Accident payments ‘not staying with inflation’

Press, 24 June 1986, Page 8

Accident payments ‘not staying with inflation’

PA Auckland A lawyers’ watchdog group says accident compensation payments are not keeping up with inflation. A “serious imbalance” is evident between the level of lump sum payments and earnings-re-lated compensation, says the public issues committee of the Auckland Law Society. “The public expectations for lump sum compensation fixed (in the Accident Compensation Act) in 1972 have not nearly kept pace with inflation,” the lawyers said and ”... public expectations ... for appropriate

compensation ... are no longer being realised.” They recommend the act be amended to increase maximum amounts payable by “at least” the inflationary percentage increase of the consumers’ price index since 1972, which it said was 414 per cent, and to provide for annual inflationlinked adjustments.

The 1972 act abolished the right to claim lump sum damages for injury from accident and replaced this with a scheme entitling the claimant to an amalgam of compensation comprising: • A lump sum for permanent loss or impairment of bodily function.

• A lump sum for the loss of enjoyment of life, disfigurement and the like.

• Earnings - related compensation to be paid during the period of earning incapacity.

The lump sum payments, said the society, were “dramatically reduced” in favour of the periodical payments of earnings-related compensation. An “integral part” of the scheme, it said, was that all compensation payable, whether periodical earnings-related or lump sums, would be adjusted to reflect the effects of inflation. “We believe this has not occurred.”