Revenue Minister David Parker Photo: RNZ / Samuel Rillstone
Almost $14 million of taxpayers' money was dished out to potentially ineligible New Zealanders through the cost-of-living payment, a document reveals.
Labour was left red-faced in August after its Budget-centrepiece payout went awry with revelations the first instalment went to an unknown number of people living abroad.
The $350 temporary payment was to be paid out in three tranches to adults earning $70,000 dollars or less and living in New Zealand.
An IRD briefing to Revenue Minister David Parker released on Friday identified 76,712 people who had received at least one instalment despite "potentially" being overseas.
The total sum paid to those people was $12.58m.
Another 12,043 payments, totalling $1.4m, were wrongly made due to "coding and administrative errors" by officials - including to 85 people who were dead.
"While we will be making people aware of the obligation to repay any amounts received they were not entitled to, we will not be applying resources to collection action, except in cases of fraud," officials said.
IRD added additional screening checks in August and requested additional Customs data in September to reduce the number of ineligible payments.
According to the briefing, the third instalment did not go to anyone who was not entitled to it.
About 1.3 million eligible people have received the full payment, but the government expects that to climb to more than 2 million as more tax returns are filed.
In a statement, Parker defended the automatic payment scheme, saying it was designed to get money into people's hands "as quickly as possible".
"The only alternative - requiring people to apply - would have taken much longer, cost far more in wasted administration than would be saved, and seen many eligible people, who did not apply, miss out because of the extra administrative barrier," he said.
IRD received $14m to administer the payments; officials estimated an application system could have cost $30m.
National Party finance spokesperson Nicola Willis said the "slap-dash process" had resulted in millions of dollars of taxpayers' money being wasted.
"The real shocker here is that the government was in such a hurry to rush money out the door that it paid no attention to the details."
Willis said the fixes introduced by the time of the third payout could, and should, have been in place from the outset.
"It's a shambles," she said. "Officials warned ministers [the scheme] would be rife with problems. Ministers decided to press play anyway."
The last of the three payments began going out on 1 October.