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.

MPs have heard that some proposed changes to accident compensation cover may result in the reintroduction of the right to sue.

One of the primary tenets of the Accident Compensation Corporation (ACC) system is that New Zealanders are covered for accidents and forgo the right to sue.

A select committee is hearing submissions on a bill which includes the introduction of a 6% threshold for hearing loss claims.

But the ACC Futures Coalition says that means for the first time in the scheme’s history an injury is being removed from cover.

Its spokesperson, Wellington lawyer Hazel Armstrong, says the move would be a field day for litigators such as herself.

The right to sue in tort in respect of personal injury was a common law right.  It is only the statutory provision of section 317 of the Injury Prevention, Rehabilitation, and Compensation Act that prevents injured people from suing those responsible for their injuries:

No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of—
(a) personal injury covered by this Act; or
(b) personal injury covered by the former Acts.

But remove the cover under the Act, as Nick Smith proposes for hearing loss of less than 6%, and the right to sue for personal injury is restored.

The Government estimates this cut to ACC cover will save ACC up to $4 million a year.    But it is not just that cost that will be borne by employers – there will be the associated costs of investigating and litigating damages claims by employees for low level hearing loss.

Employers have a choice – submit in opposition to this now, or lawyer up later.