The Government has passed legislation allowing the Ministry of Social Development (MSD) to expand its use of automated decision-making in the welfare system, a move it says will improve efficiency and reduce administrative delays.
The Social Security (Modernisation) Amendment Bill passed its third reading in Parliament on Tuesday, enabling broader use of automated electronic systems for routine welfare decisions. The change was announced as part of Budget 2025 and does not alter eligibility criteria for welfare assistance.
Social Development and Employment Minister Louise Upston said the legislation was designed to modernise a welfare system that processes millions of decisions each year.
“Many of these decisions are straightforward, but the legislation has not kept up with how services are delivered today,” Upston said.
“While MSD currently uses automated processes where they can, there is still unnecessary manual processing, duplication, and delays for clients.”
According to Upston, the bill will allow automated systems to handle simple, rules-based decisions while maintaining human oversight for more complex cases requiring discretion.
“This is about delegating straightforward decision-making to an automated process, freeing up time for case managers to engage better with clients so they can access assistance and move from welfare to work,” she said.
The legislation also introduces safeguards requiring MSD to manage bias, maintain transparency and ensure appropriate human oversight of automated decisions. Upston said New Zealanders could have confidence that decisions would remain fair, accountable and open to challenge.
The Government argues the changes will improve consistency, reduce errors and help prevent welfare recipients from accumulating unnecessary debt.
The proposal was introduced by Coromandel MP Scott Simpson, who said MSD staff were spending too much time on administration instead of supporting clients.
“MSD makes millions of decisions every year,” Simpson said. “That’s not good enough for the clients of MSD, or taxpayers. This Bill fixes that.”
Speaking to RNZ during the bill’s progression through Parliament, Simpson said automated systems would be used “sensibly” and only for simple, rules-based decisions.
“Human judgement will remain where it is needed,” he said. “That means faster decisions, more consistency, and a system people can trust.”
MSD has stressed that the legislation does not involve the use of generative artificial intelligence such as ChatGPT, despite some public concern about AI involvement in welfare decisions.
However, the legislation has attracted criticism from the Coromandel Green Party candidate who argues it could reduce transparency and human oversight in decisions affecting vulnerable New Zealanders.
Pamela Grealey said she was concerned both about the expanded use of automated systems and the Government’s decision to progress the bill under urgency, bypassing the usual select committee process.
“Scott Simpson is our local representative in Parliament. That means Coromandel people have a right to know when legislation is being advanced that could have significant consequences for families already struggling to make ends meet,” Grealey said.
She said many residents in the Coromandel rely on seasonal, casual or low-paid work alongside supplementary support from MSD, creating circumstances that are often more complex than a simple set of rules can capture.
“Through my advocacy work with the Coromandel Workers Council, I’ve seen firsthand how many local families rely on MSD support to bridge the gaps created by insecure work,” she said.
“These are not simple situations that can always be reduced to a set of rules. People’s lives are complicated, particularly in rural communities where transport options are limited and employment can be unpredictable.”
Grealey said she was particularly concerned that the legislation was advanced under urgency, limiting opportunities for public consultation and scrutiny.
“When changes affect some of the most vulnerable members of our community, people deserve the opportunity to be heard,” she said.
“While the Government argues the changes will improve efficiency, efficiency should never come at the expense of fairness and human judgement.”
She argued that technology could play a supporting role in public services but that decisions affecting people’s income, housing security and ability to feed their families should retain meaningful human oversight.
“Our community deserves a welfare system that understands people, not just processes,” Grealey said.
The Government maintains that the reforms strike the right balance between efficiency and accountability, while critics say the long-term impacts on welfare recipients will depend on how the new powers are implemented in practice.
Mr Simpson’s office has been approached for a response.
