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Not acceptable that ACC doesn't cover illness: OECD

New Zealand's ACC scheme should be extended to cover illness, the OECD has said in a new report.

Thursday, December 13th 2018, 12:28PM 5 Comments

The report, Mental Health and Work in New Zealand, was released today.

It said New Zealand had an issue because of the "strict and adverse" distinction between injuries, which were covered by ACC, and illnesses, which were not.

Those who suffered mental health injuries and illnesses were at a disadvantage because of htis.

“The inequitable divide in New Zealand’s system between injury and illness has created a two-tier health care system where integrated health services and vocational rehabilitation support is prioritised for injury, through ACC, and not illness. This is particularly significant for people with mental health conditions,” the report said.

It said expanding the ACC scheme was not popular because of concerns about its financial sustainability.

“But the current situation is not acceptable. ACC intervention is often effective because support is flexible, in line with injured people’s needs; it involves all relevant actors, i.e. people, their employers and health professionals including general practitioners; and it includes vocational services and return-to-work support.”

The report said there were three options for New Zealand: To expand the coverage of ACC to also include illness, as it said was always intended when the system was originally introduced; to partially expand ACC to include at least some illnesses such as, for example, all chronic work-related health problems or to learn from the successful features of ACC’s approach and introduce as many of them as possible in other employment and income support systems, especially the support provided by Work and Income.

Former prime minister Sir Geoffrey Palmer delivered a similar message in September.

A "single unified system" would end unjust discrimination, he said.

ACC Minister Iain lees-Galloway didn’t discount the idea at the time but said it would require considerable public debate.

Tags: ACC

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Comments from our readers

On 14 December 2018 at 4:47 pm Paul J Burns said:
"Inequitable" (on the face of it) can be fairly and reliably interpreted to be either a merely neutral comment or indeed a harsh judgemental critique. Hence the report would be well served to use more unambiguous terms.

Moreover, Sir Geoff's claim that the system is somehow "unjust" is debatable. Especially when you can usually point to clear distinctions between certain types of specific illnesses and injuries.

My limited understanding too, is that ACC's initial premise was to negate the threat of becoming a mini-me of USA (where individuals resort to suing for personal injury). When it comes to illness (and perhaps in many case of self imposed depression -resulting from selfishness and increasing rates of narcissism) who else can you blame/sue (other than yourself)?
On 16 December 2018 at 2:07 pm dcwhyte said:
Good points, Paul. I wasn't in NZ when ACC was established, but I understood it was set up as a 'no-fault' compensation fund in the event of accidental injury?

The UK struggled with this for a few years - the aim of setting up a 'no fault'scheme just didn't get enough political support or potential funding from the Public Purse, and while the UK has avoided the outrageous personal action settlements in the US, this is partly due to the compulsory Employers Liability insurance required by statute. As the name suggests, liability has to be established before a settlement can be contemplated.

The NZ ACC Scheme was often quoted as an example but the UK was unable to adopt a suitable model.

Adding illness to the current scheme will add hugely to claims and to the cost of running the scheme. The Income Protection cover experience in NZ and, in particular, the Group SalCon experience in Australia should be a warning to anyone seeking to extend ACC to cover illness also.

Sorry, Mr Palmer, unjust discrimination will not be ended unless you are willing to commit billions of dollars worth of as yet unfunded future liabilities.

In the OECD, Holland had an extraordinary compensation system in the 1970s based on their Natural Gas revenues, but even they retreated from funding Monday morning hangovers when the pressure on public funding became unsustainable. Elsewhere in Europe, higher taxation funds the more extensive coverage suggested, but the much higher taxation required is likely to be politically contentious.
On 17 December 2018 at 8:44 am Referee said:
It is absurd to think of further tampering to the original ACCIDENT compensation scheme. Paul and David make very valid points and NZ taxpayers certainly would not want to have to fund the huge expense of including mental health and sundry illnesses. In fact, we should go back to the basics of the Scheme.
On 18 December 2018 at 6:11 am JPHale said:
Great comments Paul and David. How the scheme works presently on the most part works well. It has its challenges, as does everything.

To add medical conditions to the scheme opens or into the farse that is public health and the NHS experience in the UK is a good example of the slippery slope. Where the system is now so broken that private insurance, as it is here, is something that is needed.

If we are to improve public health, then approaching Southern Cross for a ’public’ policy would be a far better approach. They know what they're doing in primary healthcare and do a damn good job with what they have in place and it already works at volume.

This would give an excellent baseline for public health and extension of this then becomes something of individual choice.

It would provide a simple and somewhat elegant solution to the mixed response we presently receive from public health.

Leaving the big funding hole of mental health to be addressed, which could be incorporated into the public policy approach reasonably effectively
On 18 December 2018 at 12:38 pm Bikedude said:
ACC struggle to adequately cope with accidents. To add illness would cause a Snunami of claims and costs. Keep ACC as it is , ie Accident cover, and encourage NZs to take out health insurance by offering tax deductibility for the cost. After all, it successfully unburdens the tax payer so why should it not be given a fairer tax treatment.

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