Women reimbursed by Department of Social Development now hit with unfair taxes – advocates

“WINZ (Work and Income NZ) told me there was nothing left to pay, it didn’t count as income,” said one woman, who is now working and no longer on benefits.

This pushed her into a higher tax bracket and left her owing nearly $4,000 to the taxman.

“It’s a huge amount of money, especially when you also have small children. I also lost money on my family tax, obviously moving into a higher tax bracket.

“It’s extremely stressful because it’s a lot of money when you’re just working class people.”

Another woman lost her much-needed family tax credits. Also, because the repayment was mistakenly treated as income, a large sum was taken to pay off her student loan.

“They charged me all the interest from the time of payment until today… In total it was around $10,500.

“It was horrible. In fact, I think it was a lot worse to get that payment than when the money was taxed back then. Because I ended up with a huge debt.”

Beneficiary advocates have strongly criticized the taxation and argue that the penalties were wrongfully imposed.

They say that if the payments had been made in the years they were actually due, the current problems would not occur.

A legal opinion requested by Auckland Action Against Poverty agrees, saying the refund should be exempt from tax consequences.

Inland Revenue disagrees, but it does not have a binding ruling on the matter.

There is another process to apply for tax exemption, but the women at the heart of the problem say they don’t have the courage to go through it either.

They say they feel the fight for justice isn’t worth it, as they end up with a huge bill.

“First you were punished for things that were out of your control, and then you get punished again all these years later. It’s like they tried to right their wrong, but they didn’t. not really done, and you’re still being punished.”

Auckland Action Against Poverty has written to the Inland Revenue and Social Development ministers, calling for urgent change to the law over what they say is prolonged injustice.

AAAP coordinator Brooke Stanley Pao said Checkpoint women were unfairly taxed when they were told they wouldn’t be.

It caused them more stress and hardship, she said.

“Taking money away from their benefits was already cruel and unfair, but also doubling them by giving them their arrears only keeps people in distress – it’s arrears.

“These backlogs, people were really looking forward to because it means they have a bit more freedom to do whatever they want with their lives, and women are finding that’s actually more difficult, and some of between them even wish they hadn’t even sort of gone through the process of getting it in the first place.

Brooke Stanley Pao said that with a majority in Parliament, government has the power to be transformational.

“Do what it takes. You have the power to do the right thing. So why don’t you?

In a statement to CheckpointRevenue Minister David Parker said: “I recognize that these payments are made to people who may be in difficult circumstances and the hardship that may cause. I have asked my officials to develop a solution to this, and they are working on it. .”

RNZ

Joel C. Hicks