More than 30,000 benefits and other payments were wrongly suspended with concerns continually raised for three months before being appropriately escalated, a government review has found.The botch-ups affected more than 2400 main beneficiaries and some were left thousands of dollars out of pocket before they were backpaid, while the total arrears bill reached $2.5 million.The Ministry of Social Development (MSD) on Thursday released its review into two major problems that surfaced following a law change last year.The change required many beneficiaries to confirm their circumstances annually to ensure they remained eligible for their payments.The Winter Energy Payment (WEP) should have been exempt from that process, but it was not, which meant thousands of pensioners missed out on payments they should have received.Secondly, processing delays caused by a high volume of people confirming their circumstances meant some paperwork was not checked in time, so their benefit payments stopped.MSD apologised and everyone has been backpaid, but none would receive compensation because that was not authorised under the law, the review said.MSD chief executive Debbie Power said the ministry was usually good at implementing complex legislation, often under short time frames."That did not happen in this case," she said."I would like to apologise to everybody who's been affected. Some people did all the right things, but still had their payments suspended."Asked who should be held accountable, Power told Checkpoint the costly mistake was her responsibility.But she had no plans to resign."I've been CE for about eight years of MSD, I've led the agency through many challenges. We didn't do enough, we didn't do a good job, the review is really clear that we need to do better, and I'm committed to doing that," she said."I'm certainly accountable, I'm certainly fronting up and demonstrating that I am accountable for this... My job is to fix this."She said the ministry was "extremely disappointed" by the review's findings."We did not meet the expectations we have of ourselves, and that others should have of us. We're extremely disappointed. We got this wrong," she said."Of course I'm sorry, I apologise to anybody that has been impacted as a result of these issues. It should not have happened, it did happen, we got it wrong."Minister Louise Upston also apologised, saying people should have been able to have confidence they would receive the payments they were entitled to."What happened with these payments was frustrating and unacceptable, and I want to again apologise to the people who were affected," she said."I am particularly disappointed it took too long for MSD to recognise there was a wider problem, even as individual cases were being reported. The review makes clear that stronger systems are needed to identify those warning signs earlier, and I expect those recommendations to be implemented swiftly."Ministry did not properly consider legislation implicationsThe review found 16,720 pensioners' and veterans' WEP payments were wrongly suspended.It detailed the complex web of payments some people receive, and revealed the ministry did not consider that the WEP for pensioners must be explicitly excluded from the new law when it was being drafted.Power said she could not say whether the legislation going through the full select committee process would have discovered the problem."Nobody consciously thought about the impact of whether [the] Winter Energy Payment would be impacted through this process. We are where we are, we got it wrong."The highest missed payment total was $468.21.MSD slow to escalateMinister of Social Development Louise Upston.RNZ/Nick MonroThe WEP problem was first raised on 30 April by an MSD staffer, the review said.Staff and clients continued to raise it over three months, but were told the system was operating as intended under the legislation, and MSD did not identify a wider pattern, it said.Senior leadership was not told until 13 August."This experience highlights the importance of frontline staff as an early source of insight in understanding emerging risks or unintended consequences before they are visible in formal reporting," the review said.Asked what had triggered the escalation to senior leadership, Power said she had been talking to staff on 12 August and one had brought her a letter from a client concerned about it."I looked at the letter and thought 'that can't be right'... it was only a matter of time before it came up. It should have come up way earlier."MSD underestimated workload, more than 2400 lost main benefitsDelays following the "confirming your circumstances" process saw 2460 people's main benefit suspended (more than $800,000 in total), while 11,990 people had their supplementary assistance stopped ($1.7m in total).The average arrears payment for a beneficiary was $390, while the highest was nearly $3000.For supplementary assistance payments like the Accommodation Supplement or Disability Allowance, the average was $140 while the highest payment was about $2800.MSD did not anticipate the number of clients that would report changes in their circumstances, or the volume of people who would return them by post rather than digitally, the review found.The problem was compounded by clients receiving automatic emails from MSD telling them their payments would be suspended, who then contacted staff - adding further to workloads, which then meant more beneficiaries were affected.An IT update also disrupted the email notification process so some clients were unaware they had a letter waiting for them in the MyMSD client portal.Recommendationsamending the Social Security Act 2018 to ensure WEP for pensioners is excluded from the mandatory reviews processstrengthening quality assurance processes around legislation development, including sign-off from someone senior who is independent from the policystrengthen the handling of law changes that affect operationsimprove modelling ahead of significant operational changes, including factoring in "significant areas of uncertainty" and ensuring it is independently challenged.Opposition parties call for PM, minister to take accountabilityLabour leader Chris Hipkins said Upston and the prime minister must apologise and take full accountability for the problems, and called for changes to the use of parliamentary urgency."The responsibility for this absolute fiasco rests with the ministers in charge, that's Louise Upston and Christopher Luxon. It's time they fronted up and apologised and explained why they were willing to let this happen."He said Upston "clearly didn't even bother to read" the legislation, when as leader of the House it was her job to make sure the government did not make these kinds of mistakes.Labour social development spokesperson Willow-Jean Prime said they were "hiding behind officials, letting them front for a mess National made"."The review is damning. It makes clear the root cause of this disaster was National's rushed lawmaking and up to 700 jobs cut at MSD."