Social services select committee inundated with submissions opposing retrospective law change

Wednesday, 25 February 2026

Minister of Social Development Louise Upston.

A previous version of this story showed quote marks around the term 'double-dipping' which could have been read as a direct quote from the minister. This was incorrect.

A proposed law change that advocates say will leave vulnerable people $63 million worse off received more than 850 submissions in just 2.5 days.

Stuff has not reviewed all of the 868 submissions made public by the Social Services and Community Committee so far, but ACC lawyer Warren Forster read the first 200 - and he said there is not a single one that supports the law in its current form.

If you aren’t caught up on this issue, you can read about it here. But in the briefest terms: an amendment bill, which was introduced to Parliament under urgency last week, would require the Ministry of Social Development (MSD) to claw back supplementary benefits paid to people who receive loss of potential earnings (LOPE) backpay from ACC.

LOPE are payments that compensate people for personal injuries sustained before they turned 18, or while they were studying. Supplementary benefits include support like accommodation allowances, winter energy payments and disability allowance and are additional to a beneficiary’s “main benefit”.

People who are eligible for LOPE often rely on MSD support - including supplementary payments - while they are waiting to be assessed. But once their LOPE backpay comes through, MSD seeks to reimburse itself for the main benefit it provided in the meantime. If it didn’t, the person would get both LOPE backpay and MSD support for that period.

The issue is not the reimbursement of this main benefit - that’s expected and accepted. The issue is that MSD also claws back the supplementary payments.

Or, at least, it did, until the High Court ruled last October that doing so was actually illegal.

In response, the Government introduced this bill to change the law. It is retrospective, meaning it doesn’t only change the law to align with MSD’s policy going forward - it maintains any debts that people have accrued in years past.

Dunedin barrister Warren Forster read the first 200 submissions on the bill - and said not one supported it in its current form.

Labour supported the legislation through its first reading - to a very rushed select committee process.

So, you’re caught up. Now onto the submissions.

Submitters ranged from individuals impacted by the policy to lawyers with expertise in the area, advocacy groups and governmental organisations.

Forster said there were common themes in the 200 he reviewed. These included: the content of the bill, the retrospective effect and the fact it was introduced under urgency.

Submissions claim content of the bill is ‘absurd’

Minister of Social Development Louise Upston has backed her bill. The rationale is that it prevents people from double dipping and profiting off both ACC and MSD.

“What we need to ensure is that we don't have two forms of income assistance where one person is getting ACC and welfare payments when they wouldn't otherwise be entitled to it because of the level of income they're receiving. So it's a fairness issue. And what we don't want to do is see people getting two forms of assistance at the same time where they wouldn't be otherwise eligible for it, which is why we need to change that,” she said.

According to Forster, this is “absurd”.

“They clearly do not understand that the impact of the policy is the opposite,” he said.

Kate Johns, who survived a car accident in 1996, has been caught owing money to MSD after receiving a LOPE backpayment from ACC.

“When someone is receiving help from ACC, they get paid weekly compensation. But all their other injury-related needs are funded by ACC too. If a person can’t live in their house and has to rent somewhere that’s accessible, or they have to travel to treatment, see a counsellor or pay for medication, those costs tend to be paid by ACC.”

Meanwhile, people being supported by MSD rely on supplementary assistance for these costs. So making them pay it back does not even the playing field - it leaves those who receive an ACC backpayment disadvantaged, he said.

This was Kate Johns’ experience.

In 1996, Johns was involved in a car accident that left her with PTSD and a traumatic brain injury. She has not been able to support herself with a paid job since.

“I can’t rely on my cognitive capacities or vision enough to get a job,” she explained. “I can work, but I couldn’t go to a job interview and reliably say, I will definitely have enough cognitive capacity to work at 2 o’clock tomorrow afternoon.”

Kate Johns with some of the wild swans she cares for.

Instead, Johns said she has built work that she can do on her own terms - it just isn’t paid.

For years she was sole carer for her parents, who suffered from dementia, Parkinson’s disease and motor neurone disease between them. She also set up a charity to provide brain injury support services (the Hopeworks Foundation) and cares for wild birds.

“I do work. I do a lot of work. I just can’t do it in a way that gets me paid,” she said.

Like many LOPE recipients, Johns spent a long time receiving support from MSD instead of ACC. She said ACC first recognised her claim for support in 2006, ten years after her accident. Her coverage was then terminated in 2009, after ACC decided she was no longer eligible.

In 2016, Johns obtained a court order stating that she should have been receiving LOPE payments since 1996, and ACC agreed to provide back-payment.

But like Jay Wing and Naomi, who Stuff covered last week, Johns was left with just a small portion of her overall entitlement after ACC repaid MSD for the main benefit and supplementary payments she had received over the years.

LOPE payments compensate people for personal injuries sustained before they turned 18 or while they were studying.

She did not think it was not fair for MSD to take her supplementary payments, but she did not have the resources to fight.

“I didn’t get things like the accommodation supplement, I received the disability allowance, which was relevant to my medical stuff.”

In her experience receiving LOPE payments, Johns said ACC does help with some medical costs. So paying it all back to MSD left her worse off than if she had been on LOPE the whole time.

Nowadays, Johns lives on weekly LOPE payments, which are equal to 80% of minimum wage. On this income, she would likely still be eligible for supplementary MSD support if she applied.

Retrospective effect

Most of the submissions Forster reviewed - and all the ones Stuff did - took issue with the bill’s retrospective effect.

In short, the High Court’s decision should have led to the cancellation of debts that LOPE recipients owe to MSD for supplementary assistance, with no more created going forward. But with this bill, the Government is seeking to reinstate the debts, as well as generating more in future.

This is not how laws are usually made. Normally, laws should apply prospectively - that is, going forward.

When Kate Johns received her ACC backpayment, she said most of it went to repaying MSD.

According to the Legislation Design and Advisory Committee guidelines, appropriate circumstances for retrospective laws include when the change is entirely to the benefit of those affected, when it validates matters generally understood to be lawful, or when it provides certainty as a result of litigation.

Forster did not believe this bill falls under any of those categories.

“The bill now proposes to override that [High Court] judgment, validate prior unlawful decisions, and require retrospective reassessment of supplementary assistance on the legal fiction that a beneficiary was never entitled to the main benefit once ACC arrears are paid,” he wrote in his submission.

But Upston told Stuff this was an appropriate use of retrospective drafting, because the whole point of the legislation was to reduce inequities between different cohorts of people receiving both welfare and ACC payments.

“Without retrospective legislation, this policy intent would not be upheld for people who received a backdated ACC payment prior to the Bill’s introduction and would therefore not reflect the principles of a targeted welfare system, where people receive financial assistance relative to their income levels,” she said.

Is it really urgent?

Chief Ombudsman John Allen said the bill’s short turnaround was “discourteous, if not discriminatory”, towards affected New Zealanders.

According to Forster, if you remove the perspective that LOPE back-payment recipients would be double dipping, the whole policy rationale and sense of urgency fall away.

But even if that isn’t acknowledged, something this important should not be rushed, he said.

“The legislative provisions involved are ridiculously complicated. It means that if I get paid compensation going back 30 years, and I had a long-term relationship in that time where we were both on MSD support, the new law would require MSD to go back and collect any overpayment from that former partner.”

The cost of executing this would likely outweigh any repayments secured, he said. While MSD may have exercised discretion not to pursue such repayments under the former policy, the proposed law states that MSD “must” review whether the person was entitled to the supplementary assistance they received.

Stuff asked Upston to respond to this point, and she said that discretion had been considered. However, “it was determined that retaining discretion in the relevant provisions could result in uncertainty in the law, and in the discretion being exercised in ways that is not consistent with the policy intent. This law change ensures that MSD is able to continue to give effect to that policy intent.”

Upston also said that the law is not being progressed under urgency, it was only accorded to the introduction of the bill. It was that move that meant the window for submissions was only 2.5 days.

The Office of the Ombudsman echoed Forster’s concerns about the speed at which the Government is advancing this bill.

“I note that it was introduced on Tuesday 17 February; that it was only available for the public to inspect on the Parliamentary website some time on 18 February; and that submissions on the Bill close on 20 February. This short timeframe has precluded me from working through the various considerations as carefully as I would have liked,” Chief Ombudsman John Allen wrote.

“I also note that the consultation timeframe may be viewed as being discourteous, if not discriminatory, towards a number of New Zealanders who are directly affected — and detrimentally impacted — by the Bill.”

Allen went on to note his concerns that the bill had not been clearly considered in light of the right to freedom from discrimination in the Bill of Rights Act, and that it may prohibit survivors of abuse in state care from seeking recompense for money already clawed back by MSD.

Forster said the common message in many of the submissions he read was “stop, figure out what you’re trying to achieve, and — if it stacks up — put legislation in place that actually achieves that.”

A previous version of this story showed quote marks around the term 'double-dipping' which could have been read as a direct quote from the minister. This was incorrect.