Vineeta Rao
Auckland, February 16, 2025
On Wednesday, Accident Compensation Corporation (ACC) Minister Andrew Bayly declared that half of the people on ACC for over a year should be back at work.
The Minister said that there were about 25,000 people who were on ACC for more than a year.
“When I talk to the board and executive team, 7000 will have long-term physical disabilities – they should be there. There are probably another 5000 who have got issues that would stop them from going back to work. There is probably the balance – you work out the number – 12,000, 13,000, who literally should be back at work,” he told Media.
The Minister added that he did not think those people were necessarily abusing or gaming the system, but the high number of people who did not need to be on ACC was the outcome of poor case management.
Deputy Chief Executive Michael Frampton responded rather circumspectly to the Minister’s statement, saying, “Of the approximately 24,000 clients currently in the long-term claims pool, we are proactively engaging with around 15,000 clients to support their return to work or independence.”
Getting ACC on track
Bayly mentioned about two reviews of ACC in a document titled ‘Getting ACC back on track.’
The announcement of the reviews came as no surprise, given that the beleaguered agency reported a $7.2 billion deficit in its 2023-24 report due to an increase in its Outstanding Claims Liability (OCL), representing the estimated lifetime costs of existing claims.
According to the report, the OCL grew by $8.7 billion, pushing the total liability to $60.2 billion.
Simply put, the operating deficit represents the difference between their investment fund and projected or estimated future costs of meeting claims.
The agency blames this on various court decisions expanding its boundaries, including a Court of Appeal hearing last year increasing compensation entitlements for sexual abuse victims by an estimated $3.4 billion.
However, the ACC reassured the public that the deficit did not impact their ability to provide services in any way.
According to a report put out by ACC in April last year, they accepted 2.04 million new injury claims in 2023/24, supported injured people with over $4 billion of treatment and rehabilitation services, and paid almost $3 billion in compensation payments.
The agency had proposed an increase in levies in September last year that would see household and business costs go up significantly. The government approved the levy rate hike of 5% for 2025-2028 in December last year.
Reviews to enhance performance
Mr Bayly revealed in his announcement that the ACC would be subjected to two reviews.
The first will examine ACC’s operational performance with a focus on case management after concerns over the agency’s declining rehabilitation performance. This review is led by the actuarial firm Finity. The second review will take a look at ACC’s investment strategy, led by investment consulting firm Willis Towers Watson, which will also review the agency’s management of the nearly $50 billion that it invests.
Progress made on the reviews would be available by April 2025, while the reviews would be expected to be completed by June 2025.
Meanwhile, in its bid to improve operational performance, ACC has implemented a three-year investment plan to improve client outcomes. Some of the measures outlined include the introduction of a more personalised case management system for low-complexity weekly compensation claims, as well as the formation of a team dedicated to supporting long-term clients and enabling their return to independence.
The Agency has continued to invest in injury prevention, a significant factor in claims, by dedicating $80 million over the last two years to a range of programs, including RugbySmart, Ride Forever and Farmstrong.
Despite his demand for more accountability, Bayly spoke well of the agency, saying, “ACC provides crucial support to injured Kiwis. It is the only no-fault accident compensation scheme like it in the world, and Kiwis should feel immensely proud of it,” a sentiment echoed by many Kiwis.
Vineeta Rao is an Indian Newslink Reporter based in Auckland.
