An ACC model for welfare? No thanks

Over the weekend, Social Development Minister raised the prospect of an ACC model for sickness and invalid’s benefits:

ACC’s focus on getting beneficiaries back to work could become a model for those on long-term social welfare, invalid and sickness benefits, says Social Development Minister Paula Bennett.

If ACC had continued under the Woodhouse principles upon which it was founded, and in particular under the principle of “complete rehabilitation”, Bennett’s suggestion might have some merit.

Back in the 1980s and early 1990s ACC would, for example, fund claimants who, because of their injuries, could no longer work in physical occupations to obtain a qualification that would allow them to take up a sedentary occupation with a similar earning capacity to what they had before their injury.

The comprehensive rehabilitation principle has, however, long been undermined, and ACC’s objectives today are primarily to get claimants off weekly compensation, even if it is into a minimum wage job or no job at all, as this study (PDF 1.67MB) by specialist ACC lawyers Hazel Armstrong and Rob Laurs found:

The significant majority of those claimants who did find work experienced an income reduction upon their re-integration into the workforce. Other workers in our sample-set who were deemed to be vocationally independent shifted on to benefits (mainly Invalid’s Benefits and Unemployment Benefits).

The longer the duration spent on weekly compensation prior to being assessed as vocationally independent, the greater the income reduction whether they were re-integrated into the workforce or shifted on to a benefit.

Although the research was restricted to the vocational independence process which occurs at the end of the rehabilitation offered by ACC, it became apparent that the claimants perceived that the rehabilitation received prior to them being deemed vocationally independent was incomplete.

Recent changes to ACC’s vocational independence assessment process, including the removal of the requirement that claimants’ pre-injury earnings be taken into account in conduction the assessments,  and administrative practices are now exacerbating the concerns expressed by Armstrong and Laurs. The primary objective of ACC is increasingly becoming one of getting injured people off compensation, rather than providing them with complete rehabilitation.

My bet is that Bennett is talking about moving sickness and invalid’s benefits to the insurance model that ACC is increasingly becoming based on, rather than to a model based on the Woodhouse principle of complete rehabilitation that it was founded on.

Otherwise she would not have cut the Training Incentive Allowance that used to allow invalid’s beneficiaries to get a tertiary education that would assist them back into the workforce.

5 Comments Posted

  1. Being a long term receiver of ACC payments due to a head injury I have over this time worked as a volunteer teacher aide and done lots of volunteer work. Voluntary teacher aiding started to take up 30 hours per week so ACC decided I could work 30 hours per week. What they seem to forget is that a volunteer you don’t have to be productive, you don’t have to be able to plan and you don’t have to stress. These are all the things that exasperate my injury and make it impossible for me to work for a production based business. But I do put back into the community about twice the amount ACC pays me a week. If you put me on the invalids benefit I could not afford the travel cost to carry on my voluntary work. Bennett needs to look at what beneficiaries do for the community before saying this is what they cost us.

  2. And lets not discount the role the State has in keeping a built in inefficiency by the needless criminalisation and labeling of tens of thousands over ‘pot’, both reducing lifetime disposable incomes and keeping them unemployable for as long as possible. (criminalisation is a guaranteed work scheme for some very highly paid non-productive sectors that are in a constant clamour for more funds.)

    Impact assessment anyone?

  3. Jeremy, we can’t get below 3% unemployment anyway – when the unemployment figures are calculated, they are based on a survey, a snap-shot in time if you will, which will include the short-term unemployed (those who have just lost their job and are going to get another one soon). It isn’t like the old days when unemployment figures were based on the number of registered unemployed, and thus tended not to include the short-term unemployed (which were very few in number as well).

    I know we managed to have as few as ten thousand long-term unemployed (by that I mean unemployed for more than six months) before the last boom came to an end.

  4. On kiwiblog I said this:

    Can someone please explain to Ms. Bennett how reserve banking works… When employment gets too low it drives inflation, so the RBNZ raises interest rates to slow economic growth (curbing inflation) and raise unemployment meaning we never get lower than 3% unemployment…

    The best thing to do with those who are unemployed and don’t want to work (about 0.5% of the working age population) is to let them not work and give the jobs that come up to those that are unemployed and do want to work…

    This is not going to change until we change; monetary policy, welfare policy or government spending policy…

  5. So they all get put onto unemployment benefit, but becasue of employers’ prejudices and their own impairments, have little chance of getting or holding down a job.

    The unemployment benefit pays less though, so they will have less dosposable income.

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