Accident Compensation Corporation
Encyclopedia
The Accident Compensation Corporation (ACC) is a New Zealand
Crown entity responsible for administering the Accident Compensation Act 2001. The Act provides support to citizens, residents, and temporary visitors who have suffered personal injuries.
The ACC Scheme provides a range of entitlements to injured people, from contribution towards the cost of treatment, to weekly compensation for lost earnings (paid at a rate of 80% of a person's pre-injury earnings), and to home or vehicle modifications for the seriously injured. The entitlements offered by the Scheme are subject to various eligibility criteria. ACC, as a Crown entity, is responsible to a Cabinet Minister via its Board of Directors
. The current Minister responsible for ACC is Hon Dr Nick Smith
.
In 1967, a Royal Commission
report ('The Woodhouse Report
') recommended that this compensation should be extended to all injuries on a no-fault basis. Following this report, on 1 April 1974 the Accident Compensation Commission was established, to operate the 1972 Accident Compensation Act, and the 1973 Amendments. The Act was later replaced by the Injury Prevention, Rehabilitation and Compensation Act 2001, which was renamed the Accident Compensation Act 2001 in 2010.
The Annual Report (1989/90) of the Accident Compensation Commission proposed that the distinction between "accidents" (which is covered) and "illness" (which is not) should be dropped. But this proposal was not taken up. In 1992 the Accident Compensation Commission changed its name to the "Accident Compensation Corporation".
From 1 July 1999 the Fourth National government
allowed private insurance operators to provide work-related accident insurance, and ACC was briefly exposed to competition. Following the election of the Fifth Labour government
in November 1999, this change was repealed, and as of 1 July 2000, ACC was re-instated as the sole provider of accident insurance coverage.
The four main accounts are: Work, Earners, Non-Earners, and Motor Vehicle. There is also a fifth account, Treatment Injury (formerly Medical Misadventure) that draws on both the Earners and Non-Earners account.
In late 2008, it was found by the incoming National government that ACC had a shortfall in the non earners account of $300 million per year. As a result of this, ACC levies on wages and motorists were increased.
The 100% reimbursement scheme for physiotherapist services, known as the Extended Practice Network (EPN), was ended in 2009 to cut costs. Between 2006 and 2009 the spending had increased from $40 million to $120 million per year. This cost escalation is thought to have been the result of physiotherapy services being made free at the point of delivery and that business model very quickly led to over-servicing of patients. Physiotherapy was championed by the previous Labour Government as a cheaper means of providing services than general medical practitioner
s. Physiotherapy remains the dominant clinical discipline within ACC.
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
Crown entity responsible for administering the Accident Compensation Act 2001. The Act provides support to citizens, residents, and temporary visitors who have suffered personal injuries.
Features
ACC is the sole and compulsory provider of accident insurance for all work and non-work injuries. The ACC Scheme is administered on a no-fault basis, so that anyone, regardless of the way in which they incurred an injury, is eligible for coverage under the Scheme. Due to the Scheme's no-fault basis, people who have suffered personal injury do not have the right to sue an at-fault party, except for exemplary damages.The ACC Scheme provides a range of entitlements to injured people, from contribution towards the cost of treatment, to weekly compensation for lost earnings (paid at a rate of 80% of a person's pre-injury earnings), and to home or vehicle modifications for the seriously injured. The entitlements offered by the Scheme are subject to various eligibility criteria. ACC, as a Crown entity, is responsible to a Cabinet Minister via its Board of Directors
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...
. The current Minister responsible for ACC is Hon Dr Nick Smith
Nick Smith (New Zealand)
Nicolas Rex "Nick" Smith is a New Zealand politician and a member of the New Zealand Parliament as a National Party MP...
.
| "Our pledge is to prevent injury, to provide the best treatment and care if injury occurs, and to quickly rehabilitate people back to work or independence at a price that offers high value to levy payers and all New Zealanders." |
| The Accident Compensation Corporation pledge |
History
ACC is rooted in the 1900 "Worker's Compensation Act", which established a limited compensation scheme for workers who had suffered injuries where there was no directly responsible party.In 1967, a Royal Commission
Royal Commission
In Commonwealth realms and other monarchies a Royal Commission is a major ad-hoc formal public inquiry into a defined issue. They have been held in various countries such as the United Kingdom, Australia, Canada, New Zealand, and Saudi Arabia...
report ('The Woodhouse Report
Owen Woodhouse
Arthur "Owen" Woodhouse, ONZ, KBE, DSC is a New Zealand jurist and chair of government commissions.He was born in Napier and graduated from the University of Auckland with an LL.B. in 1940. During the World War II he served as a Lieutenant Commander in the Royal New Zealand Naval Volunteer Reserve...
') recommended that this compensation should be extended to all injuries on a no-fault basis. Following this report, on 1 April 1974 the Accident Compensation Commission was established, to operate the 1972 Accident Compensation Act, and the 1973 Amendments. The Act was later replaced by the Injury Prevention, Rehabilitation and Compensation Act 2001, which was renamed the Accident Compensation Act 2001 in 2010.
The Annual Report (1989/90) of the Accident Compensation Commission proposed that the distinction between "accidents" (which is covered) and "illness" (which is not) should be dropped. But this proposal was not taken up. In 1992 the Accident Compensation Commission changed its name to the "Accident Compensation Corporation".
From 1 July 1999 the Fourth National government
Fourth National Government of New Zealand
The Fourth National Government of New Zealand was the government of New Zealand from 2 November 1990 to 27 November 1999. Following in the footsteps of the previous Labour government, the fourth National government embarked on an extensive programme of spending cuts...
allowed private insurance operators to provide work-related accident insurance, and ACC was briefly exposed to competition. Following the election of the Fifth Labour government
Fifth Labour Government of New Zealand
The Fifth Labour Government of New Zealand was the government of New Zealand between 10 December 1999 and 19 November 2008.-Overview:The fourth National government, in power since 1990, was widely unpopular by 1999, with much of the public antagonised by a series of free-market economic reforms,...
in November 1999, this change was repealed, and as of 1 July 2000, ACC was re-instated as the sole provider of accident insurance coverage.
Funding
ACC is funded through a combination of levies and government contributions. Income collected from each source goes into predetermined account based on the source. Costs relating to an injury are paid from one of these accounts based on the type and cause of the injury.The four main accounts are: Work, Earners, Non-Earners, and Motor Vehicle. There is also a fifth account, Treatment Injury (formerly Medical Misadventure) that draws on both the Earners and Non-Earners account.
| Account | Covers | Income sources |
|---|---|---|
| Work | Work-related injuries | Levies collected from employers, based on the size of the business's payroll and the risks associated with its industry. |
| Earners | Non-work injuries by income earners | Levies collected in conjunction with tax deductions on income. Paid via the Inland Revenue Department. As of October 2010, the earners levy is 2.04% of non-exempt taxable income up to $110,000pa |
| Non-earners | Non-work injuries by non-income earners (e.g. children, elderly, unemployed, visitors) |
Government contribution from the general taxation pool. |
| Motor Vehicle | Injuries relating to motor vehicles on public road | Levies included in the price of petrol and diesel, and through motor vehicle license fees. |
| Treatment Injury | Injuries as a result of medical treatment | Combination of funds from the Earners and Non-Earners accounts. |
2009 non earners account shortfall
In 1999, funding from ACC changed from ‘pay-as-you-go’ to a ‘fully funded’ way of operating. The full lifetime costs of every claim for the year were to be levied instead of paying as costs were incurred.In late 2008, it was found by the incoming National government that ACC had a shortfall in the non earners account of $300 million per year. As a result of this, ACC levies on wages and motorists were increased.
The 100% reimbursement scheme for physiotherapist services, known as the Extended Practice Network (EPN), was ended in 2009 to cut costs. Between 2006 and 2009 the spending had increased from $40 million to $120 million per year. This cost escalation is thought to have been the result of physiotherapy services being made free at the point of delivery and that business model very quickly led to over-servicing of patients. Physiotherapy was championed by the previous Labour Government as a cheaper means of providing services than general medical practitioner
General practitioner
A general practitioner is a medical practitioner who treats acute and chronic illnesses and provides preventive care and health education for all ages and both sexes. They have particular skills in treating people with multiple health issues and comorbidities...
s. Physiotherapy remains the dominant clinical discipline within ACC.