Cost of living payment: Prime Minister Jacinda Ardern admits some people overseas will receive it

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By RNZ

Prime Minister Jacinda Ardern says the cost of trying to recover the $350 cost of living payment from New Zealanders living overseas would outstrip the benefits.

The Government is backing the way the payment is being rolled out despite knowing that some ineligible people will receive it.

The first instalment – of $116 – will be paid today to New Zealand tax residents over the age of 18 who earned up to $70,000 in the last financial year and are not entitled to the winter energy payment.

An unknown number of New Zealanders living overseas have received letters from Inland Revenue (IRD) saying they qualify for the cost of living bonus, even though they are not New Zealand tax residents.

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Ardern said the vast majority of those who would receive the payment were New Zealand taxpayers who were based in New Zealand.

“But we have also moved quickly and so there will be some who are captured by the system, who aren’t part of the criteria that’s been designed but who may well receive it.”

The payment would be distributed by IRD using an automated system so it was not always possible to work out if people were living in New Zealand and the cost of doing so would outweigh any benefits, she said.

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The alternative to having these individuals receive the payment would have been an application based process which would have taken too long and it may not have reached those who were most vulnerable, Ardern said.

“The alternative in creating a perfect system would be in creating a less timely payment and potentially those who need it most not being reached.”

The payment was one of the measures the government was using to help New Zealanders deal with the cost of living increases in the aftermath of the Covid economic recovery, she said.

“Yes, we’ve moved quickly, but so has the economic situation.”

The payment was still more limited and more targeted than a broad based tax cut, Ardern said.

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