Fewer people commit fraud and the system is fair and sustainable

We take fraud seriously. We will continually review and adapt the actions we take to prevent, detect and investigate fraud.

Welfare fraud reforms

During the year, we continued to implement a range of initiatives to prevent and detect welfare fraud more effectively. We also had a stronger focus on preventing and dealing with increasingly sophisticated fraud.

In February 2014, we started a 12-month trial programme of follow-up interventions with a trial to confirm benefit entitlement of 1,616 Sole Parent Support clients. This involved letters, phone calls and home visits. The trial will be evaluated to inform a nationwide rollout.

During the year, Parliament passed the Social Security (Fraud Measures and Debt Recovery) Amendment Act, which came into force in July 2014. The new legislation makes both parties in a relationship jointly liable for any benefit relationship fraud uncovered. We developed an information campaign to inform benefit recipients of this change.

Since February 2013, the Welfare Fraud Collaborative Action Programme (WFCAP) has provided a platform for us to work with the Accident Compensation Corporation, Housing New Zealand Corporation, Inland Revenue and New Zealand Police to investigate suspected fraud.

Since WFCAP started, 27 investigations have identified $4.1 million of overpayments across participating organisations and the direct cancellation of 20 benefits.

In 2013/2014, our Fraud Investigation Unit investigated 4,614 cases of suspected benefit fraud – 996 more cases than last year. We completed 1,994 overpayment cases and prosecuted 893 cases.

Since April 2013, we have also adopted a more vigorous approach to seizing the assets of people who commit benefit fraud. We identify assets as part of all benefit fraud investigations and make referrals to the Police Asset Recovery Unit.

Since the programme started, $70,000 has been recovered through asset seizures.

Information sharing with Inland Revenue

Since March 2013, we have been receiving income and employer information from Inland Revenue for all working-age people receiving benefits.²⁵

This information tells us earlier and in more detail about changes in clients’ employment and income circumstances, and allows near-real-time assessment of entitlements to assistance. Since the programme was implemented, as at 30 June 2014, investigations led to:

• prosecution of 351 cases
• cancellation of 6,900 benefits after receiving employment information from Inland Revenue
• estimated future benefit savings of $44.8 million²⁶
• recovery of $3 million in overpayments.

How we demonstrate success

Note: Result changes below 1 per cent between 2012/2013 and 2013/2014 are considered not statistically significant.

Footnotes

25: This information-sharing programe is separate to the Welfare Fraud Collaborative Action Programe.

26: Estimated future benefit savings are calculated as the difference between the weekly rate of benefit paid at the time it was reduced and what it became, multiplied by 26 weeks.

27: ‘Age of offending’ refers to the period between the first and last overpayment of a successful fraud prosecution.

28: In the 2012/2013 Annual Report, we reported that the average value of fraud overpayments was $34,500. In 2013/2014, we completed a review of prosecution data and implemented reporting of prosecution results that are recorded on the Investigation Management System (IMS). Based on the IMS, the average value of fraud for 2012/2013 is $35,200.