The Ministry of Social Development has confirmed that some people had their benefit payments wrongly suspended because staff could not keep up with the paperwork created by a law change, two days after the Social Development Minister told Parliament that had not happened and a week after the Prime Minister gave the same assurance.
The law is the Social Security (Mandatory Reviews) Amendment Act 2025. It requires the ministry to check at least once every 52 weeks whether people receiving certain payments are still eligible and on the right rate. The payments covered include the supported living payment, the emergency benefit, the accommodation supplement, the disability allowance and New Zealand Superannuation paid to someone with a non-qualified partner. The explanatory note to the bill says automated decision making would be used to administer parts of those reviews so that frontline staff were freed up. The law came into force on 2 March this year.
Two separate failures have now been traced back to it. The first surfaced a fortnight ago, when thousands of superannuitants and veterans missed out on their Winter Energy Payment. That payment was not on the list of payments exempt from suspension, so when someone was reviewed for another entitlement their winter payment could stop as well. The ministry said 14,862 superannuitants and veterans had their Winter Energy Payments affected between 1 May and 7 August, and that a review completed on 13 August identified roughly 4000 to 6000 people who still needed remediation. Christopher Luxon and Louise Upston apologised for that error on 18 August.
The second failure is the one the ministry confirmed this week. So many people were returning forms confirming their circumstances at once that some of those forms were not processed in time, and payments stopped even though the person had done what was asked of them.
“Some responses were not fully processed before their expiry date, and some payments were suspended despite people providing the information we requested,” the ministry’s service delivery group general manager Shannon Soughtton told RNZ.
“We apologise to those affected and recognise the impact this may have had.”
Soughtton said all payments had resumed and been backdated, and that processing volumes were “now back at expected operating levels”. The ministry could not say how many people were affected, or for how long, because that information sits in individual client files rather than in any central count.
What lifts this above an administrative stumble is what ministers had already told the House. In question time last week, Green MP Marama Davidson asked Luxon whether he was confident “that the use of automated decision-making and mandatory reviews has not resulted in wrongful cancellation of main benefits such as jobseeker or the supported living payment due to processing delays or errors”.
Luxon replied “Yes, and I’m very supportive of the use of those tools in order to be able to free up staff to be able to support others with more complex needs.”
Upston faced the same ground from Green MP Ricardo Menéndez March on Tuesday. Asked whether any main benefits had been wrongfully cut through the confirming your circumstances process, she answered “No”. Pressed on whether the mandatory review policy had led to benefits being suspended through processing delays, she confirmed there had been delays and said the expectation had been that more people would complete the change of circumstances online rather than on paper. Asked directly whether those delays had resulted in any benefits being cut, she answered “Possibly”, then said her time for the debate had run out and asked MPs to put the rest in writing so she could give “full answers”, according to RNZ’s account of the exchange.
Upston later told RNZ she was very disappointed that people’s benefits had been suspended. “It should not have happened,” she said. “I appreciate the impact it will have had on those affected. I expect MSD to manage its operational workloads.” She made no comment about her answers in Parliament. RNZ said Luxon had been approached for comment.
The parliamentary record shows how fast this law was made. Parliament’s page for the bill records that it was introduced on 22 May 2025 and agreed at both its first and second readings the same day. No dates appear against the select committee stage. The committee of the whole House finished with it on 3 June, the third reading was agreed on 24 June, and it received the Royal assent on 27 June. That is just over five weeks from introduction to law, with Upston as the minister in charge.
Opposition MPs have gone straight at that timeline. Menéndez March, the Green Party’s social development spokesperson, said Upston should explain exactly how many people were left without their benefits and should resign if she cannot. He argued the episode exposed the weakness of running the system on automated notifications without enough people behind them.
“What we have is an algorithmic decision-making system that spams beneficiaries without guaranteeing that there will be enough humans to process that documentation without benefits being suspended,” he said.
“This is just the complete failure of a system … that was rushed consistently under urgency and without the minister adequately allowing this automated decision-making system to be put under adequate scrutiny, resulting in people’s livelihoods being on the line.”
Labour’s social development spokesperson Willow-Jean Prime said “To botch things up this bad for struggling Kiwis is outrageous”, and called on Upston to “front up and take accountability for her rushed law-making and job cuts that created this mess”.
Two things will decide how far this runs. The first is whether the ministry can eventually produce a number for how many people lost a payment they were entitled to. Without one, nobody can say whether this touched a few dozen households or a few thousand, and the ministry’s own answer is that it does not know. The second is whether Luxon and Upston correct the record in the House. Ministers are expected to do that when an answer given to Parliament turns out to be wrong, and Upston has already accepted in writing to RNZ that suspensions happened. With Parliament down to its final sitting days before the election, the window for doing it is narrow.
Welfare administration seldom decides an election on its own. What it does show is how a government makes law when it is in a hurry, and whether ministers know what their own agencies are doing when they stand up to answer for them. If you want to compare where the parties sit on welfare and on the rest of it before you vote, our voting tool lets you line the policies up side by side.
Have you or someone you know had a payment stopped after being asked to confirm your circumstances? Tell us what happened in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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