Injury Prevention and Rehabilitation Bill

This Bill continues the government's commitment to a fair and sustainable scheme for reducing personal injury and providing rehabilitation and compensation. The government has taken a two-phase approach to this reform.

1. Overview

his Bill continues the government's
commitment to a fair and sustainable scheme for reducing personal injury and
providing rehabilitation and compensation. The government has taken a two-phase
approach to this reform.

1.1 Phase One Accident Compensation (Transitional Provisions) Act
The first phase reintroduced ACC as the sole provider of cover for workplace accidents. In March, the Government passed the Accident Compensation (Transitional Provisions) Actand the Accident Insurance Amendment Act, which:

• removed competition;
• returned responsibility for workplace accident cover to the Accident Compensation Corporation (ACC); and
• Introduced incentive programmes for employers to improve their approach to injury prevention and claims management.

1.2 Phase Two: Injury Prevention and Rehabilitation Bill
The second phase of the government's strategy is the Injury Prevention and Rehabilitation Bill. The Bill reaffirms the Woodhouse principles
upon which New Zealand's unique twenty-four hour, no-fault scheme was founded.

The Bill provides for a fair and sustainable scheme that reduces personal
injury, whilst minimising the incidence and impact of injuries in the community
(including economic, social and personal costs). To achieve this, ACC and the
scheme must focus on prevention, rehabilitation and compensation, in that order.
The Bill does just this. It says:

• ACC must work to prevent personal injuries and reduce their severity.
• When injuries do occur, ACC must focus on rehabilitating claimants as much
  as possible, and then help them get back to work and independence as soon as
  possible.
• During rehabilitation, claimants will receive fair compensation for loss of
  earnings from injury.

The Bill enhances entitlements available to claimants. It also means an ACC
that

• delivers a high standard of service to claimants and premium payers;
• continually targets high injury risk activities;
• works closely with other agencies in the broad injury management sector (e.g., OSH, LTSA, Ministry of Health);
• Is accountable for its performance and outcomes.
• Provides confidence to premium payers and taxpayers about the financial
  future of the scheme, through retention of full funding of Accounts, and prudent
  scheme management.

The Bill is the second phase of the government's election commitment to rebuilding a first class injury prevention, rehabilitation and accident compensation scheme.

The Government will keep ACC under review, and intends further reforms as the
improved performance of the scheme and the economy allows.

2. Changes

The Injury Prevention and Rehabilitation
Bill maintains current entitlements and other provisions, and contains new
features to achieve the objectives set out above.

2.1 Injury Prevention as a Primary Function of
ACC
Injury prevention will be a primary function of ACC. ACC and
the government will decide on ACC's injury prevention focus. ACC will finance
these activities out of the Account(s) where the expected reduction in premiums or other expenditure is expected to occur. For
example:

• The Employer's Account would pay for a campaign to prevent farm bike
  accidents
• The Earner's Account would pay for a campaign to prevent cycling injuries
• The Non-Earner's Account would pay for a campaign to prevent falls by
  children or the elderly
• The Motor Vehicle Account would pay for a campaign to reduce motor vehicle
  accident-related injuries

2.2 How Injury-Related Information will be Managed

Well-managed injury prevention strategies require comprehensive,
consistent and accessible information, across a number of different agencies.

The Injury Prevention and Rehabilitation Bill provides for a new information
framework across the injury prevention sector. This framework will collect,
analyse and disseminate information, improving research, policy development, and
the effectiveness of monitoring agencies.

The Bill also provides for the Prime Minister to appoint an information
manager to oversee the collection of, and access to, data across the different
agencies. The information manager will be able to require, consistent with
the provisions of the Privacy Act 1993, government agencies to provide
relevant information.

2.3 Rehabilitation Principle
Under the
Bill, ACC must provide rehabilitation to return injured people to independence
and participation to the maximum extent practicable. The Corporation will
consider various factors:

• the nature and consequence of the injury,
• the expected success of rehabilitation,
• Cost, and cost-effectiveness.

2.4 Lump Sum Entitlements
The Bill
provides for lump sums for permanent impairment. This change provides fairer
compensation for those who, through impairment, suffer 'non-economic' loss. This
includes both physical and mental impairment caused by a physical injury or
sexual abuse. The lump sum provision has the following features:

• claimants will be assessed using American Medical Association (AMA) guides
  and/or other guides as may be specified in regulations
• 'whole person impairment' will be the basis of assessment
• lumps sums kick in at a minimum impairment threshold of 10%,
• maximum lump sums become payable at 80% impairment or above.
• minimum payment will be $2,500; maximum will be $100,000
• annual adjustments according to the CPI
• more seriously injured claimants will receive proportionately more than less seriously injured claimants
• assessed when the claimant's condition has stabilised, or after 2 years, whichever occurs first
• only those who sustain injuries after the Act's implementation date can claim a lump sum.
• lump sums will replace the Independence Allowance. The Independence Allowance will continue for people injured before this Act's implementation date, but who lodge a claim after the implementation date.

2.5 Weekly Compensation

2.5.1 More Flexible Assessment of Loss of
Earnings
This Bill introduces a fairer way of determining weekly
compensation, which better reflects people's 'real' income. Any employee injured
while in receipt of weekly comp will continue to receive compensation at the
same level as for their prior injury.

The Bill also extends earner status to - for example - seasonal workers in
their off season and people injured while on unpaid parental leave. Before,
people in these circumstances were not entitled to weekly compensation.

2.5.2 A New Formula for Setting Minimum Level of Weekly Compensation
The Bill provides for more fair and transparent setting of the minimum level of weekly comp. The rate will be set at either the highest Invalid's Benefit rate, or 80% of the minimum wage - whichever is the highest.

2.6 Better Deals for Self-Employed People

The Accident Insurance Amendment Act 2000 enabled self-employed people to negotiate a guaranteed level of compensation. However, the deals they could negotiate were too rigid for many self-employed people, and the government accepts they need more flexibility.

The Injury Prevention and Rehabilitation Bill will allow self-employed people
to choose from products better suited to their needs and price ranges.

2.7 Premium Payment Provisions
The new
Bill is:

• Simple: it introduces simpler premium payment procedures.
• Easy: it allows instalment payments (administration fee charged),
• Responsible: it amends interest and debt provisions, encouraging timely
  collection.

2.8 Code of ACC Claimants' Rights
Under
the Bill, after a formal process of wide public consultation, the Minister will
approve a Code of ACC Claimants' Rights that sets out how ACC should behave when
dealing with claimants. The Code will:

• confer rights on claimants and obligations on ACC;
• define what constitutes a breach of Claimant Rights;
• provide a basis for enforcement mechanisms and remedies;
• be promoted by ACC.

2.9 Disclosure of Information
As part
of its Injury Prevention objective, the Bill includes two new information
disclosure provisions.

1. ACC will provide information to the Department of Child, Youth and Family
   Services, for the purposes of preventing injury arising through criminal
   activity.
2. ACC will report each incident of medical error, and ACC may report incidents of medical mishap, to the relevant professional body and the Health and Disability Commissioner. The purpose of this provision is to allow the appropriate body to intervene to prevent recurrence of the error or mishap.

2.10 Clarification of Cover Criteria: 'Gravity' Covered
The Injury Prevention and Rehabilitation Bill clarifies that accidents due to 'gravity' will be covered.

2.11 Protection for Claimants Injured before this Bill Becomes Law
Transitional provisions in the Bill will ensure continued eligibility for people receiving entitlements under previous Acts, including during the twelve months covered by private insurers.

2.12 Schedule of Occupational Diseases

In Schedule 2, the Bill updates the list of occupational diseases, which ACC
will accept as a work-related injury.

Select Committee submission process

15 December 2000

The Transport and Industrial Relations Committee is inviting public
submissions on the Injury Prevention and Rehabilitation Bill. The closing date
for submissions is 23 March 2001.

This bill is the second phase of the Government's strategy related to
accident and injury prevention. It provides for the re-introduction of lump sum
payments to accident victims.

Copies of the bill can be purchased from Bennetts Government Bookshops.

The committee requires twenty copies of each submission. Those wishing to
include any information of a private or personal nature in a submission should
first discuss this with the clerk of the committee, as submissions are usually
released to the public by the committee. Those wishing to appear before the
committee to speak to their submissions should state this clearly and provide a
daytime telephone contact number. For further guidance on making a submission,
our publication Making a Submission to a Parliamentary Select Committee can be
found on our web site at http://www.clerk.parliament.govt.nz

Submissions should be addressed as follows:

Lyn Main
Transport and Industrial Relations Committee Secretariat
Parliament House
WELLINGTON