Focus on ACC

Over the almost four decades of its existence, the idea seems to have taken hold, particularly among some of its beneficiaries, that placement on an ACC earnings-related compensation scheme is a sinecure.

This is far from the original intention of the "benefit".

When the Accident Compensation Act came into existence in 1972, it was designed to cover workplace accidents of employed workers.

This evolved into a universal no-fault public insurance by which all accidents, including those incurred in motor vehicles, and regardless of how injury might have occurred, would be covered.

The principle of lump-sum payments for permanent disability was eventually established along with earnings-related benefits for accident victims during convalescence and rehabilitation.

Perhaps unsurprisingly costs began to rise and there have been various attempts to rein them in, notably by the National government in the early 1990s, efforts regarded to have been undone through the largesse of the Labour-led administrations that succeeded it.

With respect to weekly earnings-related compensation, there are now complaints of a return to "the bad old days" of medical assessments being used in attempts to remove claimants from the scheme.

In fact, medical assessments are a necessary component of a fair and workable scheme in which claimants are regularly assessed as to their eligibility to remain on it, rather than return to the ranks of the employed in some capacity or other.

Were these checks not to exist, nor to be carried out with some rigour, the entire system would be vulnerable to abuse and, not to put too fine a point on it, to fraud.

And that fraud is, of course, perpetrated upon the rest of the working population whose taxes support the ACC scheme.

Any organisation which is responsible for the allocation of public funds must also be accountable for the ways in which those monies are distributed and it is incumbent on ACC management to ensure, on behalf of the general populace, that its guidelines are adhered to, and that any potential for rorting the system is minimised.

There has been in the first year of Prime Minister John Key's National-led Government a degree of agitation and posturing around the exact state of ACC's books.

The Government, through ACC Minister Nick Smith, claimed the corporation was "financially unsustainable".

When ACC's annual report was tabled in October last year, it showed a loss of $4.8 billion following a $2.4 billion loss the year before.

Those figures may seem worse than they are in reality given the dramatic effect of the recession through 2008 and first half of 2009 on the corporation's assets - assets which can be expected to have recovered some of their value.

The use of them to justify potential inclusion of private insurance in the scheme, and to raise levies as the Government has now done, deserves ongoing scrutiny.

But none of this should diminish concern over the growth in future liabilities - from $9.4 billion to $23 billion over four years during the latter stages of the Labour-led government.

A significant part of this will be due to commitments to future earnings-related compensation.

It fully justifies any heightened urgency on the part of ACC's case managers required to validate their clients' continued qualification for the benefit.

It is largely irrelevant to the broader debate and if indeed there is perceived to be a more proactive stance on the part of the corporation in such matters, then this may simply speak of a complacency that had been allowed to creep into the system in previous years.

There are undoubtedly many people who genuinely qualify to remain on the earnings-related scheme, but there will be those, too, who faced with the choice of going back to work or receiving an inflation-adjusted weekly payment of 80% of a former wage, might simply prefer to go fishing.

That, unfortunately, all too often is human nature.

Those charged with minding the ACC shop are well within their rights to do their best to ensure it does not happen.

The Otago Daily Times

Comments (1)

Show/hide comments

Show/hide comment form