Purpose: To identify individuals who have wrongly received Working for Families Tax Credits (WfFTC) from both MSD and IR.
Year commenced: 1995
Features: Data transferred up to 26 times per year by USB stick.
IR disclosure to MSD: IR provides MSD with the full name, date of birth, address and IRD number of people (and their spouse, if applicable) who are receiving WfFTC payments.
MSD disclosure to IR: For the matched records, MSD supplies the IRD number, the date that tax credits payments started and amount paid.
2011/12 activity: Inland Revenue estimate annual savings of $4.2 million from operating this programme. This represents the maximum potential savings possible if double payments identified continued to be paid until the end of the year.
The actual number and value of payments stopped during the year was 1,089 and $309,488 respectively.
Commentary: An audit on the operation of this programme found that there are effective controls in place but it noted that work to refresh the information matching agreement has been delayed. That work commenced in December 2008 but has yet to be completed. Inland Revenue management have committed to liaise with MSD to complete the project.
Compliance: Compliant but see comment.
|Information matching provision||Tax Administration Act 1994, s.84|
|Programme type||Confirming eligibility|
Detecting illegal behaviour
|Unique identifiers||Tax File Number|
Each fortnight, Inland Revenue uses an encrypted USB stick to send details of current Working for Families Tax Credits (WfFTC) recipients to MSD. The details includes the full name, date of birth, address, and tax file number of the qualifying person and spouse. MSD compares these details with its own WfFTC payment details.
Where an individual is found in both files and that individual has received two or more WfFTC payments during the same period, MSD sends details about that individual back to IR to have the Tax Credits from IR cancelled and, if appropriate, to establish a debt for the amounts overpaid.
Since the 2005/06 year, Inland Revenue has reported on the operation of this programme using the process audit approach developed by this Office. In each year since then, IR's audit team has reported that there were effective controls over the administration of this programme.
In April 2011 we completed a formal review of this programme under s.106 of the Privacy Act. While we had reservations about the way IR calculates the estimated savings for this programme, we concluded that the authority to operate, conferred by section 84 of The Tax Administration Act 1994, should be continued.