Debt is the result of an error - provisional write-off

The definition of 'error' in regard to the provisional write-off of debts (established before 26 September 2002) is very broad. A debt is considered to be the result of an error when a:

• benefit is paid and there is no entitlement
• benefit is paid at a higher rate than there is entitlement to or
• incorrect advice from Work and Income about a debt has contributed to a client's indebtedness

Work and Income advises a client that they owe a certain amount. Work and Income then realises that the debt had been calculated incorrectly and that the person actually owes more money than they were advised.

The portion of the debt that was omitted by Work and Income can be considered for provisional write-off because its omission was the result of an error.

A debt is not considered the result of an error when:

• a compensation payment is subsequently received, benefit entitlement is reviewed retrospectively and an overpayment established
• a benefit is paid provisionally under section 228 the grievance action is unsuccessful and misconduct is later proved. Provisional benefit then becomes a debt.
• legislation provides for entitlement to a benefit, but a subsequent function of the legislation creates a debt.
  For example, a client on New Zealand Superannuation travels overseas intending to stay less than 30 weeks. They are entitled to receive their pension for up to 26 weeks. They later decide to extend their overseas holiday to 40 weeks. Benefit paid during the initial 26 weeks of absence subsequently becomes a debt. The resulting debt is not as a result of an error.

For information about the other criteria that must be met, see:

• Changed their position
• Did not intentionally contribute
• Inequitable in all circumstances
• Received the money in good faith

Note these criteria are the same as for debts established on or after 26 September 2002.

Also see:

• Legislation before 26 September 2002