1 Feb 2009, 09:00

A woman submitted a hardship application to the Ministry of Social Development in relation to a debt she owed to the Ministry. She had to provide evidence of her income on the application form. She provided some information that the Ministry suspected was false.

Eleven days later, the Ministry issued a notice under section 11 of the Social Security Act to her bank requesting all financial information about her. The woman complained to us that the Ministry had improperly issued the notice.

The Code of Conduct

Under section 11 of the Social Security Act, the Ministry can require an agency to produce information or documents for a number of specified purposes, including determining the rate of benefit for an individual.

The Ministry issued its Code of Conduct for Obtaining Information under Section 11 of the Social Security Act in 2005, in consultation with the Privacy Commissioner. The Code of Conduct governs the way the Ministry can exercise its power under section 11 of the Social Security Act. It specifies that the Privacy Commissioner can deal with complaints about breaches of the Code of Conduct in the same way that she can deal with breaches of the Privacy Act.

Clause 3 of the Code of Conduct requires that the Ministry must give the individual concerned the chance to provide the information before seeking it from elsewhere. The steps laid down in clause 3 are intended to provide individuals with some measure of privacy protection, as well as ensuring that the individual is kept informed of the nature of the enquiries being made about them.

While it is necessary for certain government agencies to have the power to compel third parties to provide information, it is equally important that those agencies maintain customer confidence and trust. The Code of Conduct seeks to balance the power of the Ministry to collect information against the individual's rights of privacy and natural justice.

The circumstances of this case

The Ministry's hardship application form contained a generic statement that 'proof of income' was required. We formed the opinion that this generic statement was not enough to satisfy the requirements of clause 3 of the Code of Conduct. We noted, in particular, that the request to the woman's bank asked for much more detailed information than that required by the hardship application form.

The Ministry said that it attempted to contact the woman and left a message on her answer machine. One day later, having received no response, the Ministry issued the section 11 notice. However, clause 3 of the Code of Conduct requires that the Ministry must give an individual a 'reasonable time' following a preliminary request to provide the information. We were not satisfied that one day was a 'reasonable time' in these circumstances.

We therefore formed the opinion that the Ministry breached clause 3 of the Code of Conduct.

We were not satisfied that this breach had caused the woman harm so as to be an 'interference with her privacy' under section 66 of the Privacy Act. However, as a result of our investigation, the Ministry apologised to her, reviewed its procedures, and made amendments to its correspondence to ensure that it conformed to the requirements of the Code of Conduct. We considered these improvements were a positive outcome and closed our file.

March 2009

Collection of personal information - Ministry of Social Development - individual not asked for information before Ministry approached third party - Ministry amended procedures and gave apology -Privacy Act 1993; Social Security Act 1964, section 11; Code of Conduct for Obtaining Information under Section 11 of the Social Security Act, clause 3