money management
young people receiving a payment from MSD are usually required to be on money management
The remaining balance of the young person's payment will be paid as an in-hand allowance of up to $50, and anything remaining is loaded onto their payment card.
who does it apply to?
Young people who receive Youth Payment (YP), Young Parent Payment (YPP), or are a young partner of a main benefit client, are generally required to be on Money Management.
Young people subject to Money Management:
- have payments redirected to cover essential living costs such as rent, power, and lawful debts
- receive an in-hand allowance of up to $50 directly into their bank account
- have any remaining funds placed onto a payment card for spending with selected suppliers for items like food, groceries and school supplies.
Note: Disability Allowance, Child Disability Allowance, Unsupported Child’s Benefit, Orphan’s Benefit, Flexible Childcare Assistance, and Training Incentive Allowance are not subject to Money Management and are paid directly into the young person's bank account.
Once young people they have completed a budgeting course and their youth coach is satisfied that they are financially competent they will be allowed to come off Money Management. This means that they will have their full payment paid directly to their bank account.
Young people can also opt out of Money Management if they have turned 18 (YP/young partner) or 20 (YPP/young parent partner) and have chosen to remain in Youth Service to complete their course of study, training, or work-based learning.
When a young person is no longer subject to Money Management or has exited the Youth Service, they can continue to use their payment card at approved Youth Service suppliers, or they can request to have all remaining funds transferred to the their bank account.
redirection of payment
For young people subject to Money Management, their payments (for YPP/young partners: family tax credit, best start tax credit) and any ongoing Extra help (including incentive payments) must be redirected to pay for the young person’s:
- accommodation and service costs, for example, rent, board, power, and phone
- lawful debts or other liabilities, for example, Child Support payments and MSD debts.
Note: Disability Allowance, Child Disability Allowance, Unsupported Child’s Benefit, Orphan’s Benefit, and Training Incentive Allowance are paid directly to the young person.
What is required for each redirection of benefit?
Young people need to provide:
- a Redirection of benefit payment application form
- bank account evidence for the person or organisation to receive the redirection.
If the person or organisation being set up to receive payments is not on our system, they must complete the Retailer/Supplier/Payee details form. YSSU will notify you if they cannot locate them on our system.
All evidence relating to the redirection should be scanned and recorded in ART
- Task category: Reviews
- Task type: Redirection
in-hand allowance
When a young person is receiving a benefit payment with Money Management, they can receive up to $50 a week in their bank account as an in-hand allowance.
After the young person's accommodation, service costs, and lawful debts are paid through redirection, any remaining balance is divided between the young person's payment card and their in-hand allowance.
The maximum amount that can be directly paid to a young person as an in-hand allowance is $50.00. The young person may request less than $50 to be part of their in-hand allowance.
Distribution of payment after redirections
Generally, when there is more available after the $50 for the in-hand allowance, the remainder is placed on the young person's payment card.
Youth coaches are responsible for making recommendations to YSSU on how payments should be allocated between the payment card and the in-hand allowance.
Example
A young person who is renting has $85 remaining after their accommodation and service costs, and debts repayments. A maximum of $50 can be paid directly to the young person.
However, the youth coach wants to ensure that the young person has enough money to buy food for themselves. The young person lives within walking distance of the school they are attending and does not incur transportation costs.
During budgeting sessions, the youth coach discusses the young person's spending habits, and the young person informs them that they go to the market to purchase fruit and vegetables. The youth coach decides to recommend that the young person receives a $25 in-hand allowance and will check with the young person that they are still going to the market and have enough food with $60 on their payment card.
YSSU agrees with the recommendation. the young person receives a $25 in-hand allowance and while $60 on their payment card.
payment card
Young people can use their payment card to purchase a variety of items, including:
- food and grocery items
- petrol
- public transport passes
- pre-paid power cards
- education and training-related items, such as stationery
- healthcare-related items, like medication
- clothing
- appliances
- household items.
Payment cards and MyMSD
Young people can use MyMSD to do the following:
- set and reset their payment card PIN
- check payment card balance
- check transaction details.
Note: Young people must set a PIN on their payment card before they can use it. For more information see - payment cards | Youth Service providers.
Youth service payment card suppliers
Young people can use their card at any store that is registered with Youth Service.
The full list of approved stores is available on the Youth Service website: www.youthservice.govt.nz/suppliers.
How to add new suppliers
If a store or business in your area falls within our supplier category, contact YSSU to check if they are on our system. If not, they will need to register as a Youth Service supplier on the Work and Income website: www.workandincome.govt.nz/online-services/supplier-registration/index.html
earning the right to receive payments directly
Young people can gain control of their payments if they have been assessed as financially competent.
A young person who has earned control over their payment has the choice to transfer all remaining funds on their payment card to their bank account or continue to use their payment card.
Financially competent
A young person is generally considered financially competent where they have:
- earned their budgeting incentive and
- shown consistent, sound financial judgement, which may include:
- the young person is spending their in-hand allowance on items that are appropriate for their situation
- any hardship assistance is justified
- the young person has reduced their costs
- the young person has found a part-time job and is managing the money they receive from it well.
opting out of money management
Young people who are not subject to Money Management will be able to receive their full payment directly when they have:
- turned 18 (YP) or 20 (YPP) years
- chosen to stay in Youth Service to complete their course of study, training or work-based learning, and
- provided written or verbal notice that they want to opt out of Money Management.
Note: when a young person opts out of Money Management, you should talk to them about transferring all remaining funds from their payment card into their bank account. Let them know that they can continue to use the rest of their money on their payment card if they want to.
payment card balance transfer
When a young person comes off Money Management, they can request for all remaining funds to be transferred to their bank account.
- If they have no debt with MSD, the funds will be paid into their bank account.
- If the young person has a debt with MSD, the debt will be recovered first from the balance on the payment card. Any remaining balance after their debt has been recovered will be paid into their bank account.
- If the young person does not wish to repay their debt, the funds will remain on their payment card and can only be used at approved Youth Service payment card suppliers.
The transfer is not instant. Youth coaches will need to check to make sure the young person has enough money to pay for their immediate needs ( like food) before confirming the transfer.
Note: The minimum amount to transfer is $1.00 – anything below this amount will remain on their payment card.
returning to money management
If a youth coach identifies that a young person should return to Money Management, after earning the right to manage their own payments, they must notify YSSU via ART.
A young person can be returned to Money Management for the following reasons:
- They have a sanction imposed for not meeting their activity obligations.
- They are demonstrating poor financial judgment.
YSSU will review the information the youth coach has recorded in ART and decide whether or not the young person should be returned to Money Management.