Elizabeth Murray, Leading Contributor
It has recently come to light that Work and Income has underpaid some beneficiaries since 1998. Instead of rectifying this error by giving additional funds to beneficiaries, the Government seeks to retrospectively change the law to avoid paying for eighteen years’ worth of mistakes. This calls into question the legitimacy of enacting retrospective legislation to fix governmental mistakes.
The error arose from the requirement that a beneficiary must wait for a “stand-down” period of two weeks when applying for a benefit before receiving payments. Section 80BA(4)(a)(i) of the Social Security Act 1964 provides that the benefit is paid from the day the “stand-down” period ends. However, the WINZ computer system was set up to start benefits from the following day.
Beneficiary advocate Kay Brereton explained that this underpayment has affected almost everyone that had been granted a benefit since 1998. Those who have received a benefit more than once would have been affected each time their payments started. Each beneficiary has lost about $40 because of this underpayment. Welfare Commentator Lindsay Mitchell said that it would be fairly easy to find out who was eligible for a repayment, but that it could be difficult and costly to track them down.
The Social Security (Extension of Youth Services and Remedial Matters) Amendment Bill now before Parliament seeks to amend s 80BA(4)(a)(i) to provide that benefit payments commence on the day “after” the stand-down period ends, rather than the day “on which” the period ends. Section 12(1) of the bill provides that this change in the law will retrospectively apply back to 1998. Instead of paying for this error that has affected beneficiaries for eighteen years, the Government is looking to retrospectively change the law to waive its own obligation to repay.
The government continues to defend its decision to adopt this course of action despite criticism from opposition parties. Minister of Social Development Anne Tolley argues that the proposed amendment seeks to correct the law and bring it in line with Work and Income’s actions in practice. She states that the proposed changes in the law reflect the original legislative intention behind the relevant provisions of the Social Security Act 1964.
Enacting retrospective legislation is contrary to the fundamental principles of New Zealand’s legal system. There is a presumption that legislation should be prospective, not retrospective. This common law presumption is enshrined in the s 7 of the Interpretation Act 1999 which states that enactments do not have retrospective effect. A similar presumption is engaged by the New Zealand Bill of Rights Act 1990, which provides that a person cannot be convicted of an offence that was not illegal at the time the offence occurred. Where the government wishes retrospective legislation to take effect, there is a normative expectation that it provides an explanation for doing so, and the courts tend to read down retrospective legislation.
There is a more fundamental question as to whether the Legislature should be employed to cure faults in the Executive’s practices. The law in New Zealand is clear that we should not ordinarily approve of retrospective legislation as it infringes upon the rights of individuals protected under the law; precluding them from seeking remedies from the Courts when they have been wronged by the State.
In this situation, the Executive is simply using the legislation to avoid footing the bill for its own mistake rather than attempting to uphold the rights of citizens or change a law that was unjust in its operations. Beneficiaries are losing out on money they are legally entitled to. It is regrettable that our constitution allows the Executive to avoid the consequences of having failed in its duty, established by law, to help vulnerable members of our society. The forty dollars in question might not seem like a lot to many New Zealanders, but to those relying on governmental assistance it can make a huge difference.
Attempts to enact retrospective legislation should always be heavily scrutinised to ensure citizens’ rights are not being infringed. In this case, it appears the Executive is trying to cover up past mistakes by fixing the law to allow their actions. The Executive’s supreme position in our constitutional system should not be employed to disadvantage the most vulnerable members of our society, who rely on the government for their survival. The ability of the Executive to do so reflects the dangerous lack of limitations on Executive power in New Zealand.
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