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ACC Bill Cutting Entitlements Makes Progress Into Law

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Feb 12 NZPA - A proposed law change to cut ACC entitlements and coverage has passed select committee scrutiny with only minor changes.

The ACC reform bill includes reversing 2008 income compensation extensions covering casuals, part-timers, non-earners and abatements for holiday pay, introduced a 6 percent hearing loss threshold and cuts compensation for self-injury and suicide.

It also extends the deadline for the corporation to collect enough levies to cover all past costs from 2014 to 2019.

National MPs on the committee said the changes were necessary because ACC's financial position had deteriorated significantly in recent years with a $4.8 billion deficit in 2008/2009 due to large cost increases.

"The majority of us (on the committee) believe that the bill is required to maintain a comprehensive ACC system," the select committee report said.

Both Labour and the Greens opposed the changes with Labour MPs writing that a case for cutting entitlements had not been made and the recent increases in liabilities had been used as excuse.

"Most costs saved by cutting ACC entitlements will not go away, but will be passed to the health system, the injured and their families, and other state agencies," Labour MPs said.

"We support the extension to the date for full funding of historic claims, but oppose the bill overall."

The Greens shared the criticisms of Labour but disagreed with both major parties on ACC's funding mechanism saying that ACC should only levy enough money each year to cover that year's costs with a contingency reserve.

ACC Minister Nick Smith welcomed the bill's report back to Parliament, saying the recommendations will help secure the long-term future of the accident compensation scheme.

"The levy increases proposed by ACC's Board last year under the current law are too much for New Zealanders to pay," Dr Smith said.

"The changes the Government is making will more than halve these increases easing the impact on households, workers, businesses and motorists."

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