Tuesday, April 16, 2024

Cost of Living payments reach more than four million

More than four million Cost of Living payments have now been made, Revenue Minister, David Parker said today.

The Minister said the number was expected to grow to more than six million payments once the remaining eligible people filed their tax returns by the first quarter of 2023.

Up-to-date information was released by Inland Revenue today in its final summary report after the third Cost of Living payment on October 3.

The total Cost of Living payment of $350 is being made in three instalments of about $116.

Mr Parker said the targeted support would help to “take the hard edges off” for Kiwis feeling the pressure of higher prices.

“The payment was designed to get the money into people’s hands as quickly as possible and the best way to do that was by using the available information held by Inland Revenue to determine eligibility,” Mr Parker said.

“The criteria for eligibility that were agreed by Cabinet have always been absolutely clear and remain the same. They include that a person has to be present in New Zealand to be eligible for the payment.”

IR has continued to work on refining the screening tests for eligibility to the payment to ensure it went to those intended.

“While IRD records are good they are not perfect, so a small percentage of payments went to people who, for instance, were overseas but had a New Zealand address in IR’s data sets,” Mr Parker said.

“The only alternative – requiring people to apply – would have taken much longer, cost far more in wasted administration than would be saved, and seen many eligible people, who did not apply, miss out because of the extra administrative barrier.”

IR has estimated that an application-based scheme would have cost $30 million to administer – $14 million more than the administration cost of the scheme put in place.

“As the three payments were rolled out IR has refined its screening tests, leading to a significant drop in payments going to ineligible people, over the course of the three instalments.”

“The most significant changes were made between the first and third instalments, after I questioned IR about the tests it was applying and whether further screening tests could be used. The Auditor-General also expressed concerns,” the Minister said.

IR estimates 1.7% of expected payments had been made to recipients who are potentially overseas, and so may not be eligible.

“This percentage will fall as some of those recipients subsequently confirm they are in New Zealand and as further information is available from New Zealand Customs,” the Minister said

He said the amount paid to people who are potentially overseas is $12.6 million, which is less than the extra cost of an application-based alternative. Some of those assessed as potentially overseas will be eligible, so that figure of $12.6 million will drop as some confirm they were in New Zealand and therefore were eligible.

“If people believe they should receive a payment and don’t get one, they can contact Inland Revenue to confirm they are eligible,” Mr Parker said.

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