How Does New Zealand’s ACC Compare Globally? Insights from an Advocate
By Chloe Harland
As an ACC advocate, I see the struggles and frustrations of many claimants who feel let down by the system. You’d be forgiven for thinking that as an ACC advocate, I must be anti-ACC. Surprise. I’m not. I think the scheme is good and delivers for many New Zealanders. However, given the size and scope of the Corporation, failures occur. Bad decisions are made. Worthy claimants are declined cover and entitlements, and this is when Harland and Associates come in. While New Zealand’s Accident Compensation Corporation (ACC) is often praised internationally, it’s important to take a closer look at its strengths and shortcomings from the perspective of those it serves.
What is ACC?
The Accident Compensation Corporation (ACC) is New Zealand’s no-fault accidental injury scheme. It provides financial compensation and support to residents and visitors who suffer personal injuries. Established in 1974, ACC covers costs related to recovery, including medical bills, rehabilitation, and loss of income. It’s funded by levies paid by employers, employees, vehicle owners, and tourists.
Comparing ACC to Global Systems
United States: Medical Malpractice System
In the U.S., to get compensation for medical injuries, you usually have to prove negligence through a malpractice suit. This process can be long and costly, with administrative costs eating up 50-60% of expenditures. In contrast, ACC’s administrative costs are only 10%. Also, many injured patients in the U.S. don’t qualify for compensation because proving negligence is so tough.
Australia and the United Kingdom
Australia and the UK have elements of no-fault systems but still involve significant litigation and higher administrative costs. Their health and welfare systems are comprehensive, but ACC’s approach ensures quicker processing times and more consistent compensation.
Sweden and Denmark: Avoidance of Harm Systems
Like New Zealand, Sweden and Denmark have systems that provide compensation for avoidable medical errors. These systems focus on patient safety and reducing adversarial claims. ACC shares this focus but stands out for its extensive coverage and low administrative costs.
Strengths of ACC
- Simplicity and Efficiency: ACC’s process is straightforward, with most claims resolved within nine months. This simplicity makes it easier for patients to navigate.
- Comprehensive Coverage: ACC covers a wide range of injuries, including work-related gradual process injuries and mental injuries caused by sexual abuse. This broad coverage ensures that most injury-related needs are met.
- Affordability: ACC is cost-effective, funded through a mix of taxes and levies, with low administrative costs compared to other systems.
- Focus on Prevention and Rehabilitation: ACC works closely with employers and healthcare providersto prevent injuries and ensure a smooth recovery.
Weaknesses of ACC
- Compensation Levels: Many feel ACC’s compensation levels are inadequate, especially for those not employed at the time of injury who can’t claim earnings-related compensation. I frequently meet claimants who struggle to cover their needs during recovery.
- Complex and Sometimes Unfair Decision-Making: The process of getting cover and entitlements approved can be complex and inconsistent. Many claimants face frustrating, seemingly arbitrary decisions to decline cover or entitlements. One of the most regular decline rationales from the Corporation is that a claimant’s condition is deemed ‘degenerative’ as opposed to acute (caused by an accident). I have written about this in its own blog post. I read hundreds of decline rationale documents from ACC and grow increasingly frustrated by the mere presence of degeneration being enough to exclude a claimant from cover for an injury caused by accident. Anyone over the age of 20 will have a degree of degenerative change. The Corporation has a duty of care and professionalism to ensure that claims are investigated properly to determine whether degeneration really is the whole or substantial cause of a condition, as opposed to a clear acute injury suffered against a background of expected degenerative change.
Conclusion
New Zealand’s ACC system is a pioneering model of no-fault compensation that offers many advantages over traditional systems found in other countries. Its simplicity, efficiency, comprehensive coverage, and affordability make it an impressive system by global standards. However, as an advocate, I see where ACC falls short, particularly in its decision-making process regarding declined cover and entitlements. These issues aren’t just about numbers; they represent real people struggling to get the support they need. The most regular decline rationale is that a claimant’s condition is ‘degenerative’ rather than acute. This rationale often overlooks the possibility of an acute injury against a backdrop of normal degenerative changes, leading to unfair exclusions. While ACC is a crucial part of New Zealand’s healthcare, there’s still much work needed to ensure it truly serves everyone effectively and fairly.
