National is writing to the Auditor-General for an independent investigation into the scale of the cost of living payment issue, which has seen individuals offshore receive money intended to help Kiwis in Aotearoa struggling with rising prices.
Finance spokesperson Nicola Willis on Tuesday labelled it a "significant misuse of taxpayer funding" and also said it could be an "issue of law" as the legislation enabling the payments explicitly say individuals are only eligible if they are "present in New Zealand".
She wants ministers to apologise "for recklessly going ahead with a scheme that they were warned would lead to ineligible people getting payments".
It also turns out just 1.32 million people have received the payment, fewer than the 2.1 million the Government said was estimated to be eligible for it. The Inland Revenue Department (IRD) says this is expected to increase with the next rounds of payments as more tax returns are processed.
Revenue Minister David Parker continues to defend the policy, saying the vast majority of recipients are in New Zealand and the "only alternative" to the automated process IRD used would be to have Kiwis apply. He said this would be costly, time-consuming and lead to some people missing out.
The payment was first announced at the May Budget as a "targeted" means of support for low- and middle-income New Zealanders who didn't benefit from the Government's recent increases to benefit rates, the minimum wage and other supports.
The eligibility criteria states the payment should only go to New Zealand tax residents present here, aged over 18, who earn $70,000 or less and aren't entitled to the Winter Energy Payment.
The IRD told Newshub on Tuesday that 1.45 million people have so far met the eligibility criteria, with $154.5m being paid out to 1.32 million people so far. That's far fewer than the estimated 2.1 million New Zealanders the Government has touted will benefit from the policy.
"There are still around 134,000 customers who we don’t have bank account information for," a spokesperson said.
"Inland Revenue will be running eligibility checks every day. We expect the number of people meeting the eligibility criteria to increase towards the 2.1 million over time, as 2022 income tax assessment are finalised; IR3 income tax returns are completed; and, partners of Working for Families recipients have their returns finalised."
There has been an increase in web traffic and myIR log-ins, the spokesperson said, and systems are "performing well".
Newshub has heard from individuals offshore - both Kiwi expats and foreigners who previously worked in New Zealand before departing - who were notified over the weekend that they would receive the payment.
One individual, Benoit, was in New Zealand for about a year-and-a-half before returning to France in June of last year. He told Newshub had been here on a working holiday visa and spent time working on an orchard around Whangarei.
While he enjoyed his time in New Zealand, he doesn't want our Government's support.
He said when he received the email from IRD telling him he would get the payment he was "really surprised", thinking he had closed his bank account here and tidied up loose ends.
"I enjoyed all my time in NZ, especially during the lockdown because I found a farm in Kiwi family with some other backpackers. So, thank you NZ people for taking care with strangers like me during this difficult period," he said.
"I believed all these kinds of stuff was ended… I won't claim this money because I don't need it. Moreover, in France, we already have lots of help," he said.
Willis told reporters on Tuesday that her inbox has been "inundated" with people around the world saying they received the payment despite not being eligible and "frankly, feeling it's quite embarrassed that they have received it".
She also said the legislation enabling the payments clearly says the "main eligibility criteria for an individual receiving the payment" includes "both New Zealand tax resident and present in New Zealand".
"We will therefore be writing to the Auditor General today to ask that an independent investigation be carried out to determine just how wide the scale of this problem is and to determine whether taxpayer funds have been used without the proper authority of Parliament."
It's unclear how many ineligible people have received the payment. An IRD spokesperson told Newshub "that's because we base someone’s eligibility on the information we hold at the time of assessing their eligibility".
"If they don’t tell us, for instance, that they have moved overseas, we won’t know they’ve gone."
Parker believes it could be about 1 percent of the estimated 2.1 million people who got the payment. That would be equal to roughly 21,000 people - or $7.35 million paid out.
"We know that the vast majority of people who got PAYE at the end of last year are still in work, so we know the percentage of people for whom IRD's data is inaccurate is a very small percentage," he said on Tuesday.
"I think Inland Revenue is doing a good job. The only alternative would be to make 2.1 million people apply for it and to consider those applications one by one, which, one, would have been an incredibly costly process, two, it would have cost a lot of money, and three, we know if you run application processes, a lot of people who are eligible miss out. So the process that we have chosen is preferable."
Willis said she's concerned "the scale of this could in fact be enormous".
"The scope could actually be massive. We know that there are a million New Zealanders living overseas. The question is how many of them have a dormant bank account that the IRD has just thrown some money into?"
IRD says it won't chase up people who have incorrectly received the payment unless they have "deliberately given us incorrect information".
Willis said it would be right for people who received the money to pay it back.
She wants ministers to apologise.
"David Parker should apologise and the Prime Minister and her Cabinet should apologise for recklessly going ahead with a scheme that they were warned would lead to ineligible people getting payments. They were warned they went ahead anyway."
Advice to Government ministers in May, ahead of the policy being announced, said some of the information Inland Revenue holds "may not be up to date".
"This would mean some people who should receive the payment may not, and conversely, some people who received the payment should not have," it said.
The IRD said it used 2022 tax assessments to determine who is eligible for the scheme, but has also told media people may get the payment if they received income into a New Zealand bank account from the likes of bank interest.
Both Parker and the Prime Minister have said this automated approach is more efficient than requiring Kiwis to apply for the payment.
But Willis said an alternative could be National's proposal of adjusting tax thresholds to inflation. However, that has come under some criticism for giving more money back to people on higher incomes and for leading to a reduction in revenue the Government has to pay for public services.
