigations are finding that fewer fraud cases are occurring. The number of prosecutions for fraud has consequently reduced, and the amount of overpayment occurring, which includes cases of fraud, has reduced considerably. This is in large part due to the success of the benefit integrity services section of the ministry.
Why does the Minister not know just how much of the $750 million owed by working-age beneficiaries—that is, $2,800 per each working-age beneficiary—is due to fraud and how much is due to overpayments?
Hon DAVID BENSON-POPE Link to this
I can give some detail that will assist the member. In that debt portfolio, 62 percent of clients have a debt less than $1,000, and 90 percent owe less than $5,000, but the ministry’s systems do not retain individual debt balances for each instance of debt established. This does not mean we do not know how much a person owes, or that the ministry cannot or does not recover the money. Because transactions are applied to a consolidated debt balance, it is not possible at present to use current system data—systems inherited from National, I add—to determine the value of debt owed by a specific category of debt.
How does the Minister propose fixing the problem, when he does not know how he ended up with $750 million of debt?
Hon DAVID BENSON-POPE Link to this
I know how I ended up with the problem, and the reason for it is sitting over there! But I can tell the House that the enhancements necessary—
Is it acceptable for a ministry that spends $16 billion to have three-quarters of a billion dollars owed to it, and for the Minister to have no clue how that debt was incurred—other than to personally abuse members of this House—and how will he ever get it paid back?
Hon DAVID BENSON-POPE Link to this
Well, I am very pleased with the level of recovery, which will continue. But let me reinforce for that member that this Government, unlike the Opposition, remains committed to assisting people in need. If that means people get a loan from the ministry to assist with such essential costs as emergency dental treatment, or school uniforms, or ambulance fees, or safety footwear for work, then while this Government is sitting on the Treasury benches that is what will happen.