8 February 2005 Media Statement

Key ignores safeguards in scheme

“National’s scaremongering around families running into debt as a consequence of the Working for Families package ignores the protections built into the scheme,” Finance Minister Michael Cullen said today.

Dr Cullen was responding to a statement from National finance spokesperson John Key that families may inadvertently underestimate their projected income and be required to repay any overpaid entitlement to the IRD.

“We anticipated this risk and provided against it,” Dr Cullen said.

The safeguards are:
- Inland Revenue will monitor families’ income during the year using data from the employer monthly schedules. Where this information indicates that someone’s estimate of income is incorrect, IRD will follow that up with the Working for Families recipient.
- Where a person’s entitlement changes for non-income factors – for example, a change in relationships – the onus is on the recipient to inform IRD. IRD, however, provides a safeguard by contacting recipients of family assistance during the year asking them to advise of any changes in circumstance which may affect their entitlement.

ENDS

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