O'Connor Damien: Social Assistance (Debt Prevention and Minimisation) Amendment Bill — Second Reading 
O'Connor Damien: Social Assistance (Debt Prevention and Minimisation) Amendment Bill — Second Reading 
[Volume:645;Page:14799] 
Hon DAMIEN O’CONNOR (Minister of Tourism) 
 on behalf of the  
Minister for Social Development and Employment 
: I move  
That the Social Assistance (Debt Prevention and Minimisation) Amendment Bill be now read a second time 
. This bill introduces amendments to the current data-matching processes for social assistance to achieve three positive outcomes. Firstly they will allow the Ministry of Social Development to prevent people from accumulating debt. This is a positive move because repayment of debt is a considerable burden on people with low incomes. This Government recognises the negative impact that debt can have on people and through this bill is taking a positive step towards reducing debt in one area—that of benefit overpayments. Too much debt inhibits the ability of people to enjoy life and it restricts their ability to participate in their communities. It can have negative impacts on the health and education of children especially those living in overcrowded or substandard housing as a result of a family struggling to repay debts. We need to take what steps we can to lessen these impacts. 
The bill introduces amendments that will allow the Ministry of Social Development to immediately suspend benefits student allowances and the living component of student loans when a data match indicates that a recipient is in prison. A person in prison does not qualify for these payments. The changes set out in this bill allow benefit payments to be stopped in a timely way. This change will help prevent overpayments which in turn reduces debt. 
At present when there is a positive data match the ministry has to write to the person and wait for 5 working days before taking any action to stop payment. This wait can result in a person being overpaid and therefore the creation of a debt. The bill will allow for the suspension of benefits and allowances from the date the person enters prison and written notice will be issued at the same time. Benefits are paid in arrears so in most cases the suspension will not be immediate. There will still be time for the person to contact the ministry if an error has been made. In addition where the person entering prison has a partner the ministry will separately write to that partner to ensure that any appropriate support required by the family members not in prison can be provided. The result of the more timely suspension of benefits will be that the debts that prisoners face when they are released will be significantly reduced. Lower debt levels make it easier for rehabilitation to occur and also lessen the possibility of a person’s reoffending. Secondly the amendments will allow more effective recovery of debt where this has occurred. 
The bill will allow more effective use of data matches already in place between the ministry and three other Government agencies—the Accident Compensation Corporation the New Zealand Customs Service and the Department of Corrections. The bill will allow for the information provided by these agencies to be matched against the records of people with a debt who are no longer receiving a benefit. Contact can then be made and recovery arrangements put in place where appropriate. This enhanced use of information will increase the efficiency and effectiveness of existing processes that support debt recovery. 
Last but by no means least the amendments will allow early detection of the misuse of the social security student allowance and student loan systems by broadening data-matching provisions. The bill provides for the information currently provided when a person enters prison to continue to be provided as long as the person remains in prison. This will allow an application for benefit student loan or student allowance from a person in prison to be detected quickly. 
This change will not make it more difficult for prisoners to undertake studies to improve their prospects on release. Prisoners will continue to have the same access to assistance with study costs. It is the assistance for student living costs that will be restricted. The change simply puts in place systems to more clearly identify applications for student allowances and living costs from people whose living costs are being met from the corrections system. The combination of the amendments set out in this bill will help to ensure integrity and proper use of Crown moneys and this will serve to increase confidence in the administration of the benefit system. 
I appreciate that people are concerned about the possibility that an incorrect match could result in the suspension of a person’s benefit in error. In taking a more proactive approach to the suspension of benefits the Government has had to balance the individual’s right to take time to reply against the need to act quickly to prevent debt. Although I acknowledge concern about incorrect matches the Ministry of Social Development has safeguards in place to ensure that if this happens there is minimal impact on the person concerned. Up to a week before payment is scheduled to cease affected people will receive a letter informing them that their benefit has been suspended. This will give them the opportunity to have their benefit reinstated before actually missing a payment. In addition when the ministry is alerted that a payment has been wrongly stopped the money will be put into the person’s bank account overnight. 
The Social Services Committee has recommended that a new provision be inserted to make it clear that the ministry can still allow the 5 days to pass before taking any action when this is appropriate. I appreciate the committee’s insight in this regard. Having this discretion is important. For example it allows time for the ministry to clarify that the correct person has been identified when there is a partial or inconclusive match. The committee has also recommended a number of other minor changes to the bill. These changes are positive and reflect the committee’s expertise in this area. 
I would like to take this opportunity to thank the select committee members for their work which has improved and clarified a relatively technical bill. The Social Assistance (Debt Prevention and Minimisation) Amendment Bill will help reduce debt and help ensure that money goes to the people who need it and are entitled to receive it. The bill reflects this Government’s commitment to helping low-income people towards a better future and represents the efficient and effective use of technology time and money. I commend this bill to the House.