$3.8m of superannuation ‘overpayment debts‘ wiped over 5yrs

Thousands of pensioners who were mistakenly overpaid millions of dollars in superannuation have not had to pay the money back.

Photo: RNZ / Rebekah Parsons-King

Figures released under the Official Information Act show one pensioner was mistakenly overpaid $43,301 – and it was the largest single debt to be wiped in 2016.

All up, 7659 New Zealand Superannuation “overpayment debts” totalling $3.8 million were wiped by the Ministry of Social Development (MSD) between 1 January 2013 and 30 September 2017, which is the most up to date figure it had.

Photo: Supplied / OIA screenshot

MSD only recorded the number of debts, not the number of people affected, it said.

“While it is possible a client may have more than one debt, it is highly likely that the number of debts has a high correlation to the number of people,” MSD group general manager client support Dwina Dickinson said.

In the first nine months of 2017, $755,699 worth of super overpayments were wiped but the total number of debts almost doubled to 2196.

That was after 1100 superannuitants, who were also receiving a Dutch pension, were overpaid as a result of “human error”.

“The Netherlands overpayment was the result of human error where the incorrect entitlement date was entered into our system,” Ms Dickinson said.

The number of debts written off was still relatively small compared to the tens of superannuation or veteran pensions each year.

Debts could only be written off in a few specific circumstances, MSD said.

These included: whether the debt was created as a result of a staff error, whether the client had already spent the money, and if they could afford to repay it at all.

MSD said it did not record whether a specific debt was wiped due to errors made by its staff.

“We are always concerned when an overpayment occurs because we‘ve done something wrong – that‘s not the quality of service we want to provide to our clients,” Ms Dickinson said.

“We pay $17.5 billion worth of assistance to 1.2 million clients every year and with over 5 million transactions a year some mistakes are inevitable.

“When we see that we‘ve made an error that‘s resulted in an overpayment we own up to that and seek to make it right for the client as quickly as we can,” she said in a statement.