Tauranga woman Treacy Thompson took the Department of Social Welfare to court in 2013 over the computer problems only now being acknowledged by the government.

Stuff reported this week that a review of Ministry of Social Development processes brought up four other cases that Minister Anne Tolley says could have implications on repayments.

Treacy Thompson and some of the paperwork from her struggle with the government over benefit payments. Photo: Supplied

There were about 35 instances where processes, laws or practices needed to be changed. Some had simple fixes, says Anne, but others are more complex.

But Treacy says the issue is systemic and could involve billions of dollars in repayments.

She lost the 2013 court case where she took the ministry to court, a loss she says means the government didn't have to acknowledge a programing issue that has been underpaying beneficiaries for years.

'This is billions of dollars; tertiary students, superannuitants, low income families, everyone.” says Treacy. 'Billions and billions of dollars.

'The computer programme's wrong it's not accessing the full amount that a person's meant to get.”

Accommodation supplements are a particular area where people are receiving less than they are entitled to, says Treacy.

Not only does the computer system illegally deduct, Work and Income has devised a way of operating that she says is not the way the system is supposed to work.

'That gives them a bit more, but they are still short $50 a week, depending,” says Treacy.

'If they worked it the way it is which is 25 per cent of a personal basic benefit, they would get way less than they were supposed to get. Then when they work it their way which is at the cut off of $97 per week for access to accommodation supplement.”

As an example a woman with two young children is paying $320 a week rent. In Tauranga she should have received $165, but she was only getting $157.

'She was actually in need of $50 a week. So that's fine, a lot of people have got that issue.

Now that ($50) is supposed to come through Temporary Additional Support – which is another programme staff are meant to apply, but as soon as they put a person's accommodation costs into that computer programme, it deducts $25.49 plus five per cent of the basic benefit, plus tax – so that means it is costing the client $50 to access Temporary Additional Support, so therefore they are declined.

'How does that work? Everyone is supposed to have 70 per cent of their benefit or income available to them every week for a standard cost but no one is, because they are paying the shortfall in accommodation costs out of their living costs.”

The problem originates from seven years ago when the Labour Government pushed through new regulations regarding Working For Families and Temporary Additional Support (TAS) under urgency therefore stopping submissions being made, says Treacy.

The new regulation for Temporary Additional Support states that all people whether on a benefit or wage must pay the first $20.50 of their accommodation costs before applying for TAS.

'That in itself is not an issue until you apply for TAS and the computer programme that has been set up to calculate whether or not you are entitled, deducts the said amount from your benefit therefore leaving you to find the money elsewhere.”

For some families this can be up to $80 a week coming out of a family's living costs that should be paid through Temporary Additional Support and accommodation supplements, says Treacy.

'The reason the government is not doing anything about it, is I took them to the High Court when it happened to me,” says Treacy. 'I was having a deduction taken off me, but I didn't need accommodation costs.

'So why am I having a deduction when I am not requiring accommodation?”

Treacy says she lost the court case because the judge used a dummy document presented as an exhibit to find she didn't need any of the entitlements she claimed.

'That was an assessment done seven months after I applied for review – and he used that to make a ruling.

'He made out that I went into work and income and requested these things. I now appear to be trying to defraud work and income on items I am blatantly not entitled to. Why would I do that? And then take it to court?”