Injury Prevention And Rehabilitation Bill
General Policy Statement
Overview
This Bill continues the government‘s commitment to a fair and sustainable scheme for reducing personal injury. The
government has taken a two-phase approach to this reform. The first phase was to reintroduce ACC as the sole provider of
cover for workplace accidents. Government passed legislation in March 2000 to remove competition; return responsibility
for workplace accident cover to the Accident Compensation Corporation (ACC); and introduce programmes that provide
incentives for employers to improve their approach to injury prevention and claims management.
The Injury Prevention and Rehabilitation Bill is the next phase of the government’s strategy. The Bill reaffirms the
Woodhouse principles upon which New Zealand’s unique twenty-four hour, no-fault scheme was founded. The Bill provides
for a fair and sustainable scheme for managing personal injury that has as its overriding goals minimising both the
overall incidence of injury in the community and the impact of injury on the community (including economic, social and
personal costs).
In order to achieve these goals, ACC and the scheme must focus on prevention, rehabilitation and compensation, in that
order. The Bill makes clear that the primary role of ACC and the scheme must be to focus on injury prevention and
reducing the incidence and severity of personal injury. In those instances where injuries do occur, the focus will be on
rehabilitating claimants to the maximum practicable extent, and facilitating, where possible, a sustainable return to
work and independence as soon as possible. While rehabilitation occurs, claimants will receive fair compensation for
loss of earnings from injury.
The Bill maintains and enhances the entitlements available to claimants. It provides for an ACC that delivers a high
standard of service to claimants and premium payers; is responsive in its injury prevention and claims management
strategies; works closely with other agencies in the broad injury management sector; and is accountable for its
performance and outcomes. The Bill also retains full funding of Accounts and other mechanisms to ensure premium
stability and prudent scheme management, so that premium payers and tax payers can feel confident about the financial
future of the scheme.
The Bill, while addressing the most important priorities for government, does not address all of the items on the injury
management reform agenda. The scheme will be kept under review, and further changes and amendments made as the improved
performance of the scheme and the economy allows.
Summary of Key Changes
In addition to maintaining current entitlements and other provisions, the Injury Prevention and Rehabilitation Bill
contains a number of new features that are intended to achieve the objectives set out above.
Injury Prevention as a Primary Function of ACC
The Injury Prevention and Rehabilitation Bill establishes injury prevention as a primary function of ACC to promote
measures to reduce the incidence and severity of personal injury. The Bill provides a framework for ACC and the
government to set the level and scope of injury prevention activities to be provided by ACC. The costs of these
activities are to be met through being charged to the Account(s) where the reduction in premiums or other expenditure is
expected to occur; through sponsorship or joint ventures; or, where the savings accrue to the community more indirectly,
through funding by appropriation.
Management of Injury-Related Information
The development and monitoring of well co-ordinated injury prevention strategies requires comprehensive, consistent and
accessible information, across a number of different agencies. The Injury Prevention and Rehabilitation Bill provides
for a new information framework across the injury prevention sector, to facilitate data collection, aggregation,
analysis and dissemination, for such purposes as improving research, policy development, and monitoring of agencies’
effectiveness. The Bill provides for the establishment of an ‘information manager’, to be appointed by the Prime
Minister. The manager may perform functions such as setting standards for the collection of and access to data across
the different agencies operating in the injury prevention sector; and can require, consistent with the provisions of the
Privacy Act 1993, government agencies to provide relevant information.
Rehabilitation Principle
The Injury Prevention and Rehabilitation Bill specifies a new rehabilitation principle; namely that rehabilitation is to
be provided by the Corporation to restore the claimant’s health, independence and participation to the maximum extent
practicable. In deciding what is ‘practicable’, the Corporation is required to take into account a variety of relevant
factors, such as the nature and consequence of the injury, the achievement of rehabilitation outcomes, availability of
other forms of rehabilitation, cost, and cost-effectiveness. The new rehabilitation objective is reflected in the
objectives for treatment entitlements and the different forms of rehabilitation. Schedule 1 (which sets out
entitlements) has been structured along these principles.
Lump Sum Entitlements
The Bill provides for a lump sum payment for permanent impairment. The intent of this change is to provide fairer
compensation for those who, through impairment, suffer non-economic loss. This includes both physical impairment and
mental injury (caused by a physical injury or sexual abuse). The lump sum provision has the following features:
assessment using American Medical Association (AMA) guides and/or other guides as may be specified in regulations
assessment based on whole person impairment
a minimum impairment threshold of 10%, with the maximum payable for 80% impairment
a minimum payment of $2,500 and a maximum of $100,000
annual adjustments according to the CPI
calibrated so that more seriously injured claimants receive proportionately more than less seriously injured claimants
assessed when the claimant’s condition has stabilised, or after 2 years, whichever occurs first
lump sums will only be available to claimants who sustain injuries after the Act’s implementation date, and the
assessment of impairment will be based only on injuries that take place after the Act’s implementation date
lump sums will replace the Independence Allowance. However, the Independence Allowance will continue to be available
to people who sustained an injury prior to the Act’s implementation date, but who lodge a claim after the implementation
date.
More Flexible Assessment of Loss of Earnings
When calculating a person’s entitlement to weekly compensation (which is based on previous earnings), any period during
which the person was on weekly compensation or significant periods of unpaid sick leave will, under the Bill, be
excluded from the earnings calculation. In addition, any employee who is injured while in receipt of weekly compensation
will continue to receive compensation at least at the same level as for their prior injury. The Bill also addresses a
number of anomalies with respect to extending earner status in certain circumstances (and hence entitlement to weekly
compensation) to seasonal workers and people injured while on unpaid parental leave. The intent of these changes is not
to introduce a significant change to entitlements, but to provide a fairer and more certain way of determining
compensation, which better reflects a claimant’s ‘normal’ earnings pattern.
New Formula for Setting Minimum level of Weekly Compensation
The Bill provides a more fair and transparent mechanism for setting the minimum level of weekly compensation payable to
potential earners and full-time earners. The rate will be set at the higher of the relevant Invalid’s Benefit rate or
80% of the relevant minimum wage. The intent of this change is to ensure that minimum compensation rates remain at least
no less than the relevant Invalid’s Benefit rate.
More Flexible Products for Self-Employed
The AI Amendment Act 2000 provided for the self-employed to purchase a guaranteed level of compensation. This level of
compensation is payable irrespective of any subsequent earnings (and is priced accordingly). The Injury Prevention and
Rehabilitation Bill provides for the development of a more flexible product or products for the self-employed, that
allows self-employed people to specify the package of weekly compensation best suited to their needs and price range.
Premium Payment Provisions
The Injury Prevention and Rehabilitation Bill provides for more simplified regulations with respect to premium payment
procedures, by incorporating a number of provisions that were previously set out in regulations within the Bill. The
Bill also allows for premiums to be paid by instalments (with an administration fee charged), and amends the interest
and debt provisions, with the objective of encouraging timely collection.
Code of ACC Claimants’ Rights
The Injury Prevention and Rehabilitation Bill provides for the development, through a formal process of wide public
consultation, of a Code of ACC Claimants’ Rights, to be approved by the Minister. The Code will apply to all ACC
activities that entail contact with claimants. Its purpose is to confer rights on claimants and obligations on ACC, in
relation to the way that ACC should conduct itself when dealing with claimants. The Code will define what constitutes a
breach; provide a basis for enforcement mechanisms and remedies; and include indicators relating to ACC performance,
which will be monitored as part of ACC’s accountability processes. ACC must also make the Code accessible and promote
awareness of its provisions.
Disclosure of Information
The Bill includes two new information disclosure provisions, with the objective of improving injury prevention. Firstly,
the Bill enables ACC to provide information to the Department of Child, Youth and Family Services, for the purposes of
preventing injury arising through unlawful activity. Secondly, the Bill requires ACC to report each incident of medical
error, and provides discretion for ACC to report incidents of medical mishap, to the relevant professional body and the
Health and Disability Commissioner. The purpose of this provision is to allow the appropriate body to intervene to
prevent recurrence of the error or mishap.
Clarification of Cover Criteria
The Injury Prevention and Rehabilitation Bill clarifies that accidents due to ‘gravity’ will be covered.
Protection for Claimants Injured under Previous Acts
The Bill contains transitional provisions that ensure that people who received entitlements under previous Acts, and
remain eligible, continue to receive such entitlements. The Bill also maintains a number of provisions relating to the
regulatory regime for the private market. The intent of these provisions is to ensure that the entitlements of claimants
injured under previous Acts, including during the twelve months covered by private insurers, are protected where
appropriate.
Schedule of Occupational Diseases
The Bill modernises the list of occupational diseases, set out in Schedule 2. The list sets out those diseases which, if
suffered by someone employed in work which involves exposure to such risks, are defined as constituting a work-related
injury.