The Case for ACC Reform

Michael Mills

The Government has introduced a Bill to Parliament which, if passed, will result in significant changes to the institutional structure and delivery of New Zealand’s accident compensation scheme. These changes include: the introduction of  competition to the delivery of the Accident Compensation Corporation (ACC) Employers’ Account, a move from pay-as-you-go funding to full funding for all ACC accounts except the Non-Earners’ Account, the funding of outstanding tail claims over a period of 15 years, and the more commercial management of the ARCI Corporation. The Bill does not allow for the reintroduction of common law damages for personal injuries and retains scheme cover and entitlements largely in their current form.

This paper examines the case for change, focusing primarily on the introduction of competition to the Employers’ Account, and asks whether or not the costs of change will exceed the benefits.

It concludes that there is a strong case for change, and that, although there will be costs associated with reform, the overall benefits are likely to exceed these costs. The main benefits are expected to arise from increased employer focus on injury prevention, improved claims and case management and improved rehabilitation outcomes.