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Considerable effort is under way to change the culture of MSD, including development of a client commitment charter. The environment in MSD offices is also being made more welcoming for benefit recipients. The direction of change is positive, but considerable effort is needed to ensure it is substantial, consistent across all offices and sustained over the long term.

It will take time, sustained commitment and additional resources to achieve a shift in MSD’s culture. Most importantly, the thinking behind the design of MSD systems and policies needs to change, to create lasting and real change in behaviour towards the wide range of users of MSD’s supports and services.

We support the direction of change. Our recommendations seek to reinforce the changes by setting demanding key performance measures to hold MSD to account. These should be measurable and informed by the purpose, principles and values we recommend.

Key recommendations

Restoring trust

Recommendation 10: Develop a mutual expectations framework to govern interactions between the Ministry of Social Development and those who interact with the welfare system.

Recommendation 11: Remove some obligations and sanctions (for example, pre-benefit activities, warrants to arrest sanctions, social obligations, drug-testing sanctions, 52-week reapplication requirements, sanctions for not naming the other parent, the subsequent child work obligation, and the mandatory work ability assessment for people with health conditions or disabilities).

Recommendation 12: Improve outcomes by ensuring the public-facing, frontline service is consistent with the new purpose and principles through sufficient resourcing (for example, staffing, support and services), an appropriate performance framework, and complaints and disputes processes.

Recommendation 13: Assist recipients of Sole Parent Support to return to part-time work when their youngest child is 6 years old (subject to supports being available, such as good quality childcare) instead of the current 3 years. Support but not require all sole parents to return to work when their youngest child is under 6 years old.

Reducing the generation of debt

Recommendation 14: Continue to prioritise a reduction in outstanding benefit debt through sustainable repayments, and minimise the creation of overpayments, including reviewing recoverable hardship assistance and current practice, to be more consistent with whakamana tāngata.

Recommendation 15: Align the regulations and practice around benefit debt so that it is treated in substantially the same way as Inland Revenue treats taxpayer debt.

Recommendation 16: Instigate a cross-government approach to managing debt to government agencies.

Minimising the small amount of fraud

Recommendation 17: Endorse the Ministry of Social Development’s three-tiered approach to responding to fraud allegation: intervene, facilitate and, as a last resort, investigate. Apply the principles of natural justice in all steps, and, if the outcome is disputed, permit a review independent of the Ministry of Social Development.

Interface with the justice sector

Recommendation 18: Enhance and improve the support for people exiting prisons, including increasing the Steps to Freedom grant, and ensuring that any person who leaves prison has appropriate identification and is engaged with specialised care and supportive housing initiatives. Move practices around prisoner integration out of the ‘pilot’ stage and draw on evaluation data to embed integrated support for these individuals.

Detailed recommendations

Theme Detail
expectations framework
Reform the obligations and sanctions regime into a system of mutual expectations and responsibilities, apply these according to the circumstances of the individual and in a way that is consistent with the proposed purpose, principles and values. Strong checks to mitigate potential negative impacts on individuals and their families will be required. This new approach is strongly connected to improving wellbeing and supporting the increased skills and labour market capacity of the individual and family or whānau.
Obligations and
sanctions removal


  • the requirement to complete specific activities before a benefit is granted (pre-benefit activities)
  • the sanction where benefit payments stop if people have a warrant out for their arrest, and continue data matching with the Ministry of Justice and take a proactive supportive approach to contacting these people
  • social obligations that require people receiving a benefit to take all reasonable steps to have their children enrolled with a medical practice, be up to date with their Wellchild/Tamariki Ora checks and be attending early childhood education or school
  • pre-employment drug testing and provide specialised support for people with substance use disorders
  • the mandatory work ability assessment for people with health conditions or a disability and link workability assessments to return to work plans
  • the requirement to reapply for a benefit every 52 weeks – MSD is expected to provide full and correct entitlements through regular reviews (at least annually)
  • work obligations when an additional child is included in a benefit (the subsequent child rule)
  • the sanction on not naming another parent (was section 70A in the Social Security Act 1964 and is now section 192 of the Social Security Act 2018).
Resourcing and other processes of the public-facing, frontline service are consistent with the new purpose and principles

Resource frontline services to the level required to achieve outcomes as a priority.

Implement an ongoing, comprehensive, active and agile staff training strategy.

Adopt an improved and accessible complaints process that is measured by a satisfactory restoration of the relationship between the parties.

Make the review process simpler, speedier and more accessible, and ensure the principle of natural justice is observed.

Make a further hearing at the Social Security Appeal Authority available to those who take an unsuccessful claim to the Medical Appeals Board.

Assign people likely to be in long-term receipt of a benefit or with complex needs a dedicated case manager, and give such case managers small caseloads so they can adequately address the wellbeing of the person in need and their family or whānau.

Resource the workforce adequately, and streamline systems in consultation with the frontline workforce to improve work flow and recipient service experience.

Put people at the centre of decision making, seek feedback from staff about how system changes affect their roles, and empower staff to work proactively to enhance the mana of benefit recipients.

Provide multiple channels for service so applicants can access assistance through whichever channel they are most comfortable using.

Take a Whānau Ora-type approach where the complexity of a person’s situation means multiple agencies are involved and skilled navigators support the person’s interactions with the agencies and community organisations.

Reducing the generation of debt

Theme Detail
Ways to minimise the creation of overpayments and reduce overall indebtedness

Review all hardship payments and ensure eligibility is in line with the new purpose and principles of the Social Security Act.

Give MSD the mandate to improve, simplify and redesign practice around income declarations.

Increase funding for community initiatives that promote financial literacy and for debt reduction, such as no interest, no fee and debt consolidation loans.

Introduce a scheme of incentivising benefit debt repayment, such as a Matched Debt Reduction Scheme, to reduce outstanding benefit debt.

Review internal performance measures relating to debt, to bring them in line with the new purpose and principles.

Minimising fraud

Theme Detail
Minimising the small amount of fraud

Endorse MSD's three-tiered approach towards alleged fraud.

Introduce independent review proceedings prior to a Benefit Review Committee for prosecution investigations.

Explore and align prosecution practice with Inland Revenue’s approach to prosecution.

Improving the interface with the justice sector

Theme Detail
Improving the service provided to people released from prison

Scale up the Supporting Offenders into Employment intervention and MSD’s reintegration efforts, in conjunction with the Department of Corrections.

Pastoral care for people released from prison should be increased.

Review and increase the current value of the Steps to Freedom grant, to ensure it is adequate for basic living costs, including housing.

Monitor and ensure prisoners have the appropriate documentation to obtain income support or work on release (for example, an official form of identification, a driver’s licence, bank account, contact details).

Consider continuing housing cost assistance for people entering prison for a short period, on remand or in custody.

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