Trouble with Work and Income: Penalties, investigations and overpayments
What is a “sanction”?
When you are getting a main benefit, you have obligations that are specific to each benefit type and depend on your situation (see: “Types of main benefits” to find the specific obligations).
If you fail to meet an obligation without a good and sufficient reason, your benefit can be reduced or cancelled (“sanctioned”).
The process that Work and Income must follow
Work and Income have a set process they have to follow when imposing sanctions. This includes:
- contacting you to determine whether you have a “good and sufficient reason” for not meeting your obligations,
- notifying you in writing at least five working days before they take the particular action, and
- if it’s your first or second sanction, giving you the opportunity to meet your obligations (“re-comply”) before they impose the sanction on you.
Work and Income must be satisfied that you do not have a good and sufficient reason before initiating the obligation failure. If your benefit gets sanctioned without them making a reasonable attempt to contact you, Work and Income are breaching their own obligations and you can make a complaint to the Ombudsman (see: “The Ombudsman: Watchdogs over government“).
What penalties (sanctions) can be imposed?
The first time you get sanctioned, your main benefit will be cut by half until you meet your obligations (“re-comply”). At this stage, usually just getting in touch with Work and Income and promising to meet your obligations will be enough to be considered re-complying. If you haven’t re-complied within four weeks, your main benefit will be cut entirely until you do re-comply.
If you’re sanctioned a second time within 12 months, your main benefit will be cut entirely until you re-comply (for example, passing a drug test if you previously failed one).
If you’re sanctioned a third time within 12 months, your main benefit will be cancelled. You’ll have to reapply for the benefit, but you’ll have to wait for 13 weeks after the cancellation, and you’ll face tougher eligibility criteria than when you were originally granted the benefit.
Note: If you have dependent children (see: “Key words”), your benefit will only be cut by half, not stopped completely.
Outstanding arrest warrants: Power to cut benefits
Work and Income also have the power to stop your benefit if you have an outstanding arrest warrant. There are two ways this can happen, depending on whether the police see you as a public risk:
- No public risk – If a warrant for your arrest is still outstanding 28 days after it was issued, the Police will tell Work and Income who will then give you 10 working days to clear your warrant – otherwise, your benefit will be stopped.
- Risk to public safety – If the police believe you are a risk to public safety, they will tell Work and Income who can stop your benefit immediately without having to tell you in advance. The police officer who signs the written request to Work and Income must be at the level of inspector or higher.
However, if you have a dependent child, your benefit will only be cut by half, not stopped completely.
Can I get a benefit while in prison or on remand?
Prison – You cannot be paid a benefit while in prison.
If you have a partner and/or dependent children, Work and Income have discretion to pay your benefit to your partner or a temporary caregiver of your children, particularly if your sentence is for a short period of time. However, generally your partner or the caregiver of your children will be encouraged to apply for a benefit in their own right.
On remand – If you are remanded in custody while waiting for your court appearance, Work and Income will generally stop your payments. However, Work and Income have discretion to continue your payments after taking your circumstances into account.
They will consider things such as:
- your financial commitments that can’t be avoided (for example, rent)
- whether you have dependent children or a partner that rely on your financial support
- any other relevant circumstances.