Fraudsters used dead relatives to claim benefits

Last updated 07:37 04/12/2010

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Fraudsters have stolen $1.6 million by claiming the pensions of dead family members.

The frauds by widows, children and grandchildren were on average $105,000 each and some of the frauds were going for 15 years before they were uncovered, The New Zealand Herald reported today.

The illegal claims were made by forging signatures on superannuation forms to show relative were alive.

The fraud was discovered last year after the Ministry of Social Development started investigations into 250,000 deaths since 1984. Since it began the investigation 15 people had pleaded guilty to criminal charges.

The fraud was not detected for five years after the ministry began matching data with data in the Department of Internal Affairs, which manages death records, to ensure "dead" people were not claiming benefits.

The ministry said claiming false pension payments was impossible since data-matching was introduced in 2004 but earlier deaths were not able to be checked.

The technology and skills to "data-mine" records did not exist until 2007 when the ministry created an intelligence unit.

The head of the ministry's fraud team, Hilary Reynolds, said the unit last year identified a fraud risk with pensioners who died before 2004. Of the 250,000 beneficiary deaths investigated, 33 were set aside for more scrutiny and 16 people were charged.

Ms Reynolds said family members took advantage of the death of a relative.

Some were superannuitants, such as widows claiming their husband's pension, and the rest were children or grandchildren.

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- NZPA

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