Social Security Act 2018

Enforcement: sanctions and offences - Sanctions for breach of obligations other than young person or young parent obligations - Hierarchy of sanctions

236A: Sanction for first failure: money management

You could also call this:

"What happens if you don't follow the rules: a special way to manage your benefit money"

If you have a first failure, you might get a sanction called money management. This happens if you are getting a benefit and you have a first failure, and you are either getting help from MSD or you have children who depend on you. MSD must think it is a good idea to impose money management on you.

If you get money management, MSD will help you manage your money. You will need to talk to MSD about your failure to comply within five working days of getting a notice. MSD will not reduce your main benefit by half or impose another non-financial sanction.

While money management is in place, some of your benefit will be paid in a special way. The rest of your benefit will be paid normally. Any debt you owe will be recovered according to the rules.

If you do not comply again within a certain time, your main benefit might be reduced to zero. This will happen until you comply again or your benefit is cancelled. Money management will last for a certain period, even if you comply again during that time. You can find more information about this in section 261A and section 418(1)(ib).

Money management is also subject to other rules, such as sections 243AAA, 243, 245 to 248, and 320 to 322.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1444297.


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236: Sanction for first failure: reduction of rate of main benefit, or

"What happens if you don't meet benefit requirements: your main benefit might be reduced."


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236B: Sanction for first failure: community work experience: general, or

"What happens if you don't meet your responsibilities for the first time: doing community work"

Part 5Enforcement: sanctions and offences
Sanctions for breach of obligations other than young person or young parent obligations: Hierarchy of sanctions

236ASanction for first failure: money management

  1. This section applies to a person (P) if—

  2. P has a first failure; and
    1. either—
      1. P is subject to active case management by MSD; or
        1. P has 1 or more dependent children; and
        2. MSD is satisfied—
          1. that it is appropriate in the circumstances to impose money management on P; and
            1. that it is more appropriate to impose that sanction than any other sanction that can be imposed for P’s first failure.
            2. If this section applies to P, MSD must, for the first failure of P, impose money management—

            3. under section 232(2)(a) and this section; and
              1. only if, in the 5 working days from the giving of the section 252 notice, P discusses with MSD, in an appointment with MSD, P’s failure to comply.
                1. If money management is imposed on P, MSD must not, for the first failure of P,—

                2. reduce the rate of P’s main benefit by half under section 236(2); or
                  1. impose a non-financial sanction other than money management.
                    1. While money management that is imposed on P has effect,—

                    2. the prescribed proportion of an instalment of P’s main benefit that is an instalment payable to P (see regulations made under section 418(1)(ia)) is paid by the required manner of payment for money management (see regulations made under section 418(1)(jb)):
                      1. the rest of the instalment is paid under section 339:
                        1. specified arrears are credited or paid, and specified debt is recovered, under regulations made under section 418(1)(jb).
                          1. If P fails to recomply (see section 261A) within the prescribed period starting when the sanction takes effect under subsection (6)(a) (see regulations made under section 418(1)(ib)), MSD must reduce the rate of P’s main benefit to zero until the earlier of the following events:

                          2. P recomplies (see section 261A):
                            1. MSD cancels P’s main benefit under section 233A.
                              1. Money management that is imposed on P has effect for the following duration:

                              2. from the date stated in the notice of non-financial sanction under section 252A(2)(c); and
                                1. until the end of the prescribed period from that date (see regulations made under section 418(1)(ib)), even if P recomplies (that is, both of the things specified in section 261A(2)(a) and (b) have occurred) within the prescribed period.
                                  1. Subsection (6)(b) applies even if P’s main benefit is suspended for reasons unrelated to a sanction for failure to comply with 1 or more obligations under this Act that are specified in section 233.

                                  2. This section is subject to sections 243AAA, 243, 245 to 248, and 320 to 322.

                                  Notes
                                  • Section 236A: inserted, on , by section 17 of the Social Security Amendment Act 2025 (2025 No 25).