New scheme to treat ill, injured alike

Press, 28 July 1989, Page 4

New scheme to treat ill, injured alike

By

PETER LUKE

The injured and the ill will be treated alike in the combined incapacity scheme which will replace Accident Compensation and sickness benefits from April, 1991.

The Government is determined that the new scheme will not increase the costs of present sickness and injury provisions. It will ensure this by effectively extending the period before injury victims can get earning-re-lated compensation. A waiting period will be imposed then another period will be spent on a flat rate benefit before earningsrelated compensation is assessed. Details of the new scheme have not been determined, but it does represent a clear Government move to remove disparity between the treatment of the injured, and the ill. The scheme will apply to those aged under 60 and will have three, stages. The initial waiting period; the period on a short-term flat rate benefit; and then seriously incapacitated former earners could get earn-ings-related compensation, while a long-term incapacity benefit would be available to those not earning when they were injured or fell sick. Officials could not say last evening how long the first two periods would last or at what level the various benefits and com-

A.C.C.

pensation-would be set.

But the short-term flatrate benefit will be higher for those earning at the onset of incapacity, than for non-earners. The longterm incapacity benefit will be higher than the short-term flat rate benefit. Severely disabled people will be eligible also for a disability allowance to offset the higher costs they face. The new scheme is still likely to be funded from employer levies, motor vehicle levies and general taxation, but no details of precise amounts paid from each source — or who will administer the scheme — have been given. Since A.C.C. was introduced in 1974 injured people unable to work have been able to gain 80 per cent of former earnings, irrespective of whether their injury was work-related. Those disabled by illness or by genetic misfortune have been dependent on means-tested social welfare benefits. “To distinguish the

means and level of income support for the incapacitated on the basis of different causes of incapacity is contrary to notions of fairness,” said the Minister of Finance, Mr Caygill. "To do so not only invites criticism of the inequity of the situation, but also puts strain on the administration of the more generous accident compensation scheme.” Accident compensation payouts have increased from $9B million in 197879 to $777.4 million in the last financial year. The Royal Commission on Social Policy believed that if accident compensation was extended to cover illness, its cost would increase four-fold. It recommended that income-related compensation should begin four weeks after an accident, with a flat-rate benefit of about $250 a week in the interim. The Minister of Social Welfare, Dr Cullen, said that the new Universal Benefit, also announced last evening, would be integrated with the new scheme.