Persistence of debt to government

The persistence of debt to government
01 Nov 2022


The persistence of debt of government examines the existing range to debt types people owe to government, the types of debt and the length of time the people have had debt to government. 

This report is part of the Social Wellbeing Agency’s reports into debt to government. For further information see Public and private debt, Te Atatā- Insights Brief on children and debt to government and the earlier reports on debt to government.

Key Results

  • More than 85 percent of people who owe debt to government have owed debt for at least one year. More than 45 percent have owed debt for at least four years.
  • More than two-fifths (40 percent) of people with debt to MSD, fines debt to MoJ, or child support debt to IR had at least one debt that had lasted for more than four years.
  • There are significant differences in how debt types are managed. The WFF and income tax debt types have a significant decrease in persistence after two years that the other debt types
    do not have.
  • For people who owe more than one type of debt, close to half of their debt is owed to IR, but only 20 percent of repayments are made to IR. This means that the division of their repayments across debt types may not match the mixture of debt that they owe.
  • Repayments are not keeping up with the creation of new debt. In 2020, repayments were about three-quarters of new debt created.
  • Debt persistence disproportionally affects people with low income, people receiving main benefits, and people who owe debt to more than one government agency.
  • New Zealand residents show different patterns from those non-residents who owe debt to government.

Results from this analysis are not intended to aid debt recovery, but to fill gaps in understanding
about the causes and characteristics of persistent debt and debtors.

Page last modified: 05 Jul 2023