A former Palmerston North Work and Income employee - who lost that job because of an elaborate fraud - has been sent to prison for ripping off the taxpayer again while on home detention for her original offending.

Former Winz case manager Letitia Lilly Anne Proctor, 25, has been jailed for eight months for receiving benefit over-payments of $10,476 between December 2010 and October last year.

Her latest offending began while she was serving a seven-month home detention sentence for fraudulently obtaining $27,528 in benefits between August 2008 and May 2010.

While working for the Social Development Ministry Proctor created false identities and accessed client information for financial gain - money that she funnelled toward clearing her substantial debts.

In the Palmerston North District Court yesterday, defence lawyer Steve Winter asked for home detention to again be imposed, but Judge Gerard Lynch didn't think that was punishment enough.

"In my assessment it would be patently wrong to allow her leave to apply for home detention," the judge said.

This time Proctor admitted two charges of obtaining by deception, two of dishonestly using a document and one of using a forged document.

A ministry summary says Proctor and her husband applied for an unemployment benefit and student hardship benefit in December 2010.

That month and in January 2011, Proctor's husband did some temporary work. She advised Winz of this, but understated how much money he was earning.

Then in February last year Proctor said she had separated from her husband.

As she was caring for her husband's brother, who was 17 at the time, Proctor applied for a domestic purposes benefit, accommodation supplement and temporary additional support. She said she was paying $220 a week rent.

"Inquiries have now established that during this period, the defendant's partner continued to pay the rent and some of the household outgoings and continues to reside off and on at the property," the summary says.

Then Proctor became more daring, giving Work and Income a letter purportedly from the 17-year-old's mother, saying Proctor had care of the boy.

She also handed over a letter signed by her husband saying he had left the house and confirming the child was in Proctor's care.

This enabled her to receive the more generous sole-parent rate of benefit. But she had written both letters herself.

By July last year, Proctor had started working again - earning $8000 for nine weeks at recruitment company TalentPoint. She did not tell Winz and, early in August, applied for some temporary additional support.

A month later Proctor completed a form saying she had worked for the company for only one week.

Mr Winter said he wondered why his client - "an intelligent young woman" - would offend again when she would inevitably be caught.

In the publicity that surrounded her last spate of dishonesty, Proctor's marriage came under pressure and she lost her income.

"She found herself in that period under immense pressure," Mr Winter said. "One must wonder how well she was."

As for her work at TalentPoint: "Her explanation is she thought she could go into the department and say, ‘This job went longer than I thought, I owe you money'."

He acknowledged Proctor's offending was serious, but said home detention would allow her to keep her present employment at Toops wholesalers. Judge Lynch disagreed.

"Sentencing needs to clearly denounce fraud and deter those that might be minded to offend in the same way."

- © Fairfax NZ News