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Steady Progress in Benefit Review

8 April 2004

Media Release
For Immediate Release
Steady Progress in Benefit Review

The Ministry of Social Development has completed the first stage of its review of sole parent benefits as part of a major project to ensure decisions made between 1996 and 2000 had the correct legal test applied.

The project is reviewing cases during this period where people had their sole parent benefit stopped and/or a debt established by Work and Income because they were deemed to be living in a marriage-type relationship.

MSD General Manager of Specialist Services Patricia Reade said out of the 5,717 applications received for review, 993 were out of the scope of the review and 4,561 cases were eligible to be reviewed and have now had the decision made.

“The first stage of the review is based solely on the paperwork in each case file. If the paperwork demonstrates that the correct legal test has been applied then the original decision will be upheld. In cases where the paperwork does not provide this information, the Ministry will err on the side of the client and overturn the original decision.

“Each case review is carried out in two stages by a three person panel, including an independent member. Where it is not possible based on the paperwork to establish if the correct legal test was applied at the time, the person’s debt will be wiped and any repayments they have made will be reimbursed.

“Of the 4,561 decisions made, 1,690 case files contained information that made it clear that the correct legal test was applied at the time and these decisions have been upheld. 2,871 case files did not contain sufficient information to determine if the correct legal test has been applied. Because of this, these decisions have been overturned and the clients will receive reimbursement for any debt repaid and/or debt write-offs.

“Calculations are underway now in these 2,871 cases to determine the amount of money to be paid in each case. The Ministry has completed this part of the process for 2,108 of the successful applicants who have had their debts disestablished and refunds made, where applicable. The remainder of the successful applicants will be contacted as their case calculations are completed over the next few months.

So far, refunds have totalled around $6 million with an average payment per case of approximately $2,500.

“In the meantime, work also continues on the second stage of the review. In this stage, the panel will assess the person’s benefit entitlements since the original decision. People will be told that this may involve the need for further information about their circumstances, and they can opt out of this stage of the review if they wish.

The panels have assessed that of the 2,871 overturned cases there are 1,491 cases to be considered to determine if the applicants would have had an ongoing benefit entitlement. This stage of work should be completed by the project’s deadline of 30 June 2004”, said Patricia Reade.

The Ministry of Social Development set up the Benefit Review Project after a report by Auckland lawyer Frances Joychild showed that Work and Income may not have used the correct legal test for marriage-type relationships between November 1996 and December 2000.

Ms Joychild examined Work and Income’s practice in the wake of a 1996 Court of Appeal ruling that a marriage-type relationship required two essential features – emotional commitment and financial interdependence. The court also ruled that the effect of violence in a relationship needed to be taken into account when assessing these features.


Backgrounder

The 1996 Court of Appeal case that clarified what is a marriage type relationship

Miss R lived with Mr T for about 18 years, from 1974 to 1992. They never married. The relationship was characterised by severe violence.

Miss R had a child to Mr T in 1977. Mr T never provided financial support for her or their child. He gave no assistance with domestic duties and took little part in looking after their child.

Between 1977 and 1992, Miss R received various welfare benefits during periods when she was not working.

Following an anonymous tip-off, Miss R was prosecuted for failing to disclose her relationship with Mr T, and was convicted in the district court. Her benefit was cancelled and the court directed her to pay back $44,759.93.

Miss R unsuccessfully appealed to the High Court. She then appealed to the Court of Appeal.

In 1996, the Court of Appeal found that, in order for a relationship to be “in the nature of a marriage” two essential features must be present:
- a degree of companionship demonstrating an emotional commitment, and
- financial interdependence.

The court also found that the effect of violence in a relationship must be taken into account when assessing these features.

In Miss R’s case, the Court of Appeal found that there was no financial interdependence because Mr T had not provided any financial support and further, that the violence and other forms of control exerted by Mr T meant that the required emotional commitment was not present.

The Court of Appeal allowed Miss R’s appeal and quashed her convictions.

Ends

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