New law will hold partners complicit in welfare fraud to account

Associate Social Development Minister Chester Borrows has welcomed the passage of a Bill to hold partners complicit in welfare fraud to account, 102 votes to 17.

The Social Security (Fraud Measures and Debt Recovery) Amendment Bill changes the Social Security Act 1964, making spouses and partners of beneficiaries, as well as beneficiaries, accountable for welfare fraud or dishonest overpayments.

“We know the overwhelming majority of beneficiaries are honest, and successfully navigate the rules, but those who don’t cost the taxpayer tens of millions of dollars each year,” says Mr Borrows.

“In the vast majority of cases where the fraud is failing to declare a relationship while receiving a single-person’s benefit, only the beneficiary was taking the blame and shouldering the debt, which can be tens of thousands of dollars.”

“That wasn’t fair. Relationship welfare fraud can only occur when two people chose – by their actions or inactions – to be involved in a fraudulent situation.

“We’ve now made it fair. Spouses and partners will be jointly responsible for the debt if they knew about the fraud, or turned a blind eye to fraud occurring in their own home,” says Mr Borrows.

The changes also ensure that the Ministry of Social Development continues to recover debt effectively while enabling it to exercise sensible discretion in managing recovery in individual cases.

The passing of the Bill is the latest in a package of reforms designed to combat welfare fraud.

“Welfare assistance is a major form of public expenditure and New Zealanders expect us to be good stewards of the taxpayer’s funds.  These reforms are a sensible step in ensuring that the welfare system is there for those who need it, and is not abused,” says Mr Borrows.

The Bill comes into force on 7 July 2014.