Photo: RNZ
Megan Hunt was horrified to discover at the end of last year that she had a $9000 bill to Inland Revenue for overpaid Working for Families credits.
It happened, she said, because she misunderstood a form that she filled out to register her first child's birth.
That meant the tax department did not know she had a partner and she was assessed as if she were single.
"I've got two children who are now both under two. When I first applied for the birth certificate when I was registering the birth of my first, when you fill in that form there's a bit at the end that says 'do you want to apply for Working for Families'. In the process of filling that information in, I misunderstood what information I was putting in.
"I was a stay-at-home mum and my husband was working. In the preceding part I'd filled in all the details for the birth certificate, my husband's details and it was not apparent at all in that form that the two systems were not linked. I didn't tick the box that said 'do you live with a partner'...it's that simple."
She said it was a few weeks after the birth, she was recovering from post-partum haemorrhage and simply missed the detail. "There's nothing, no context all, there's no indication that the systems aren't linked."
Woman left with IRD debt after Working for Families trouble
She said even the letters she had received since had given no indication that her Working for Families entitlements were being calculated as if she did not have a partner.
"The letters I've had from Working from Families have all said zero entitlement through the year and at the end of the year have said a credit. I thought 'you've got access to all my income, you guys do the maths, I'm not an accountant that must be correct."
Even a letter that referred to a partner did not noticeably have a blank space or an indication that it was expected she did not have one, she said.,
"There was nothing on that letter to me indicating that there was a gap in the information they had. Even registering my second child didn't seem to trigger anything,"
She said it was not until she applied for childcare assistance via Family Boost that the mistake was uncovered.
"They phoned to say 'do you have a partner' and I said 'yes, I'm married', they asked when the relationship started and I said 2020 or whatever, preceding the first child's' birth."
She said she cried when she was told she had a $9000 debt. That was mid-November and she was told the first year's worth of debt was due on 2 December.
She had set up an instalment plan and applied for relief on hardship grounds.
But she said her family would struggle to pay off $9000.
"The communication with IRD has been, to be frank I can't even say it...it's horrific. The correspondence they send, four letters with different due dates, different due amounts within three weeks of the information coming to light. The system has got no idea."
She said the system should be changed to make it clearer to new parents what information was being sent where. "I'm so angry, As a rule-following person… it's stupid."
She asked for information under the Official Information Act that showed that in the 2023/24 tax year there were 77,150 people overpaid Working for Families, worth $144 million. In each of the four previous tax years, the number overpaid was consistently over 87,000 and as high as nearly 100,000.
Inland Revenue said Working for Families debt was $263.668 million in November.
That was down from $280m in May but significantly higher than the $162m of July 2020.
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