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Prime Minister Christopher Luxon and Social Development Minister Louise Upston told Parliament no one's benefit was cut following a law change that swamped ministry officials with paperwork - but that is exactly what happened.
RNZ on Thursday revealed a second problem that saw people losing benefit payments following a law change that was rushed through Parliament last year.
The new law requires some beneficiaries to re-confirm their circumstances at least once every 52 weeks, to check whether they are still eligible.
They include some people receiving the Supported Living Payment, Emergency Benefit, Superannuation, Accommodation Supplement, Disability Allowance, and others.
Last week, Luxon and Upston apologised after thousands of pensioners missed out on their Winter Energy Payment this year, because that payment was incorrectly included in the legislation.
A second problem has since surfaced: processing delays caused by a high volume of people confirming their circumstances meant some of them had their benefit payments wrongly suspended.
In Parliament last week, the Prime Minster said that did not happen.
Green MP Marama Davidson asked: "Is he confident that the use of automated decision-making and mandatory reviews has not resulted in wrongful cancellation of main benefits such as jobseeker or the supported living payment due to processing delays or errors?"
Luxon replied: "Yes, and I'm very supportive of the use of those tools in order to be able to free up staff to be able to support others with more complex needs."
Upston was also questioned on the matter in the House on Tuesday this week.
Green MP Ricardo Menéndez March asked whether any main benefits were wrongfully cut through the use of the "confirming your circumstances" policies triggered by mandatory reviews.
Upston replied: "No."
Menéndez March later asked her to confirm whether the "mandatory review policy" had resulted in benefits being suspended due to processing delays.
Upston replied: "I can confirm that there were delays in processing. The reason for this is that the expectation was that more of the change in circumstances would have been completed online rather than paper based."
Menéndez March: "Did any of those delays result in the suspension of main benefits?"
Upston: "They were delays. They're not policy changes."
Menéndez March: "Did those delays in processing result in any benefits being cut?"
Upston: "Possibly."
She went on to explain she could not answer further questions because her time allocation for the debate had run out, and asked the MPs to submit written questions so she could give "full answers".
Upston told RNZ she was "very disappointed" that people's benefits had been suspended.
"It should not have happened. I appreciate the impact it will have had on those affected. I expect MSD [Ministry of Social Development] to manage its operational workloads."
She made no comment about her statements in Parliament.
Luxon has been approached for comment.
The affected beneficiaries had since been paid back, and MSD apologised.
Opposition calls on minister to 'front up'
Menéndez March, the Green Party's social development spokesperson, said the error was unacceptable.
"I think Louise Upston should front up to the public explain exactly how many people were left without their benefits, and if she is unable to do so, then she should resign for her inability to actually ensure that the policies that she is pushing forward would result in accurate assessments, people not being left without their entitlements, and without their ability to put food on the table or cover their rent.”
MSD could not say how many people were affected, or for how long, because the information was held in individual client files so it did not have a total picture.
Menéndez March said the problem proved a shortfall of what is known as automated decision making (ADM): using artificial intelligence (but not generative AI) or automated systems to make decisions or carry out tasks.
MSD has recently expanded the use of ADM - following a law passed under urgency - to do things such as sending beneficiaries notifications that they need to confirm their circumstances.
"What we have is an algorithmic decision-making system that spams beneficiaries without guaranteeing that there will be enough humans to process that documentation without benefits being suspended," Menéndez March said.
"This is just the complete failure of a system ... that was rushed consistently under urgency and without the minister adequately allowing this automated decision-making system to be put under adequate scrutiny, resulting in people's livelihoods being on the line."
Labour's social development spokesperson Willow-Jean Prime said it was the last thing beneficiaries needed.
"To botch things up this bad for struggling Kiwis is outrageous," she said.
"It's time Louise Upston front up and take accountability for her rushed law-making and job cuts that created this mess."
