New law will give MSD greater power to use approved doctors for benefit checks
Wednesday, 3 June 2026
A welfare bill gives the Ministry of Social Development (MSD) far greater power to send more beneficiaries to a pool of 65 government-selected health practitioners for medical examinations if their eligibility for a benefit is questioned.
Under the law, MSD can direct beneficiaries to attend a medical examination at any time. Currently, some benefits require medical assessments only as part of the initial application process.
ACT is celebrating the changes, as it is part of its coalition agreement to develop an approved pool of doctors who can issue these medical certificates, aimed at lowering the number of people on the supported living payment.
Its social development spokesperson, Dr Parmjeet Parmar, said the new law was about fairness and was there to “weed out those who are taking advantage of the system”.
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The changes are part of a law that was passed through the House under Budget urgency on Friday night to allow MSD to use automation to make decisions on benefits, including whether to continue or suspend benefits.
The Social Security (Modernisation) Amendment Bill allows MSD to “approve the use of an automated electronic system by a specified person to make any decision, exercise any power, comply with any obligation, or take any other related action under any specified provision, with appropriate safeguards“.
Social Development Minister Louise Upston has given an assurance that automated decision-making would be used only for simple decisions. A narrower form of such decision-making had been in place since 2022.
Savings of $55 million are expected over the next four years as a result of finding more people ineligible for benefits.
The bill gives MSD greater power to have beneficiaries undergo medical examinations at any time where eligibility or work capacity is unclear or when a second opinion has been recommended in the doctor’s evidence.
The doctor must be agreed between the person and MSD, or if they cannot agree, nominated by MSD from a pool of 65 practitioners the department has selected.
The designated health practitioners are vocationally registered medical practitioners, nurse practitioners or psychologists, who have a minimum of five years experience in New Zealand.
They undergo specific training to work with MSD clients and the medical assessment process.
Parmar said while GPs were advocates for their patients, using designated health practitioners “protects the integrity of the system for everyone”.
“Assessing eligibility for long-term financial support requires an objective, standardised approach.”
Upston said the pool of practitioners was only there if clients and MSD could not agree.
“We want to make sure people are receiving the right benefit and that, equally, they are getting the right support.”
The bill also strengthens medical evidence required in order to access medical benefits, such as introducing coverage ‒ the period for which the person is expected to have the disability, or health condition so the benefit gets a medical review date.
Labour’s disability spokesperson, Priyanca Radhakrishnan, said the bill drew comparisons to Australia’s Robodebt.
Robodebt was an automated government scheme implemented in Australia that incorrectly demanded welfare recipients pay back benefits due an incorrect algorithm. A royal commission launched an inquiry after it was ruled illegal by the court in 2019.
Upston said “it is absolutely not Robodebt”.
“There is nothing [in the bill] that changes the principles of the welfare state. There is nothing that changes entitlement under the welfare system.”
Green MP Ricardo Menéndez March said the changes would likely cause additional hurdles for disabled people to overcome, with “huge” challenges already seen with applications and doctor’s opinions able to be challenged by the ministry.
“The fact that these changes have been brought forward under urgency, with no public input from disabled people and medical professionals, also undermines the principles of good policy making.”
Privacy commissioner’s warnings
Privacy Commissioner Michael Webster was consulted on the bill and raised concerns about automation resulting in inaccurate information being used, leading to people having their benefit suspended when it should not be.
Melissa Gill, MSD deputy chief executive of organisational assurance and communication, said the new law did not involve generative AI such as Copilot.
However, Webster argued the bill provided a general authorising framework which enabled future higher risk uses of automation, such as predictive models powered by generative AI.
“Strong governance and safeguards will be necessary to ensure that current and future uses of ADM (automated decision-making) do not result in inappropriate adverse action and the accompanying reduction in trust and confidence in the benefit system that would result.”
He called for safeguards, proper consultation with relevant agencies, specifications on what automated decision-making standards must cover in the bill and modernising the Privacy Act with stronger protections for potential impacts.
“The bill should also have explicitly stated what automated decision-making can and cannot be used for, rather than providing a broad general authorising provision enabling MSD to approve the use of an automated electronic system by a specified person.”
The bill has been criticised by the Opposition for being passed under urgency with no select committee process.