Guest Post: MSD ups efforts to detect sole parent benefit abuse

Lindsay Mitchell has been doing some digging  and come up with some interesting information regarding benefits and who should and shouldn’t be on them.

She has given me permission to repost her information in the interests of giving her a wider audience.

I have found the following information enlightening…especially as it appear to show that over 10% are abusing their benefit.


We all know that there are plenty of people pulling a single parent benefit who have partners. Anecdotal evidence aside, there are two data sources pointing to this.

One is the Growing up in NZ study, which I wrote about here but it gets quite complicated.

The second is simpler. It’s revealed in a passage from Child Poverty in New Zealand, by Simon Chapple and Jonathon Boston:

“Work undertaken at the Department of Labour and based on matching Household Labour Force Survey (HLFS) and administrative welfare records indicated, firstly, that in 2011 about 10 per cent of people whose welfare records showed that they were receiving an unemployment benefit reported to the HLFS that they were actually in full-time employment (i.e., working at least thirty hours a week), and hence were ineligible for the benefit; secondly, that more than one-third of people on an unemployment benefit self-reported as not actively seeking work – and one in five expressed no intention to seek work in the coming year; and, thirdly, that about 10 per cent of people whose welfare records showed that they were receiving a DPB reported being partnered or living as married.”

(After an MBIE refusal to release the paper to me, the matter currently sits with the Ombudsman).

Back in October I blogged about a trial mentioned in the MSD Annual Report.

I have asked for more information under the OIA. On Thursday some data was released to me.

The trial is conducted on single parent support beneficiaries because this is the only benefit that has relationship status a requirement for eligibility. The participants were those who had been on Sole Parent Support benefit (SPS) for 20 weeks. A National group was selected, and a regional group covering Taranaki, Waikato and Wellington. Naturally a control group (which received no follow-up intervention) was also randomly selected and I am assuming these individuals had also been on SPS for 20 weeks.

Here are the early results. I have included the part of the letter that describes the outcomes. In a nutshell those beneficiaries left alone were the most likely to remain on a benefit. When Integrity Services (benefit fraud control) conducted the follow-up interview in the regions, 10.3% were off the benefit 42 days after allocation to the trial; another 1.9% were moved to another benefit (which might indicate a relationship was established and different benefit entitlement applied.)

The 10.3% is remarkably similar to the findings after matching HLFS data and WINZ records referred to above.

There is every chance the real incidence is higher. I say that because the trial only covered people who had been on SPS for 20 weeks. I suspect the likelihood of having an undeclared partner grows with time rather than decreases but I may be wrong.

Of course, it’d be easy enough to find out. Run follow-up interventions regularly across various cohorts. Though note that under the table the Ministry writes, “Results from the Follow-up Intervention trial continue to be analysed to inform decisions about whether engaging Sole Parents at a certain point in time should be rolled into normal business practice.”

Looks like a no-brainer to me.

Two other fraud initiatives referred to in a further document release include ensuring clients understand the definition of a de facto relationship using a brochure and on-line tool; and, in some cases, asking applicants for a third party that can confirm their relationship status (apparently the current Australian approach.)


Quite. It is not for lifestylers who produce meal ticket children because they can’t be bothered supporting themselves.


– Lindsay Mitchell


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  • Bart67

    Yes, it does strike me as odd how so many people on a sole parent benefit still manage to find someone to procreate with. I wonder if there is a breakdown of statistics of the beneficiary by ethnicity and gender?

    • burns_well_eh

      Yes, and the number of people up before the courts for criminal activity often requiring a great deal of physical effort – who are listed under Occupation as Sickness Beneficiary.

  • cows4me

    It’s still the same language, “clients”, they aren’t bloody clients. The whole culture needs to change, welfare should be seen as a privilege not a right. Why our politicians continue to fund baby factories is simply criminal, it doesn’t help the recipients and it just perpetuates a endless line with their hands out, it has to stop.

    • JustanObserver

      Absolutely agree C4M, some socialist agenda years ago decided there would be less ‘stigmatism’ by calling the Beneficiaries ‘Clients’
      Well for me it reeks !
      I work hard to earn my dollars and support my family. I am happy(ish) to pay my fair share to pay for public services, and to ‘help-up’ those who need it ….
      But I am so opposed to having to pay for ‘Lifestyle Choices’ of the lazy and bludgerant.
      Get a Haircut & get a Real Job !

    • Cadwallader

      They’re not “clients” they are dependants.

  • I’d be keen to see an ethnic breakdown of these stats, and which ethnic groups went off the benefit the quickest vs those that stayed on the longest. Of course that would be to “sensitive” to provide.

    • Max

      Why would that matter.

      • Surely you realise how we target funding to certain “ethnic” groups here in NZ that seems to receive a larger than proportionate share? This is why it is of interest to non-liberal who pays taxes which is therefore used by this group who want more and more of the slice of the pie that is NZ. Hell what would you say if Muslims had their own version of Whanow Ora?

        • Max

          We target certain groups because they are at the bottom of the social ladder,hopefully Whanau Ora etc. will address some of these issues rather than just posting negative statistical reports.If we use statistics it would show that all of the major collapses in investments recently were engineered by middle aged pakeha CEO’S and directors so does one assume all middle aged pakehas are crooks.

          • OMG! You’re one of “them” (white sickly liberals who feel guilt). Why are you even here? What next we should let ISIS in? Grow some balls…

          • Max

            Thank you for your concern re my testicles but they are quite big enough.I’m quite happy for Winz to take away benefits from those not entitled to them etc.and long term benefit users should be put into work etc.and other social problems should be addressed through both carrot and stick.I just get tired of the racist remarks appearing here from time to time.

          • The reason you are one of “them” is that you call my request for an ethnic breakdown of the statistics “racist”. When in reality it was nothing of the sort.

          • Max

            Well of what interest in an ethnic (in brackets) breakdown.Treat them all the same ,take them off benefits if they are not entitled to them by all means whatever colour or religion they are.

          • I cannot believe you don’t understand what is already current practice through programmes such as Whanu Ora. If we know which ethnic groups are more susceptible to staying on benefits then we can target programs towards identifying them and moving them off the benefits just like we target other benefits like whanu ora based on the same eligibility. Or are there groups you don’t think should be subject to closer inspection based on stated ethnicity as this would be #racist? Yet it is ok for the very same groups to recieve additional tax payer funding for education, family reunions, and extra/larger representation via local council than other ethnic groups enjoy?

            These are but some of the reasons I would be interested in a non-forthcoming ethnic breakdown of the stats.

  • peterwn

    This will be called third term arrogance and hubris by the Left and the left leaning media.

  • Whitey

    Thank you for doing this investigation for us Lindsay, it’s very interesting and something everybody ought to be made aware of. I’m sure the real incidence of benefit fraud is higher than 10% and I would agree that the likelihood of fraud probably increases with the amount of time spent on SPS. Twenty weeks is less than half a year and I would be interested to see the stats for people who have been on SPS for several years.

    And remember, this is just about undeclared relationships. What about those women who have another baby so WINZ will fork over more cash? I don’t think WINZ classes that as benefit fraud, but they should. If they did, I think we would all be stunned at the percentage of SPS fraudsters.

    • Michael_l_c

      Maybe compulsory contraception if u want the sole parent benefit & yes it should apply to males as well, but how?

      • Whitey

        Sure there are some logistical problems to iron out, but it’s well worth looking into.

  • kaykaybee

    As usual Lindsay is on to it and I am all for anything that unmasks the theft that goes on under our noses. I’d like to highlight a legal tax loophole in an area productive for many sole parents.

    The vast majority of people employed in NZ households as domestic cleaners are sole parent beneficiaries. I have employed many of these ladies as have most of my working-parent friends at some time or other. As a special IR56 worker the responsibility to declare monies earned while domestic cleaning lies solely with the worker and in a largely cash industry you can guess how much the hapless government receives of those millions.

    There is many a sole parent not only being subsidised by her neighbours on a benefit plus housing allowance who is also raking in hundreds a week in undeclared cash. Sure there will be some complying *cough*, but from what I’ve seen many of them have a lifestyle their working peers can only dream of. I think the IR56 domestic tax loophole is a grossly unfair area that’s shamelessly exploited and needs a serious overhaul.

  • Elinor_Dashwood

    What this highlights is how fundamentally perverse and unfair means-tested benefits are, providing people with a strong economic incentive to lie and then spending more and more money on intrusive and overbearing monitoring systems so as to catch them out and punish them when they do so. It’s a strong argument in favour of Gareth Morgan’s universal basic income concept

    • Woody

      How about imposing Woody’s work for what you get concept.