Work and Income unlawfully withholding redundant worker payments “for decades”

According to RNZ Work and Income have been illegally delaying paying redundant workers until they have used up all their redundancy funds.

On Friday: Work and Income acts ‘unlawfully’ over benefits and redundancy payments

Work and Income has been acting “unlawfully” and ignoring its own legislation by telling people paid redundancies that they are not eligible for a benefit till that money runs out.

It came to light after RNZ detailed the story of Mary*, a hotel worker made redundant when the Covid-19 lockdown began.

She applied for a job seeker’s benefit but was told she would not receive anything till her redundancy runs out in September.

Work and Income’s Kay Read, group general manager client service delivery, said on Wednesday that payments received when a person stopped work, such as holiday pay and some severance payments, would delay the time when income support payments started.

However, section 422 of the Social Security Act makes clear when calculating a person’s income and benefit level, Work and Income is to “take no account of a redundancy or retirement payment”.

The legislation states:

Regulations made under subsection (1) may (without limitation) authorise MSD,..

(c) in calculating the income of a person for the purpose of determining the rate of benefit, to take no account of a redundancy or retirement payment.

It should have been easy to question and rectify.

Mary’s case was reviewed this week after RNZ asked questions. She has been told a mistake was made and she can receive the benefit.

Mary said it was great to have better news but she was very worried and angry about how many other people had been wrongly advised and simply given up.

The Work and Income employee she dealt with had many years’ experience. She told her she had always applied the rules in this way.

Today:  Work and Income wrong on benefits and redundancies for decades

Work and Income appears to have spent decades wrongly advising some benefit applicants that they cannot get support until their redundancy has run out.

Work and Income admitted on Friday it had made an error after it rejected the benefit claim of Mary, an Auckland hotel worker, due to her Covid-19 redundancy payout.

The reversal came after RNZ pointed out that the Social Security Act said redundancy should not be a factor when calculating an entitlement to a benefit. A community law expert said that the law relating to redundancy and benefits had not changed substantially since 1994.

RNZ asked those in a similar situation to Mary to get in touch and has been inundated with scores of emails that highlight cases not only from the past few months, but dating back to the 1990s.

Among them were:

  • In 2018 a 63-year-old man was told he had to wait 16 months till his redundancy ran out before he could get the benefit. By that time he was only three months off his pension.
  • A woman who was made redundant twice, in different parts of the country, and denied the benefit both times. Eventually she was declared bankrupt after losing her house.
  • In 2012 a man who spent six months “burning through all our savings” before he found work.
  • In 2011 a former defence force worker says he was told he should return when the money had run out.
  • In the early 2000s a sole parent who lost his hospital job and then had to live on his $20,000 redundancy.
  • A new dad who was made redundant in the early 1990s and told he couldn’t get anything for six months. He got sick and the family’s debt spiralled.
  • A number of people decided not to apply after reading on the Work and Income website they couldn’t because of their redundancy.

Up until Friday, Work and Income’s site continued to say that if a person received a redundancy “your payments from us will start once [it’s] finished”.

RNZ has asked Work and Income and Social Development Minister Carmel Sepuloni a number of further questions about how long the practice had been in place; the number of people affected and whether back payments may need to be made.

A spokeswoman for the minister said Sepuloni had not been aware of the issue but had asked officials for a briefing on Monday. They had advised it was an “operational issue”.

I wonder if this comes under the Prime Ministerial gagging directive.

I’m shocked that it has taken this long to become an issue. Surely people will have complained in the past.

Work and Income earlier said staff had been reminded redundancy payments should not form part of calculations made as to when a person’s benefit payments should start.

It was encouraging anyone who has concerns about how it had calculated their benefit start date to get in contact.

This will affect many people who have been paid less than they are entitled to, but backdating correct payments for decades would be a mammoth correction.

Nicky Hager complaint upheld – SIS acted unlawfully

The Acting Inspector General of Intelligence and Security has upheld a complaint by Nicky Hager that the SIS unlawfully attempted to uncover his journalistic sources. This was in relation to Hager’s 2011 book Other People’s Wars.

The Police had been found to have unlawfully attempted to uncover Hager’s journalistic sources when investigating the hack of Cameron Slater after Hager published Dirty Politics.

In both cases the sources were not identified.

Regardless of whether one agrees or disagrees, or supports or opposes, with what Hager has written about, illegally trying to out his sources (by both the SIS and the Police) should be a real concern.

At least by making successful complaints Hager has exposed the unlawful actions, which will put pressure on both the SIS and the Police to do things properly in the future.

Hager’s lawyer Felix Geiringer (@BarristerNZ) tweeted:

The full Report into a complaint by Nicky Hager against the NZSIS

CONCLUSION AND RECOMMENDATION

For the reasons given I have found that NZSIS unlawfully provided investigative assistance to
NZDF in efforts to determine whether a specific NZDF officer had been a source for information
published in Mr Hager’s book Other People’s Wars. Specifically, NZSIS provided that assistance
despite a lack of grounds for reasonable suspicion that any activity had occurred that was a
matter of national “security” as that was defined in the governing legislation of NZSIS at the
time. I have been unable to find that the Service showed the kind of caution I consider proper,
for an intelligence agency in a free and democratic society, about launching any investigation
into a journalist’s sources.

Mr Hager’s complaint against NZSIS is therefore upheld.

To the extent that Mr Hager was the subject of NZSIS inquiries that I have found were not within
the lawful scope of NZSIS activity at the relevant time, I consider he was adversely affected by
the agency’s activities. The Service acquired two months of call metadata for Mr Hager’s home
telephone line. In the circumstances I think an apology from NZSIS to Mr Hager is an appropriate
remedy. I recommend accordingly.

There should be greater repercussions than a recommendation of an apology.

Pike River prosecution withdrawal unlawful

RNZ: Pike River prosecution withdrawal unlawful – Supreme Court

It was unlawful for WorkSafe to withdraw its prosecution of Pike River mine boss Peter Whittall, in exchange for payments to the victims’ families, the Supreme Court has ruled.

WorkSafe New Zealand initially laid 12 health and safety charges against Mr Whittall, but they were dropped after more than $3 million was paid to the victims’ families.

Earlier hearings in the High Court and Court of Appeal ruled the decision to offer no evidence to the charges was not unlawful.

In October, lawyers for Anna Osborne and Sonya Rockhouse, who both lost family members in the 2010 explosion, asked the Supreme Court to issue a declaration that the dropping of charges arose from an unlawful bargain.

In is defence, the Crown argued the reparation payment was just one of several factors taken into account in withdrawing the charges.

It also had to consider the possible unavailability of witnesses and the fact a trial could take between 16 and 20 weeks.

In today’s decision, the Supreme Court unanimously allowed the appeal and ruled the decision to offer no evidence was “an unlawful agreement to stifle prosecution”.

RNZ has extensive coverage of this here.