Photo: Rebekah Parsons-King, Radio NZ
Photo: Rebekah Parsons-King, Radio NZ

PoliticsMay 16, 2019

Everything you need to know about the report into beneficiary fraud investigations

Photo: Rebekah Parsons-King, Radio NZ
Photo: Rebekah Parsons-King, Radio NZ

A report into the Ministry of Social Development (MSD) revealed that the means of investigating benefit fraud, in particular, the relationship statuses of beneficiaries, infringed on their right to privacy. The Spinoff explains what the investigation is all about, and why it matters.

Why was there an investigation?

In 2018 the Privacy Commissioner heard concerns about the way the MSD gathered information about beneficiaries when conducting fraud investigations, thus sparking an investigation into their current practices.

These investigations usually centred around allegations that a person receiving a domestic purposes benefit was in a relationship, particularly a marriage, in which case a benefit could be decreased or taken away entirely.

The MSD Code of Conduct was amended in 2012, and according to the MSD, these changes meant investigators could go straight to third-party agencies to collect information about beneficiaries, without asking them first. The report said sometimes people were unaware they were even being investigated.

What is the practise and when did it emerge?

Before 2012 the MSD was, in most cases, required to ask beneficiaries for information directly, but the Privacy Commissioner’s report says in 2012 the MSD’s fraud investigation staff were told they could go straight to third parties.

This meant that investigators could collect highly sensitive information including text messages, domestic violence records and banking records.

The Privacy Commissioner says this may not be legal, which is inherently a big deal. Breaking the law to prove someone else is breaking the law is… not legal, whether you’re a government agency or not.

How do private text messages help in these investigations?

It’s not entirely clear, and Viv Rickard, the MSD’s deputy chief executive for service delivery, told Morning Report the texts and private communications were used in conjunction with other evidence to build a case that someone was in an undeclared relationship.

Clearly, unless people are in the habit of texting each other confirming their relationship status and home address, texts are quite a shaky piece of evidence to prove that a beneficiary is living with their partner.

In one case a woman was presented with intimate photos of herself she’d sent to a partner, during a meeting with MSD staff. Privacy Commissioner John Edwards condemned this tactic in an interview on RNZ’s Morning Report, saying it was an ‘extraordinary’ incident.

“That kind of content normally is regulated by an independent judicial officer with a warrant, these are just letters of demand sent out by MSD investigators.”

MSD accessed some people’s intimate texts and images. Photo: Getty Images

Are there other downsides of going straight to third parties?

Apart from the general downside of treating beneficiaries like they have less rights to privacy than other citizens, the report also said sometimes the MSD uses police reports of domestic violence to figure out whether a beneficiary is in a relationship.

“Using that as potential evidence that they were in a relationship is pretty disturbing. The message that it sends to women who we really hope would reach out for help in those situations is pretty confronting,” said Edwards.

It’s a move that could potentially discourage victims of domestic violence from reporting their cases to police, for fear of having their benefit reduced or taken away.

How many cases have been investigated in this way?

The report says MSD has kept poor records and there are inconsistencies in reports between fraud teams, making it hard to establish just how many investigations have been going straight to third parties for evidence.

The 2012 changes to the Code said bypassing of beneficiaries could only happen in cases deemed ‘high risk’, but this poor record keeping means it’s impossible to know whether this was being adhered to.

What has the Privacy commission recommended as a result of the report?

There are five recommendations. These include a comprehensive and immediate review of the investigation Code, and accurate record keeping introduced.

The report also says all fraud investigation teams must undertake new training and guidance around natural justice and procedural fairness obligations, Bill of Rights obligations and privacy awareness.

What has the MSD said about the report?

Rickard said he accepted the recommendations made in the report, but did not believe that the ministry had been acting outside of the law.

“We act under legislation that allows us to go and get the information, which is very clear… Under the legislation we have at the moment, we are allowed to collect information from third parties, so we’re acting within the law.”

The MSD has suspended all requests to telecommunications companies and police following the report’s release, and say their Code of conduct will be reviewed, as per the Privacy Commissioner’s recommendation.

However, Rickard also addressed the use of domestic violence reports in investigations, saying he didn’t like the practice.

“I don’t like the sound of us going to police seeking information about family violence because those people are already victims and we don’t want to make things worse.”

How long has the MSD been doing this?

The report points to the likelihood that since 2012, some investigations have been conducted in this manner.

Green Party spokesperson on Human Rights, Golriz Ghahraman, said in a statement that the behaviour emerged under National’s leadership, and is inexcusable.

“A State Services Commission report last year showed that a culture of surveillance and intrusion into people’s private lines had emerged under the last Government and this needs to stop, permanently.

“MSD’s culture of enforcement and intrusive inquiry shows that we need to put the heart back into our social support system and support people to thrive rather than intruding in their private lives.”

Is there a cultural problem in the MSD?

Morning Report’s Susie Ferguson put this question to Rickard, but he didn’t answer.

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