Peter Boshier. Photo: VNP / Phil Smith
The chief ombudsman has criticised the Ministry of Social Development's compensation scheme for survivors of abuse in care, saying payments have been unreasonably low.
Peter Boshier has published his final opinion on a complaint laid against the Ministry by law firm Cooper Legal, which represents over 1000 abuse in care claimants.
Cooper Legal complained to the ombudsman in 2020 about MSD's historic claims process and how it was revised in 2018, arguing the scheme was unreasonable and unjust.
MSD set up the scheme in 2007, as a way of resolving claims for victims outside of the court system.
In his opinion, Boshier said MSD faced an enormous and complex task in carrying out the scheme, but that aspects of it were "unreasonable".
"While the Ministry appears to be adopting a generally consistent approach to the amount it pays, the rates of compensation are arbitrary and unreasonable.
"The underlying benchmarks for payments are low and the degree of harm to an individual claimant is not fully considered when these are assessed."
Boshier said he shared the concerns of the Royal Commission of Inquiry into Abuse in Care, which found in a 2021 report that redress processes were "failing to produce fair, consistent and adequate outcomes for survivors and their whanau".
He said MSD had not justified why rates of payments were low, compared to payments made by the state for other forms of abuse, and compensation paid overseas.
The average payment to survivors of abuse in care from Ministry of Social Development schemes has been about $20,000 each. The agency has a historic claims process, and a rapid payments process, set up in late 2022, which pays compensation of between $10,000 and $30,000.
Since 30 September 2024, under the rapid payments process, MSD has approved $28,569,499 for 1272 people - an average of $22,460 a payment.
At the national apology to survivors of abuse in care on November 12th, MSD chief executive Debbie Power admitted claims process has often been slow, re-traumatising and litigious.
Boshier said the agency should not be refusing claims on the basis it cannot substantiate it within its own records, and that people should be invited to put forward their own evidence of allegations.
Going through the claims processes had "profound emotional and financial impacts" on claimants and MSD needed to be clearer in its decisions, Boshier said.
That included articulating the process it has followed, the information taken into account, why allegations have or have not been accepted, and why the settlement amount is being offered.
He said it was often not clear at all which allegations the payments were covering, or how decisions were reached.
Boshier did not accept all of Cooper Legal's arguments, including saying there was no evidence MSD "improperly deflates" the severity of abuse to streamline decision-making process, that it was not unreasonable to transfer claims to the Ministry of Education where appropriate, and finding MSD had taken some steps to address inconsistencies between old and new schemes.
Prime Minister Christopher Luxon announced at the National apology to abuse in care victims on 12 November that the government would be pursuing a single independent redress scheme as recommended by the Royal Commission, to be set up next year.
He committed an extra $32 million to speeding up current claims processes.
In a statement in response, Cooper Legal said it welcomed the chief Ombudsman's opinion.
Principal legal partner Sonja Cooper said it was "vindicating" to have many concerns upheld after a lengthy investigation.
Legal partner Sam Benton said there were a number of helpful recommendations MSD could implement now.
He called on the Government to confirm whether the new redress scheme would be open to survivors who were forced to accept inadequate payments before now.
"In light of the chief ombudsman's decision, it is imperative that the government urgently confirms that the redress scheme it is currently designing will allow those survivors who have already accepted arbitrary and unreasonable offers from the Ministry of Social Development to revisit their claims under the new scheme.
"In particular, in a week where it has been revealed that the attorney-general and the minister for social development raised cynical concerns about the need to lower the expectations of survivors of abuse in care, it is striking that the chief ombudsman opinion is that the Ministry of Social Development's current settlement levels are arbitrary, unreasonable and inconsistent," Benton said.
Ministry of Social Development's general manager of historic claims Linda Hrstich-Meyer said the agency received the ombudsman final opinion on Tuesday and is considering the recommendations.
She said MSD would respond to the ombudsman on his recommendations by 31 January.
"Since the complaint was lodged back in 2020, a number of things have changed including the tabling of the Royal Commission report and the introduction of a rapid payment process in late 2022 which has provided more options to claimants."
Hrstich-Meyer said payments are intended to acknowledge abuse and neglect that occurred in state care, and are not compensation for harm and damage suffered.
"We know we have not always got things right and, following the findings of the Royal Commission, we have apologised to survivors for shortcomings in our redress process.
"We will continue to make the redress process better and to make it more responsive to claimants."
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