29 Aug 2022

'Do the right thing' poverty action advocates tell govt as refunds unfairly taxed

From Checkpoint, 6:08 pm on 29 August 2022

"You guys have the power to do the right thing so why don't you." That message to the government from an advocate who says wrongly sanctioned beneficiaries are being punished again by tax laws.

Section 70A sanctions meant a woman's benefit was docked $28 a week if they could not or would not name a child's father.

In 2020 the government scrapped the sanction and a number of beneficiaries got lump sum refunds after seeking reviews.

But those payments are being treated as income, meaning some women have been bumped up a tax bracket leaving them with a bill rather than a bonus payment. Auckland Action Against Poverty coordinator Brooke Stanley Pao says they've challenged the Ministers of Revenue and Social Development to right the wrong and change the tax law.

In a statement to Checkpoint Revenue Minister David Parker said: "I acknowledge that these payments are made to people who may be in difficult circumstances and of the hardship that this can cause. I have asked my officials to develop a solution to this, and they are working through it."