{"id":291013,"date":"2026-02-19T03:52:08","date_gmt":"2026-02-19T03:52:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/291013\/"},"modified":"2026-02-19T03:52:08","modified_gmt":"2026-02-19T03:52:08","slug":"govt-to-reverse-court-ruling-on-msd-debts-impacting-40000-including-abuse-in-care-survivors","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/291013\/","title":{"rendered":"Govt to reverse court ruling on MSD debts impacting 40,000, including abuse in care survivors"},"content":{"rendered":"

Recently, the High Court ruled MSD was wrong to do this, but the Government disagreed and has introduced legislation<\/a> to reverse the court decision.<\/p>\n

Shannon Soughtton, MSD group general manager of service improvement and delivery, said the Government was updating legislation to bring it in line with current practice and the intention of a long-standing policy. <\/p>\n

Officials had briefed political parties on the potential impact of the changes. Soughtton said the 40,000 figure was the most up-to-date available and represented \u201cthe number of clients whose debt we would have had to consider retrospectively reviewing if these changes had not been made\u201d.<\/p>\n

There was no other impact on their current situation with MSD, she said. <\/p>\n

Survivors left \u2018worse off\u2019 <\/p>\n

Rupert O\u2019Brien, law reform co-ordinator for Community Law Centres Aotearoa, said a portion of the 40,000 people expected to be impacted were survivors of abuse in state care<\/a>. <\/p>\n

In 2024, a landmark Royal Commission inquiry revealed \u201cunimaginable\u201d and widespread abuse in state care and faith-based institutions between 1950 and 2019. About 200,000 people were abused and many more were neglected, with M\u0101ori disproportionately affected and subjected to overt and targeted racism.<\/p>\n

\u201cSurvivors will be worse off now and, going forward, they have had money taken from them and debt created unlawfully, and this is being validated by the legislation,\u201d O\u2019Brien said. <\/p>\n

Social Development and Employment Minister Louise Upston said people who received welfare assistance while waiting for the ACC to decide on their entitlement and then received an ACC lump sum payment were being \u201ctreated more generously\u201d than others.<\/p>\n

\u201cThey are in effect receiving two forms of income support to address one need.\u201d<\/p>\n

Upston said these clients could remain eligible for assistance that only beneficiaries received, such as the winter energy payment.<\/p>\n

\u201cThis would not result in fair treatment between these groups and isn\u2019t in line with the policy intent.\u201d<\/p>\n

Upston confirmed the compensation payments to abuse in care survivors were not affected by the debt law change.<\/p>\n

Green MP Ricardo Men\u00e9ndez March urged the Government to honour the court case instead of imposing debt on a number of beneficiaries.<\/p>\n

\u201cPeople on the benefit receiving supplementary assistance are often living in hardship, and if they are waiting for an ACC claim they would have faced an injury or trauma.<\/p>\n

\u201cThe Government is moving with urgency to legalise slapping beneficiaries with debt because they know what they did was wrong and are worried tens of thousands of people would be seeking to recover these unlawful debts.\u201d<\/p>\n

He said the Greens would campaign in the lead-up to the November general election on introducing a guaranteed minimum income and overhauling ACC. <\/p>\n

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.<\/p>\n","protected":false},"excerpt":{"rendered":"Recently, the High Court ruled MSD was wrong to do this, but the Government disagreed and has introduced…\n","protected":false},"author":2,"featured_media":291014,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[75017,1443,1903,36486,536,1349,12625,14134,170,266,24912,305,42,2959,23787,78,8454,3242,5978,28874,32033,137792,43,90,16402,35299,29946,1072,88372,117726,61,40,38,41,39],"class_list":{"0":"post-291013","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-75017","9":"tag-about","10":"tag-abuse","11":"tag-beneficiaries","12":"tag-care","13":"tag-court","14":"tag-debts","15":"tag-decision","16":"tag-development","17":"tag-government","18":"tag-govt","19":"tag-have","20":"tag-headlines","21":"tag-high","22":"tag-impacting","23":"tag-in","24":"tag-including","25":"tag-large","26":"tag-might","27":"tag-ministry","28":"tag-moved","29":"tag-msd","30":"tag-news","31":"tag-on","32":"tag-reverse","33":"tag-reviewed","34":"tag-ruling","35":"tag-social","36":"tag-survivors","37":"tag-swiftly","38":"tag-to","39":"tag-top-news","40":"tag-top-stories","41":"tag-topnews","42":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/291013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=291013"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/291013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/291014"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=291013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=291013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=291013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}