ACC Media Statement
11 June 2009

170 ACC clients to lose weekly compensation

Some ACC clients will no longer be eligible for weekly compensation as a result of a 2006 court case that is only now being acted upon.

An inquiry from a select committee member in March this year prompted ACC to review whether it was correctly paying weekly compensation to certain groups.

ACC Chief Executive Dr Jan White said today, “This issue is about people who have stopped work because of the effects of an injury they received earlier, at a time when they were not employed.

“What happened is that we incorrectly paid weekly compensation to people in this position when the law did not allow us to. What the Court clarified is that ACC can only pay weekly compensation if people have a job at the time that they are injured.

Dr White said, “We should have acted immediately, after the court had issued its decision, but due to an internal oversight, we didn’t. We’re very sorry for this error.”

As a result of the latest investigation, ACC has determined that 170 of its clients are incorrectly receiving weekly compensation.

The Corporation is now in the process of contacting each of them to explain the situation, and since March had stopped any further people in this position being given weekly assistance.

“However we recognise that for the 170 people affected, the loss of the weekly compensation will have a significant impact on their lives.”

“Because of this we will ensure affected clients have time to adjust. We will continue to pay them weekly compensation until the end of October, and none of the people affected will have to repay any of the weekly compensation that they have received.

“I also want to stress that all other ACC entitlements they are eligible for, such as medical help, will continue. It is the weekly payments and vocational rehabilitation which is only provided to people getting weekly compensation that are affected.”

“Our priority now is to ensure that our clients get all the help they need to make the necessary adjustments. ACC will also be working closely with the Ministry of Social Development to help clients find out what other financial assistance might be available, and to minimise the disruption for each person in applying for new forms of assistance.

“I would also stress that if anyone thinks they might be affected by this change, and ACC has not yet managed to contact them, they should call their ACC Case Manager or use our freephone number – 0800 101 996. We would have liked to have seen all affected clients personally before making this public, particularly as many of them have suffered significant emotional trauma. Unfortunately media knowledge of this situation has led us to issue today’s statement. Despite starting the process of contacting the affected clients last Tuesday, we have not been able to contact all of them.

“Lessons have been learnt from this. We have reviewed internal procedures and processes to minimise the chances of this happening again,” said Dr White.

Questions and Answers

1. Why has this decision been made now?

Following on from comments at Select Committee, ACC reviewed its policy and practices for non-earners and their entitlement to weekly compensation. We found that some decisions to pay weekly compensation were not in line with the legislation and the 2006 court decision. As a result, some clients who were not eligible for weekly compensation have been receiving it.

2. What actually happened in the court (Giltrap) case?

The Court (Giltrap v ACC, AI 23/06, decision 141/2006) ruled that an employed person who is certified unfit to work because of an earlier injury is not entitled to weekly compensation if they weren’t working at the time they received the injury.

This decision reflects the court’s interpretation of the legislation that governs ACC: the Injury Prevention, Rehabilitation, and Compensation Act 2001 (IPRC Act 2001).

3.How much is ACC paying out?

$4 million in 2008/09.

4. What does this decision mean for affected clients?

Affected clients will still have cover for their ACC claim, for instance, medical treatment, but will not be entitled to weekly compensation or vocational rehabilitation (which is only available to those on weekly compensation).

5. Will ACC make people pay this money back?

No, it will not. These are special circumstances, and both ACC and the affected clients believed, wrongly, that clients were eligible for weekly compensation.

6. What will clients do once they have their weekly compensation stopped?

It will depend on their individual circumstances. We will help the affected clients work through their options. Some of these options may be help from Work and Income.

7. Which clients has this affected? Did this happen more in one area than another?

A range of clients were affected from around the country. There is no greater percentage of clients from any one area. There are about 170 affected clients.

8. What took so long to put this operational policy into action?

These are complex issues; however there was also an operational oversight on ACC’s part that caused it not to put this policy into place until now.

9. Is this about ACC trying to save money?

No it’s not. ACC must act within the legislation and we found that there were some cases where we had not been doing that. We accept responsibility for that and have now put a process into place to stop that from happening.

10. Why did ACC pay this money in the first place? Isn't the legislation clear?

ACC did believe that we could pay these clients. The district court clarified that we had misinterpreted the legislation. We are obliged to revoke the entitlement to weekly compensation.

11. How can you justify removing weekly compensation from someone who relies on it, and why are you giving these client such a long transition period?

Under the law we cannot provide weekly compensation to clients who are not entitled to it. We recognise that this could have a significant effect on some of the clients involved, which is why we have implemented the transition period until 31 October 2009. We’ve given this time so that affected clients and their families have time to consider their options.

12. Whose fault is this?

This is a legislative requirement. Although we were previously acting incorrectly, we were acting in good faith, as were our clients, and we acknowledge that we made an error with those decisions. We have apologised to the affected clients and given them a transition period before we cease their weekly compensation.

13. Why can ACC not just stop new people? It is not the clients’ fault ACC got it wrong.

ACC is governed by legislation, and now that we have had this part of the legislation clarified we must abide by it. There is no room within the legislation to keep anyone on weekly compensation who doesn’t fit the criteria.

14. Did the Minister for ACC make ACC do this?

No. This is an ACC operational issue and is managed by ACC, not the Minister for ACC.

15. This does not seem fair, why is this happening to these clients?

It’s very unfortunate, and we acknowledge that this will have a significant impact on our clients. We’re sorry for any distress this may cause but the court has made it clear how the law is to be applied and we must abide by the legislation.

16. Can clients dispute the decision to stop weekly compensation?

Yes, normal review rights apply to these decisions and clients can lodge an application for review.

ENDS

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