Welfare fraud reforms delivering results

The Government’s welfare fraud reforms are working to make sure the benefit system is there for those who need it, says Associate Social Development Minister Chester Borrows.

With the seven key initiatives in the package now all underway or in force, Mr Borrows today released figures showing the programme had already recouped or saved over $47 million and stopped thousands of illegitimate or fraudulent benefits.

The effect on the lifetime liability of current beneficiaries is estimated at a reduction of between $119 and $134 million as of March 2014.

“This Government has put in place a package of reforms to get smarter with the way we approach welfare fraud, and it’s very pleasing to see these reforms delivering such positive results,” says Mr Borrows.

“While we know it is only a tiny minority of beneficiaries who take money they’re not entitled to, those who do cost tens of millions of dollars each year, and we’re committed to stopping them.

“With the addition of these new measures, the Ministry of Social Development is stopping more fraud than ever before. Investigators completed 4,614 investigations, established 2,270 overpayments and prosecuted 893 people during the 2013/14 year. In total $88.4 million of fraud and illegitimate overpayments were established.”

Mr Borrows pointed to the enhanced information sharing between Inland Revenue and the Ministry of Social Development as a standout success from these reforms.

“In its first year of operations this enhanced information sharing has prevented an estimated $44.8 million in illegitimate benefits from going out the door, and resulted in almost 6,900 benefits being cancelled.

“These are not people being kicked to the curb – they are people who are working, and earning enough money that they are no longer eligible for the benefit, who have failed in their obligation to tell us this has occurred.

“351 have been successfully prosecuted and over 400 more are currently being investigated for fraud, a number that will only grow as investigators work through cases,” says Mr Borrows.

Information released today also illustrated early successes of the reforms in preventing fraud.

The new ‘low trust client’ management approach, where those previously found to have been fraudulent or dishonest are subject to stricter monitoring, now applies to 1,884 beneficiaries. All these beneficiaries continue to be monitored, and no subsequent offending has been detected.

The Ministry of Social Development is also testing follow-up interventions with people receiving sole parent support to ensure they are getting their full and correct entitlements and are aware of their obligations. This programme is well underway and full results are due later this year.

“While it’s still early days I’m very encouraged by what we’re hearing from our staff as to the success of these preventative measures,” says Mr Borrows.

“When someone commits benefit fraud everyone loses – the taxpayer and the beneficiary. The best result is if we can help people understand their options and their obligations before they end up receiving money they’re not entitled to.”

ENDS

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