Independence AllowanceAccident Insurance
The Government is changing the scope of the Independence Allowance for people with multiple injuries across all ACC Schemes, as part of a raft of measures that will be put in place to prepare for a more competitive workers' compensation environment.
Accident Rehabilitation and Compensation Insurance Minister Murray McCully and Associate ARCI Minister Deborah Morris have today announced key measures which reinforce, clarify and in some instances will improve what injured New Zealanders receive under the ACC scheme.
"These changes will form part of the basic level of entitlements that we intend writing into law this year, in preparation for allowing employers and the self-employed to shop around for their workplace insurer from July next year," the Ministers said.
"ACC claimants will receive at least the level of entitlements they get now," they said.
"The fact that the Coalition Government is providing choice to employers and the self-employed so they will be able to opt for a private sector insurer or the Crown's insurer will create a competitive environment that will help strengthen the incentives that employers and insurers have to take good care of employees and focus on safe work places and practices."
The Ministers said that with the market for some parts of ACC opening up to competition, there was a need for greater clarity and certainty of entitlements for claimants, insurers and premium payers. The changes will take effect from 1 July 1999, after the passing of new ACC legislation due to be introduced to Parliament in September.
"For a start," the Ministers said, "the Government has decided to increase the help given to people with multiple injuries by providing separate Independence Allowance payments of up to $60 per week for each claim from injury that results in a level of impairment of 10% or more.
"There will be no cap on the number of allowances or the total amount paid."
Currently only one Independence Allowance of up to $60 per week could be paid to a person with multiple injuries, regardless of the number of injuries or claims involved.
"The changes will mean that people suffering from a number of significant injuries over several years will get more assistance."
The Ministers said the changes were important because while 92% of ACC claims processed each year were relatively minor and involved very little if any time off work, the multiple injury claims tended to be the most serious of the other 8% of claims categorised in the moderate to serious range.
"The Government is also moving to recognise occupational diseases more explicitly," the Ministers said. "There will be a schedule of specified diseases that insurers will be required to cover in addition to the general broader provisions for occupational diseases that currently exist.
"This will ensure New Zealand's continued compliance with ILO Convention 42, which seeks to ensure workers suffering from specific diseases associated with their work will receive appropriate care and compensation."
The Government has also taken account of limited income earners in self-employment, such as retired people in part-time self-employment, by providing that self-employed people will be allowed either to choose a private insurer after 1 July 1999 or to stay with the ARCI Corporation for ACC insurance cover for workplace injuries and for injuries that happen out of work.
"Those who choose to shop around would have to purchase insurance that includes cover for at least 80% of a minimum $14,560 annual income," they said. "The self-employed people who chose to stay with the ARCI Corporation will receive entitlements as they do now." Mr McCully and Ms Morris said self-employed people would have more choice and greater certainty with these decisions.
The Government also intends to provide guidelines within the new ACC legislation on the basic high quality treatment and rehabilitation that will have to be provided in the new competitive environment.
"Insurers will be required to provide the medical treatment and social rehabilitation necessary to enable claimants to lead as normal a life as possible, having regard to the consequences of their injury," the Ministers said.
"There will be limits on what the insurers have to provide, based on reasonableness and practicality. But the new legislation will make it clear to insurers what their responsibilities are, while new regulations may spell out the minimum they would be required to provide for treatment costs and social rehabilitation services.
"The Health Funding Authority will purchase public hospital acute services on behalf of insurers, " the Ministers said. "Injured people who arrive at accident and emergency rooms will continue to be treated on the present basis.
The Ministers also said the current work capacity assessment process and rules would be defined in the new ACC legislation, underlining a requirement that assessment must be carried out by a properly qualified vocational expert and a medical expert.
Mr McCully and Ms Morris said the Government also planned to simplify how workers compensation payments were calculated.
They said compensation would still remain at 80% of earnings.
But instead of the complicated formula currently used, it was proposed that compensation be based on the earnings received in a person's current permanent employment, divided by the number of weeks the person had been working there. Annual earnings would be divided by 52 if they had been employed there for more than a year.
"Compensation for temporary employees, including seasonal, part-time and casual workers, will continue to be based on earnings over the previous 12 months," the Ministers said.
The Ministers emphasised that all New Zealanders would continue to be covered by the ACC scheme, which remained 24 hour, no fault and comprehensive.
"The Government will work to ensure that employers and the self-employed are aware of all these changes, and the opportunities that competition will bring," they said, "and encourage them to make a positive choice of insurer when the market opens next year."