Judith Collins MP
National Party Welfare Spokeswoman

6 July 2007

Benefit debt recovery unchanged despite spending

"The Ministry of Social Development is failing to recover any more beneficiary debt than it was five years ago, despite increased staff and a big boost to funding for Benefit Integrity Services," says National Party Welfare spokeswoman Judith Collins.

Benefit Integrity Services is responsible for providing services to protect the integrity of the social security system by preventing and reducing error, abuse, fraud and debt.

Ms Collins is releasing answers to questions in the 2007/08 estimates examination which show that in 2001/2002 Labour was collecting $66.5 million a year in debt from former beneficiaries, and in 2006/07 the amount recovered had increased only slightly to $67.4 million.

"In contrast, the number of staff dedicated to managing and recovering beneficiary debt has increased 364 in 2002 to 507 in 2007.

"And the funding for Benefit Integrity Services has almost doubled from $21.7million in the 2002/03 year to $36.464 million in 2007/08. Funding for debt management of former beneficiaries is provided separately and stands at $19.452 million this year.

"Despite all this extra spending the amount of debt has continued to grow.

"In March 2002 there were 343,000 working-age beneficiaries and total benefit debt stood at $537million. Now there are about 250,000 beneficiaries and the debt is $750million, about $3000 for very working-age beneficiary

"This is yet more evidence that the taxpayer is not receiving their full dividend from low unemployment. It follows revelations of a bureaucrat explosion at MSD and a huge increase in salaries in the department.

ENDS

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