Moves to slash A.C.C. payouts

Press, 29 August 1980, Page 1

Moves to slash A.C.C. payouts

PA Wellington Proposed changes to the Accident Compensation scheme, which will cut the cost by more than $2O million a year and reduce the granting of lump-sum claims almost 60 per cent, were announced yesterday by the Associate Minister ■of Finance (Mr Quigley). The recommendations were made by a Cabinetcaucus committee established to examine possible changes to the legislation. Mr Quigley said yesterday that he hoped to introduce an amending bill later this year, and it was envisaged that the changes would take effect from April 1 next year. The main recommend-

ations of the committee are: — The denial of compensation to a person injured during the commission of specified crimes,' such as murder, rape, aggravated robbery, and drunken driving, where the injured person is convicted and jailed; — An extension to two weeks,' from the present one-week waiting period, before compensation fdr non-work accidents starts; — The abolition of lump-sum payments for minor injuries, with the exception of cosmetic injuries such as scarring or body contortion; — A substantial reduction in payments for noneconomic loss, such as pain and suffering;

— Placing .the onus for the payment, of the cost ,of t'.ie first two visits to a doctor or physiotherapist on the accident victim, and .allowing an employee injured at work to recover the amount from the employer; —. A reduction in the level of first-week compensation from 100 per cent to 80 per cent of preaccident earnings; — Placing more emphasis on workplace safety, by requiring employers to pay earning-related compensation to injured employees for up to two weeks after a work-related accident; — A change from a cash accumulation Accident Compensation scheme to a pay-as-you-go system;

— Replacement of the three-man Accident Compensation Commission by a board of directors, and a genera 1-manager type •administration. Mr Quigley said that t*he. denial of 1 Accident Compensation payments to those convicted of certain crimes, and subsequently imprisoned, had overwhelming caucus support. He also believed that the change would be supported by the public. People imprisoned after conviction for burglary, resisting arrest, or carrying a firearm with criminal intent, were also ineligble for Accident Compensation if injured in the commission of the crime. Mr Quigley said he had a

three-page list of crimes w’.iich came into this category. The committee also wanted to eliminate small claims for lump-sum payments for minor injuries such as the loss of an index finger or toe. “This would, in effect, cut out everything under $1000,” Mr Quigley said. The guide to which injuries should be compensated would be the existing A.C.C. schedules. There would be no payments on those injuries whicti were classed as" being less than 15 per cent by worth in the schedules. This meant that a victim who lost an index finger, measured in the shedule as a 14 per cent loss,

would get no lump-sum payment. However, if that victim lost a thumb — 28 per cent to 55 per cent in the schedule —- the commission would pay out. The ' committee also recommended a reduction in payments for pain and* suffering. This, Mr Quigley said, should encourage rehabilitation and re-entry to the workforce. He said the philosophy that was applied during the review of the scheme was that people should be prepared to carry at least part of the cost of their own injuries.

The proposed legislation would also impose a heavier burden on employers, who would now pay the first two weeks earnings in a work-related accident, instead of the first week only, those with a high accident rate should be encouraged by such a provision to be more careful, Mr Quigley said. The reduction in the level of the first week of compensation, from 100 per cent to ■ ) per cent of pre-accident earnings, was to ensure that victims of injury were not “overcompensated,” he said. There were work-related costs, such as transport, which did not apply during the recovery period. The committee had examined areas of sports injuries, hazardous activities, New Zealanders overseas, and visitors to New Zealand, but had decided against any changes in these areas, Mr Quigley said.

“It may well have been quite easy for the rugby clubs to be asked to cover themselves, but how do you differentiate between

that group and somebody who is engaged in a oneman sport, such as mountaineering and hang-glid-ing.

“Consideration was given to extending cover to the chronically sick, but the committee believed that Accident Compensation was an insur-ance-type scheme, and that sickness was the responsibility of the Social Welfare Department, and not the levy payer.” Mr Quigley said that the proposed structural change in the commission, from three commissioners to a board of directors and general manger, would also probably save money. The directors would not be full-time, and there' was no guarantee that the present commissioners — Messrs K. L. Sanford, J. L. Fahy, and H. J. Walker — would become directors. However, those who worked for the commission had no reason to fear that they might lose their jobs, he said. The recommendations of the committee should create a reduction in the cost of Accident Compensation, and lead to a restructuring of levy rates, Mr Quigley said.