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The payments will be paid until 2022 and are intended to help low- and moderate-income earners offset the effects of inflation.
photo: RNZ/Rebekah Parsons-King
Less than 14% were paid incorrectly Living allowance The man never repaid the money, the IRD said.
The payments will be paid until 2022 and are intended to help low- and moderate-income earners offset the effects of inflation.
Payable in three installments, totaling $350.
But the tax office has had to contact 80,000 people thought to have received at least one payment in error, including those who have left the country and the unemployed, and they have been asked to return the money.
A spokesman said the total number of people who have repaid living expenses is 10,985.
“We did see an increase in repayments received as a direct result of a letter being sent to a group of customers who may not have qualified for one or more payments. The letter prompted customers to review their eligibility and while we saw an increase in repayments as a result of the letter, we were unable to determine whether repayments were made due to ineligibility. Some customers made repayments simply because they did not want the payments, despite qualifying.”
She said the ATO chose not to take enforcement action against people who failed to repay unless it believed they had knowingly provided false information and obtained payments by fraud.
ACT finance spokesman Todd Stephenson said the policy was poorly implemented.
“ACT said at the time we thought this was a very poorly targeted and poorly designed policy. We advocated for the Government to cut spending and allow New Zealanders to keep more of the money they earn.”
He said IR should have tried harder to recoup the money. “They should have tried harder to recoup the money, but as I said, it was a poorly designed policy that should never have been implemented.”
A July 2023 IR report put the cost of these payments at $573 million.
Infometrics chief forecaster Gareth Kiernan said the payments would add less than 0.1 percentage point to inflation.
“The size of the economy in the December quarter of 2022 is $98.342 billion, so if households spent all the extra money over three months, and that money was funded by Government borrowing and did not replace any other Government spending, it would add almost 0.6 per cent to economic activity in the quarter.
“When we compare these payments to the $62 billion overall COVID-19 Response and Recovery Fund (CRRF) or the impact of rate cuts on debt servicing costs, in the grand scheme of things, these payments are modest.
“If CRRF spending is spread over three years, it would be equivalent to about 5.7 per cent of the economy; Statistics New Zealand national accounts data shows that annual household interest payments fell by $2.1 billion between December 2019 and December 2021, equivalent to about 0.6 per cent of GDP in 2021.”
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