A second major error at the Ministry of Social Development has caused people to miss out on benefit payments, just weeks after the government apologised for thousands of pensioners losing their Winter Energy Payment, writes Henry Oliver in today’s excerpt from The Bulletin.
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Yesterday, RNZ’s Lauren Crimp reported that a second major error at the Ministry of Social Development (MSD) has seen people miss out on benefit payments. This is the latest failure resulting from a “rushed law change” passed under urgency last year, which requires beneficiaries to reconfirm their circumstances every 52 weeks.
Due to the high volume of people re-confirming their circumstances, “some responses were not fully processed before their expiry date, and some payments were suspended despite people providing the information we requested,” said service delivery group general manager Shannon Soughtton. “We apologise to those affected and recognise the impact this may have had.”
MSD could not confirm how many people missed payments or for how long, because the information is held in separate individual client files. All payments have since resumed and been backdated, Soughtton said.
The Winter Energy Payment debacle
Another MSD error from earlier in the month, saw close to 15,000 pensioners miss out on the Winter Energy Payment this year. The new law required them to prove their eligibility for a payment that has no means testing – a simple administrative oversight perhaps, but one that meant thousands of pensioners had their payments suspended simply because they hadn’t confirmed their eligibility for a payment that doesn’t require it.
Prime minister Christopher Luxon told the Herald it was “unacceptable” and social development minister Louise Upston said it was “appalling” and she would “make sure it doesn’t happen again”.
Labour says MSD and Upston were warned
But Labour says Upston should have known about the issues earlier. The Post’s Henry Cooke reported that Labour had emailed Upston about the Winter Energy Payment problem in June – months before she told the house she first became aware of it. An email from Chris Hipkins’ office, seen by Cooke, with the subject line “Winter Energy Payment threatened to be stopped?” was sent to MSD with Upston CCed.
Upston told The Post she had never seen the email. “My office has identified one piece of correspondence on the date referred to,” she said. “I can confirm this email was addressed to and requested a response from MSD, as is appropriate. My office was copied in and managed the email through a standard process. I was not directly made aware of it.”
A ministry whistleblower told The Post the issue had been, in Cooke’s words, “bubbling away for months”.
A ministry struggling
The problems at MSD are not new. In 2025, the ministry apologised for months of benefit and housing data not being published because of a broken IT system, RNZ’s Lauren Crimp reported at the time. The ministry was in the midst of a 10-year, $2bn overhaul of its 30-year-old IT systems, which are “so clunky they hold up benefits”. In 2024, RNZ also reported that nearly one in four beneficiaries could be receiving the wrong level of support due “case complexity [and] staff having to navigate multiple frontline systems”.
The latest errors (two in two weeks) raise questions about whether the rushed law change – and the ministry’s ability to implement it – have been properly thought through. If, as the whistleblower told The Post, the Winter Energy Payment issue had been known internally for months, why did it take thousands of people missing out on payments for the government to find out? And now it knows, what is it going to do about it?
