An Office of the Privacy Commissioner inquiry has found that the Ministry of Social Development (MSD) systematically misused its investigatory powers while pursuing benefit fraud, unjustifiably intruding on the privacy of many beneficiaries.

The inquiry found MSD’s exercise of its information gathering powers to be inconsistent with legal requirements under the Social Security Act 1964 [repealed on 26 November 2018] and the Privacy Act 1993. This failure has resulted in infringements of individual privacy, particularly in relation to the collection of information from third parties.

During its inquiry, the Office interviewed beneficiaries and reviewed fraud investigation files provided by MSD.

Privacy Commissioner John Edwards says the inquiry reviewed MSD files that contained text messages between parties in a relationship, sometimes of a sexual, familial or otherwise intimate nature.

“In one instance, a beneficiary described to us how MSD obtained, from a telecommunications company, an intimate picture shared by that individual with a sexual partner. The photograph was then produced at an interview by MSD investigators seeking an explanation for it,” he says.

MSD had powers under section 11 of the Social Security Act 1964 (as regulated by a Code of Conduct) to collect “any information” about a person on a benefit in order to assess their entitlements – including retrospectively, as in the case with fraud investigations.

As well as the Privacy Act, MSD’s Code of Conduct required MSD to first seek information from a beneficiary client directly before seeking it from a third party, unless to so would prejudice the maintenance of the law.

Section 11 of the Social Security Act 1964 is now set out in Schedule 6 of the Social Security Act 2018.