E whakamāmā ake nei mātou te tomonga ki te pūtea tautoko We are making income support easier to access

An accessible welfare system is one that makes it easy for people, families and whānau to get the income support they need and are entitled to, so that they can live with dignity and are able to participate meaningfully in their communities.

For MSD this means:

  • ensuring people get their full and correct entitlement on time
  • maintaining a network of service centres across the country where people can go to get face-to-face help from a case manager
  • providing digital channels, including online access and enhancements to the MyMSD app, and phone-based services, so that people who prefer to use such channels or who are distant from a service centre, can find out what they are entitled to, apply for it, and get and supply information
  • ensuring that our systems allow as many transactions as possible to be done automatically, to give our people more time to provide individual case management
  • giving people a positive experience so that they are confident about interacting with us when they need our help
  • working with clients who have incurred a debt to manage that debt and to repay it in a way that does not cause further hardship
  • responding quickly to needs that arise from adverse events such as weather events or natural disasters.

The multiple information systems and points of contact currently limit how effective and easy we can make this for our clients. We are exploring options for improving our current systems and processes to meet the requirements the Government has set in its welfare overhaul work programme, and to meet the expectations of all New Zealanders.

Delivering income support to more people during and after the COVID-19 lockdowns

We responded to the global pandemic by introducing new income support programmes so we could deliver our existing core services more quickly. This also freed up time to provide more employment case management to get people into jobs.

During and immediately after the COVID-19 national lockdowns, and into the first part of 2020/21, the number of people receiving main benefits rose sharply. However, short-term movements in benefit numbers during 2020/21 showed a slower rise than was being forecast before the year started, and mirrored pre-COVID-19 seasonal changes. This indicates that the economy is recovering more robustly than anticipated. 

Additional COVID-19 payments helped during elevated alert levels

There were several short changes to alert levels during the year, affecting Auckland and Wellington. In the most extensive of these changes, in August 2020 the Government introduced a Resurgence Wage Subsidy for employers and self-employed people who would otherwise have had to lay off staff or reduce their hours due to COVID-19. The Resurgence Subsidy was available between 21 August and 3 September 2020 and provided a lump-sum payment to eligible employers at a flat rate of $585.80 for people working full-time (20 hours or more per week) and $350.00 for people working less than 20 hours per week (part-time rate). Total payments under the Resurgence Subsidy were nearly $315 million, with almost 294,000 jobs supported.

Short-term Absence Payment

In February 2021 the Government introduced a Short-term Absence Payment to help businesses to pay staff who were off work and unable to work from home while waiting on a COVID-19 test result, through a one-off payment of $350. The payment was also available for employers in respect of an employee who had to stay at home because they:

  • had a dependant or other household member who was staying at home awaiting a test result, or
  • were a secondary contact.

Wage Subsidy payments

When a further elevation in alert levels was announced in March 2021 , the Government activated the COVID-19 Wage Subsidy March 2021. Applications opened on 4 March 2021, and by 25 June we had processed almost 61,000 applications, approving payments of over $183 million. The March Subsidy supported 170,000 jobs.

The Wage Subsidy was not activated in response to the June 2021 alert level change for Wellington.

Other ways we made access to income support easier in 2019/20 and 2020/21, during and following the COVID lockdowns, included:

  • removing stand-down periods at benefit grant, for eight months from 30 March 2020
  • suspending requirements to produce medical certificates (from 25 March 2020)
  • deferring annual benefit and Disability Allowance reviews (from 25 March 2020)
  • funding in-home childcare for essential workers (from 25 March 2020)
  • streamlining benefit application processes
  • making outreach calls to vulnerable people
  • providing additional emergency housing assistance
  • increasing limits for hardship grants for food
  • pausing 52-week benefit reapplications, annual and housing reviews, and subsequent medical certificates (March 2020 to March 2021)
  • accepting phone applications for Funeral Grants (April to October 2020)
  • deferring medical reviews for Child Disability Allowance (March to October 2020)
  • deferring reapplications for Temporary Additional Support (April to October 2020)
  • extending expiries of Emergency Benefit and Special Benefit (March to October 2020).
The income support system is better placed to cope with a resurgence of COVID-19, or with a similar emergency.

Providing support as soon as needed

During the 2020 nationwide lockdown, we proved that it was possible to establish a mechanism at very short notice for getting financial assistance to those who need it quickly, and we now have response systems in place to cope with any future resurgences. New programmes in response to COVID-19 proved very effective in keeping people in jobs when they might otherwise have been forced to go on a benefit.

We have begun to move beyond the immediate response stage towards a new “normal”.

In 2020 we moved to a high-trust environment for providing assistance – so we could quickly get support to the people who needed it. This year we have gradually reintroduced some of the checks and balances in the system that help us to ensure that people receive what they are entitled to in a timely way.

From early 2021 Jobseeker Support numbers began to fall

In 2021 we have seen more people leaving the benefit system because they found work than at any time in the last 25 years.

The chart below shows that Jobseeker Support recipient numbers climbed by over 61,000 between the start of the nationwide lockdown at the end of March 2020 and the peak in January 2021. Numbers have steadily fallen since then, and were nearly 23,000, or 10.7 percent, lower than the peak by 30 June.

The June quarter usually sees a rise in benefit numbers, so the fall recorded this year is a pleasing reversal of that seasonal trend. More than 10,000 people who had been on benefit for over a year found work in the June 2021 quarter.

There has been a concerted effort this year to provide upskilling opportunities and to match unemployed people to available jobs. This has resulted in higher numbers of people moving out of the benefit system into work than at any time since electronic records started 25 years ago – over 113,000 in total, including almost 100,000 from Jobseeker Support.

Jobseeker Support (JSS) volumes and cancellations for work, since the start of the nationwide COVID-19 lockdown (March 2020)

Date JSS recipients Cancellations in month (obtained work)
31 March 2020 151,746 5,016
30 April 2020 184,404 2,487
31 May 2020 189,519 5,331
30 June 2020 190,456 6,764
31 July 2020 192,488 6,687
31 August 2020 197,227 6,135
30 September 2020 204,117 7,025
31 October 2020 203,371 8,587
30 November 2020 204,111 9,065
31 December 2020 212,469 6,435
31 January 2021 213,006 7,650
28 February 2021 208,335 9,363
31 March 2021 201,300 11,043
30 April 2021 196,236 8,502
31 May 2021 193,380 9,504
30 June 2021 190,257 9,390

Giving clients a positive experience

Our Client Net Trust Score has remained high at +39.8, compared with +43.2 in 2019/20. This year the Client Net Trust Score was based on contact centre interactions only: a system change in 2019/20 meant we were unable to survey service centre clients in 2020/21 . Historically, results for conversations with contact centre staff have been scored lower than for conversations with service centre staff. Lower scores for phone-based interactions compared to face-to-face interactions is common in many other private and public sector organisations. This year’s score is higher than that for contact centre interactions in 2019/20 of +37.9.

Heartbeat surveys this year were conducted only among clients who had contacted call centres . We sent out over 785,000 surveys this year at an average of 65,000 a month, with a good response rate of 7.7 percent.  While about 76 percent of clients responded that their interaction with our staff was a very positive experience, comments in survey responses indicate that clients still struggle to understand the benefit system and our self-service tools do not meet all of their needs.

More people are using the My MSD app to manage their benefits – 88.1 percent of clients on benefit at 30 June 2021 were using MyMSD, compared with 85.5 percent a year before. The proportion of benefit and supplementary assistance applications lodged online went down slightly, from 53.8 percent to just under 52 percent (almost 410,000 out of 790,000).

Use of our online eligibility guide Check what you might get was also much higher, with over a million visits to the guide were recorded in the year.

Some comments from clients highlight that we still have opportunities to improve, with some clients experiencing multiple different contact points from application for benefit to receiving payment, and inconsistent information capture across MyMSD. These improvements will require fundamental changes to the welfare system in line with the welfare overhaul work programme.

Helping more students with loans and allowances

We experienced a big increase in demand for Student Loans and Allowances during our peak student application season, which commenced with the launch of the annual Call to Action campaign on 13 September 2020. The campaign encourages students to apply by 16 December to give them the best chance of having everything in order before starting study the following year. Of the applications received between 13 September 2020 and 13 March 2021 (the start of the academic year), 60 percent were received by 16 December.

Between 13 September and 13 March, StudyLink processed more than 240,000 applications – 5.3 percent more than during the same period last year. By 13 March 2021 we had finalised 90 percent of applications received by 16 December, and 61 percent of those received after 16 December.

The increase in applications this year is probably at least partly due to the impacts of COVID-19. The number of people seeking student support generally increases in times of economic uncertainty: mature students who have lost their jobs or had their hours reduced seek to upskill, and more young people choose tertiary study on leaving high school.

Working with clients who owe us money

The overall amount of debt owed to MSD has been increasing, but at a relatively stable rate over the last few years. By 30 June 2021 the total of debt balances owed was $1.995 billion (2020: $1.833 billion). There are more than 570,000 people with debts, which average $3,498.

Around 7 percent of the total debt balance is fraud related. In recent years we have shifted our focus from debt establishment and prosecution to prevention and early intervention. This is in line with our increased focus on fraud prevention, which was endorsed by the Welfare Expert Advisory Group.

This approach has seen overpayment, investigation and prosecution numbers fall as we focus our investigation and enforcement response on the most serious fraud and address lower-level integrity issues through engagement, education and compliance.

COVID-19 has made it harder for some people to repay debt. We are working with other government agencies to improve the management of debt: this includes looking at how broader policy settings could support reducing debt. Agencies are also exploring how they can work more collaboratively. For example, we are piloting a joint approach with Inland Revenue to supporting common debtors by making it easier for them to keep their repayments going, increasing the accuracy of entitlements, and granting relief that reduces financial hardship.

Our integrity programme helped us to recover almost $725 million in COVID-19 Wage Subsidy payments

Between March 2020 and March 2021, we paid out more than $14 billion to employers and self-employed people to help keep people in work during periods of elevated alert levels. These payments were made in a high-trust environment, after Cabinet had agreed that information could be verified after the payments had been made.

With the support of the Ministry of Business Innovation and Employment Hikia Whakatutuki (MBIE), Inland Revenue Te Tari Taake (IRD) and the Treasury Te Tai Ōhanga, we developed an integrity check programme for the Wage Subsidy to provide assurance around application integrity within the context of a high-trust model. In developing the integrity check programme, we took account of lessons learned from previous subsidies enacted following the Christchurch and Kaikōura earthquakes.

The approach included pre- and post- payment checks of employer details, a co-ordinated complaints process, a thorough investigations process, and a repayment process.

The publication of employers’ names ensured transparency about who had been granted assistance and meant employees or other interested parties could raise concerns .

Many businesses have voluntarily refunded subsidies when their eligibility changed, or because revenue was better than expected. As at 25 June 2021, repayments worth $778.5 million had been identified of which $724.8 million (more than 93 percent) had been repaid.

In its May 2021 report Management of the Wage Subsidy scheme , the Office of the Controller and Auditor-General Te Mana Arotake has acknowledged the extraordinary circumstances facing the Government when it created and implemented the Wage Subsidies and other COVID-19 payments. The report noted that many of the steps taken by public organisations to protect the integrity of the Wage Subsidy were consistent with good practice guidance for emergency situations. We have taken the recommendations of the report into account in our approach to managing later iterations of the Wage Subsidy.

Helping New Zealanders through adverse events

Canterbury floods

On 29 May 2021 a complex low-pressure system brought severe heavy rainfall for the Canterbury region. The region suffered from extensive surface flooding, resulting in large-scale evacuations and states of emergency being declared. Rural communities were the most affected, with extended flooding across farmland, significant stock losses, and roading disruptions. Civil Defence payments were activated for people who were affected by the flooding, and on 4 June the Government activated Enhanced Taskforce Green (ETFG), making $500,000 available to help with the clean-up. The rapid deployment of support payments and ETFG have been well received.

Auckland tornado

On 19 June 2021 a tornado went through South Auckland, leaving one person dead and another with  moderate injuries. We worked with Auckland Emergency Management (AEM) to provide welfare support to the adversely affected community. Civil Defence payments were made available, and our offices and contact centres extended their operating hours to provide services and support.

Napier rainfall event

The Tairāwhiti region experienced a severe rain event on 20 June 2021 that caused widespread serious flooding and damage to homes in Tokomaru Bay and forced some families to self-evacuate. Civil Defence payments were activated. In addition the region also made a $10,000 flexible fund available for Ngāti Porou to administer for urgent support required.

We collaborated with local response agencies to ensure people were well informed about and had easy access to the full range of services and support available to them.


Footnotes

  1. From 12 August 2020, Auckland was raised to alert level 3 with the rest of New Zealand moving to level 2. Auckland moved back to level 2 and the rest of the country to level 1 from 30 August, with Auckland returning to level 1 on 21 September.

  2. Auckland moved to level 3 from 14 February 2021, with the rest of New Zealand elevated to level 2 at the same time. All regions dropped one level on 17 February, with Auckland returning to level 1 on 22 February.

  3. Auckland moved to level 3 from 28 February 2021, with the rest of New Zealand elevated to level 2 at the same time. All regions dropped one level on 7 March, with Auckland returning to level 1 on 12 March.

  4. We restarted surveys for service centre clients in July 2021.

  5. We recommenced surveys amongst clients with case management from July 2021.

  6. https://check.msd.govt.nz/

  7. For privacy reasons, we did not publish the names of sole traders or employers with fewer than three staff.

  8. See https://oag.parliament.nz/2021/wage-subsidy/docs/wage-subsidy.pdf