Photo: IGOR STEVANOVIC / SCIENCE PHOTO
Some budgeting services facing closure after missing out on government funding are using their own reserves to pay for clients still being referred to them by state agencies for free sessions.
The Ministry of Social Development is no longer funding 44 of the 132 budgeting services it supported last financial year, due to a change in the funding model.
RNZ has heard from four services previously funded to offer free financial mentoring to people in hardship, which questioned why they were still receiving clients from the department that cut their funding.
Whangārei Care Centre had missed out on continued funding of about $300,000 a year from the Ministry of Social Development.
Its chair Angela McGregor said it had continued receiving referrals from government departments, including a referral from MSD as recently as last week, and had received four other clients from MSD since its funding was cut.
She said MSD had funded only one budgeting service in Whangārei and that place had a month-long wait list.
"We assume that is why people are coming to us.
"On one hand we feel it's grossly unfair, on the other hand we feel the decision probably wasn't made locally and therefore the local people who know us and trust us are still endeavouring to use us."
McGregor said Whangārei Care Centre would run on reserves and try to secure funding elsewhere but ethically would not turn people away.
"Nothing has changed except for the funding security MSD provided. We will not turn anyone away until the day arrives that we can no longer fully function.
"It's devastating that we lost all that funding because it's a huge amount of money at a time when the cost of living is going through the roof."
Whangārei Budgeting Service received the government contract. Its co-ordinator Anna McIntosh confirmed wait times had been between two to four weeks since April due to an increased need for its services.
"The reduced funding from MSD into the sector has not impacted our service waiting times, as we were already booked to capacity," she said.
Dunedin Budgeting Service had an alert on its website saying it could not take any new clients because MSD had cut its funding.
In Auckland, three budgeting services said they were still receiving MSD referrals despite having their funding cut.
North Harbour Budgeting Service chair Rob Collins said on one particularly busy day last week, the centre received 17 new clients - nine of whom were referred from government departments, including three from MSD.
"I really think it's hypocritical for a government department to say 'we'll get a budgeting service to prepare this budgeting worksheet for you' when they won't fund us," Collins said.
"We've tried to refer them on to the funded services but they keep coming back saying 'no, they've got a waiting list, can you help me'."
He said all services had a wait list, but North Harbour Budgeting Service aimed to prioritise clients needing budgeting worksheets for more immediate approvals for Work and Income and emergency housing.
"It's not ethical for us just to sit on it and say 'we've got a two week waiting list, we'll put you at the bottom'. We do try and see if we can deliver it in a reasonable timeframe."
Papakura Budgeting Services and Auckland Central Budgeting were also still receiving client referrals from MSD.
Auckland Central Budgeting's general manager Teresa White said since the centre's MSD funding stopped in July, it had received 145 new clients. Of those, just over seven percent were referred by Work and Income, while just over six percent were referred by Kāinga Ora.
In a statement, MSD's general manager for safe strong communities and families, Mark Henderson, said its staff should not be referring clients to services that were no longer funded.
"We have let our staff know which organisations are funded by MSD and asked they prioritise these services with clients. We will be including a reminder in our next communication with staff."
Henderson said the 88 budgeting services MSD was funding around the country were chosen based on demographic and geographic need.
"Services funded by MSD have always been one part of the budgeting services available to MSD clients," he said.
"We also know that some [budgeting service] providers that are no longer receiving MSD funding are choosing to continue to deliver services anyway, so may still be welcoming of clients."
Henderson said each quarter, MSD surveyed its budgeting providers to get an understanding of how long people were waiting before hearing from a financial mentor.
He said these wait times had not changed significantly since the June quarter, before funding to 44 services stopped.
As for other government agencies referring clients to services no longer funded, Henderson said MSD had provided an updated list of funded providers on a directory used by other government agencies and NGOs when looking for services to refer people to.
In August, a group of 12 budgeting services from across the sector wrote to the Auditor-General requesting an urgent inquiry into MSD's tender process.
