Accident Compensation Amendment Bill

Accident Compensation Amendment Bill

Government Bill

49—1

Explanatory note

General policy statement

This Bill has 2 broad objectives—

  • to ensure that ACC continues to meet society’s expectations by providing cover and entitlements that are appropriate, consistent, and sustainable:

  • to improve the Accident Compensation Act 2001 (the Act) by ensuring that it is effective and efficient and accords with best regulatory practice.

The amendments will achieve these objectives by—

  • addressing regulatory duplication, gaps, errors, and inconsistencies within and between different pieces of legislation:

  • keeping the regulatory system up to date and relevant.

The amendments in the Bill were identified partly through the regulatory systems work programme of the Ministry of Business, Innovation, and Employment (the Ministry). This work programme arises from the chief executive’s responsibility under section 32 of the State Sector Act 1988 to relevant Ministers for the regulatory stewardship of the legislation administered by the Ministry. The Ministry has a stewardship role that includes the responsibility to review the regulatory instruments under its portfolios to ensure that they are fit for purpose. The amendments to the Act are intended to maintain the effectiveness and efficiency of regulatory systems by—

  • removing the election requirement for ACC clients to choose between weekly compensation and New Zealand superannuation after being entitled to a year of both:

  • amending the current provisions to ensure that all clients who are close to or above superannuation qualification age receive up to 24 months of weekly compensation:

  • allowing surviving spouses to receive up to 5 years of weekly compensation, regardless of age:

  • removing the requirement for other dependants to elect between weekly compensation and superannuation:

  • moving from an annual review to a biennial review of the treatment costs payable under Accident Compensation (Liability to Pay or Contribute to the Cost of Treatment) Regulations 2003:

  • enabling the maximum and minimum liable earnings that set the parameters for weekly compensation and levies payable to be specified by a method (for example, linking the maximum and minimum liable earnings to the minimum wage and the Labour Cost Index respectively to improve the workability of biennial levy rounds):

  • disestablishing the Accident Compensation Appeal Authority, which hears cases under the 1972 and 1982 accident compensation legislation.

The Bill addresses other fairness and sustainability issues. This includes an amendment that will treat the spouses, partners, children, and other dependants of New Zealand workers posted overseas who suffer an injury consistently with how they would be treated had the injury occurred while they were living in New Zealand. Coverage would primarily be on return to New Zealand because ACC does not usually cover overseas treatment costs.

The Veterans’ Support Act 2014 (the VSA) includes a “mirror” accident compensation scheme for veterans that is aligned with entitlements provided in the Accident Compensation Act 2001. The Bill’s changes to the interface between weekly compensation and superannuation require amendments to the VSA to maintain the VSA’s alignment with the weekly compensation provisions in the Accident Compensation Act 2001.

Minister of Finance’s statement on consultation process followed in formulation of amendments to New Zealand Superannuation and Retirement Income Act 2001

Section 73 of the New Zealand Superannuation and Retirement Income Act 2001 (the NZSRI Act) provides that the Minister must, on introduction into the House of Representatives of a Government Bill that proposes an amendment to the NZSRI Act, bring to the attention of the House the consultation process followed in forming the proposed amendment.

The Minister responsible for the relevant part of the NZSRI Act is the Minister of Finance.

The Minister’s statement about consultation must include (without limitation)—

  • whether consultation has taken place with the parties that are in agreement with the Part proposed to be amended (as listed in Schedule 4 of the NZSRI Act):

  • whether consultation has taken place with the Guardians of New Zealand Superannuation (to the extent that the amendment relates to Part 2 of the NZSRI Act):

  • the results of the consultation.

This Bill proposes a consequential amendment to Part 1 of the NZSRI Act. The proposed amendment is clearly beneficial for older people and will provide for a fairer and more consistent relationship between weekly compensation and superannuation by allowing an injured person’s financial situation to more closely reflect their income had they not been injured, because those people who continue to work past New Zealand superannuation qualification age are able to receive superannuation alongside any earnings from work.

Consultation has been undertaken with the parties that are in agreement with the Part proposed to be amended (as listed in Schedule 4 of the NZSRI Act). These are the Green Party and the New Zealand National Party.

No consultation was undertaken with the Guardians of New Zealand Superannuation, as the Bill does not propose to amend Part 2 of the NZSRI Act.

Departmental disclosure statement

The Ministry is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact assessment

The Ministry produced a regulatory impact assessment on 5 December 2016 to help inform the policy decisions taken by the Government about weekly compensation and superannuation and about the Accident Compensation Appeal Authority. A regulatory impact assessment relating to the Bill’s other policy is not required.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 provides that this Bill comes into force on the day after Royal assent.

Clause 3 states that the Bill amends the Accident Compensation Act 2001 (the Act).

Part 1Amendments to Accident Compensation Act 2001

Clause 4 amends section 17 of the Act. Section 17 currently provides that certain New Zealand workers who are absent from New Zealand primarily in connection with their employment duties do not cease to have New Zealand as their permanent place of residence. The effect is that these workers’ personal injuries, where they occur outside of New Zealand, are covered by the Act. The usual situation for New Zealanders suffering personal injuries outside of New Zealand is that there is no coverage if the absence is for more than 6 months or if they intend to be absent from New Zealand for more than 6 months. In circumstances where section 17 does allow a person to be covered for a personal injury outside New Zealand, treatment costs outside of New Zealand are not generally paid, but ongoing entitlements (including treatment costs) can be provided on return to New Zealand in accordance with the Act.

Clause 4(2) amends section 17 so that the spouses or partners, children, or other dependants of the New Zealand workers just described must be treated as having New Zealand as their permanent place of residence if they suffer a personal injury outside of New Zealand. This will mean their personal injuries are covered if the other requirements of the Act are met.

This amendment is given retrospective effect by the new transitional provision in Schedule 1 of the Bill, to be inserted by clause 9 into Schedule 1AA of the Act. The effect is that a spouse or partner, child, or other dependant of a New Zealand worker who suffered a personal injury outside New Zealand between 1 July 1999 and the commencement of the Bill must be treated as if New Zealand were the person’s permanent place of residence in respect of that injury.

Clause 5 replaces section 324A of the Act to require reviews of certain rehabilitation-related amounts that the Accident Compensation Corporation is liable to pay only every second year rather than annually, as is currently required.

Clause 6 amends the regulation-making power in section 329(1)(a) of the Act, which is related to specifying maximum amounts or deemed minimum amounts of earnings, to allow for the specifying of methods for calculating those amounts.

Clause 7 amends section 391 of the Act to provide that, after the amendment comes into force, all appeals will be to the District Court and none will be to the Accident Compensation Appeal Authority (the Authority). Appeals under the 1972 and 1982 accident compensation legislation can currently be made to the Authority, but appeals under the more recent legislation are to the District Court. Partially heard cases will continue to be dealt with by the Authority (see the new transitional provisions in Schedule 1 of the Bill, to be inserted by clause 9 into Schedule 1AA of the Act).

Clause 8 inserts into the Act new section 402, which disestablishes the Accident Compensation Appeal Authority and provides that its disestablishment does not give rise to any related liability to its members or employees.

Clause 9 amends the heading of Schedule 1AA of the Act, inserts a new Part 1 heading above its existing provisions, and inserts a new Part 2, which contains transitional, savings, and related provisions relating to this Bill.

Clause 10(1) replaces clauses 52 and 53 of Schedule 1 of the Act to eliminate the requirement for a claimant to elect between weekly compensation and superannuation. Clause 10(2) repeals clauses 68 and 69 of Schedule 1, which impose age-related limits on weekly compensation for surviving spouses or partners. Clause 10(3) replaces clauses 72 and 73 of Schedule 1 to remove a requirement for any other dependant of a deceased claimant to elect between weekly compensation and superannuation.

The amendments in clause 10(1) and (3) have the effect of providing for 24 months of weekly compensation for entitled persons, regardless of whether they receive superannuation as well. The amendments in clause 10(2) provides that the weekly compensation for surviving spouses will be unaffected by their reaching superannuation age. New transitional provisions provide that existing recipients of weekly compensation may elect to have the former regime apply (see the new transitional provisions in Schedule 1 of the Bill, to be inserted by clause 9 into Schedule 1AA of the Act).

Part 2Related and consequential amendments

Subpart 1—Amendment to New Zealand Superannuation and Retirement Income Act 2001

Clause 11 replaces section 7(2) of the New Zealand Superannuation and Retirement Income Act 2001. This amendment is consequential on the various amendments removing compulsory elections as between weekly compensation and superannuation (while preserving recipients’ rights to elect to have the former regime apply).

Subpart 2—Amendments to Veterans’ Support Act 2014

Clause 12 states that clauses 13 to 16 amend the Veterans’ Support Act 2014 (the VSA). The changes to the VSA mirror the changes made in clause 10 to the Accident Compensation Act 2001.

Clause 13 replaces section 65 of the VSA to eliminate the requirement for an election as between weekly income compensation and superannuation or a veteran’s pension.

Clause 14 replaces section 104 of the VSA to eliminate the requirement for an election as between weekly compensation and superannuation or a veteran’s pension.

Clause 15 inserts new Part 3 in Schedule 1 of the VSA. That Part contains transitional provisions preserving the rights of recipients of weekly compensation or weekly income compensation to elect to have the former regime apply.

Clause 16(1) repeals clauses 56 and 57 of Schedule 2 of the VSA, which impose age-related limits on weekly compensation for surviving spouses or partners. This has the effect that the weekly compensation for surviving spouses will be unaffected by their reaching superannuation age. Clause 16(2) replaces clauses 60 and 61 of Schedule 2 of the VSA to remove a requirement for any other dependant of a deceased veteran to elect between weekly compensation and superannuation. New transitional provisions provide that existing recipients of compensation may elect to have the former regime apply (see the new transitional provisions in Schedule 2 of the Bill, to be inserted by clause 15 into Schedule 1 of the VSA).

The effect of the changes in clauses 13 to 16 is, as with the changes to the accident compensation regime, to provide for a minimum of 24 months of weekly compensation for entitled persons, regardless of whether they receive superannuation as well.

Hon Iain Lees-Galloway

Accident Compensation Amendment Bill

Government Bill

49—1

Contents

Explanatory note
1Title
2Commencement
3Principal Act
4Section 17 amended (Ordinarily resident in New Zealand)
5Section 324A replaced (Annual review of amounts prescribed by regulations made under section 324)
324ABiennial review of certain amounts
6Section 329 amended (Regulations relating to levies)
7Section 391 amended (Review and appeal proceedings for decisions under former Acts)
8New section 402 and cross-heading inserted
402Disestablishment of Accident Compensation Appeal Authority
9Schedule 1AA amended
10Schedule 1 amended
11Amendment to New Zealand Superannuation and Retirement Income Act 2001
12Amendments to Veterans’ Support Act 2014
13Section 65 replaced (Relationship between weekly income compensation and New Zealand superannuation or veteran’s pension)
65Relationship between weekly income compensation and New Zealand superannuation or veteran’s pension
14Section 104 replaced (Relationship between weekly compensation and New Zealand superannuation or veteran’s pension)
104Relationship between weekly compensation and New Zealand superannuation or veteran’s pension
15Schedule 1 amended
16Schedule 2 amended

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Accident Compensation Amendment Act 2018.

2 Commencement

This Act comes into force on the day after the date of Royal assent.

3 Principal Act

This Act amends the Accident Compensation Act 2001 (the principal Act).

Part 1 Amendments to Accident Compensation Act 2001

4 Section 17 amended (Ordinarily resident in New Zealand)

Replace section 17(4) with:

(4)

A person must be treated as having New Zealand as the person’s permanent place of residence if—

(a)

the person—

(i)

intends to resume a place of residence in New Zealand; and

(ii)

is absent from New Zealand primarily in connection with the person’s employment duties (the remuneration for which is treated as income derived in New Zealand for New Zealand income tax purposes) or for up to 6 months following the completion of the person’s period of employment outside New Zealand; or

(b)

the person—

(i)

intends to resume (or assume) a place of residence in New Zealand; and

(ii)

is the spouse or partner, child, or other dependant of a person described in paragraph (a) and generally accompanies that person; and

(iii)

is outside New Zealand during the period of employment of the person described in paragraph (a) or for up to 6 months following the completion of it.

5 Section 324A replaced (Annual review of amounts prescribed by regulations made under section 324)

Replace section 324A with:

324A Biennial review of certain amounts

(1)

The Corporation must conduct a review in 2018, and in every second year after that, of the amounts prescribed by regulations made under section 324 that the Corporation is liable to pay for the entitlement of rehabilitation.

(2)

The purpose of the review is to assess whether adjustment to any of the amounts is required to take into account changes in costs of rehabilitation.

(3)

The Corporation must, by 1 December of each year in which a review is conducted,—

(a)

provide a report on the results of the review to the Minister; and

(b)

include in that report any recommendations for change that it may have.

6 Section 329 amended (Regulations relating to levies)

Replace section 329(1)(a) with:

(a)

specifying, in relation to levies, the maximum amounts or deemed minimum amounts of earnings for levy purposes or methods for calculating any of those amounts:

7 Section 391 amended (Review and appeal proceedings for decisions under former Acts)

After section 391(1), insert:

(1A)

Subsection (1) is subject to the following qualifications:

(a)

any appeal to which subsection (1) applies that is commenced on or after the date on which this subsection comes into force must be made to the District Court and not to the Accident Compensation Appeal Authority; and

(b)

to the extent practicable, the procedure for such an appeal is to be the same as the procedure for appeals under Part 5.

8 New section 402 and cross-heading inserted

After section 401, insert:

Disestablishment of Accident Compensation Appeal Authority

402 Disestablishment of Accident Compensation Appeal Authority

(1)

The Accident Compensation Appeal Authority that was established by section 155 of the Accident Compensation Act 1972 and continued by section 103 of the Accident Compensation Act 1982 is disestablished.

(2)

No member or employee of the Authority before its disestablishment is entitled to any payment or compensation for any loss arising out of the disestablishment.

9 Schedule 1AA amended

(1)

In the Schedule 1AA heading, replace Transitional and savings provisions relating to amendments to this Act made by Accident Compensation Amendment Act 2015 with Transitional, savings, and related provisions.

(2)

In Schedule 1AA, before clause 1, insert:

Part 1 Provisions relating to Accident Compensation Amendment Act 2015

(3)

In Schedule 1AA, insert the Part 2 set out in Schedule 1 of this Act.

10 Schedule 1 amended

(1)

In Schedule 1, replace clauses 52 and 53 with:

52 Relationship between weekly compensation and New Zealand superannuation

(1)

Subclause (2) applies to a claimant who—

(a)

first becomes entitled to weekly compensation before reaching New Zealand superannuation qualification age; and

(b)

has been entitled to it for 24 months or longer before reaching that age.

(2)

The claimant loses entitlement to weekly compensation on reaching that age.

(3)

Subclause (4) applies to a claimant who first becomes entitled to weekly compensation—

(a)

less than 24 months before reaching New Zealand superannuation qualification age; or

(b)

on or after reaching New Zealand superannuation qualification age.

(4)

The claimant is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.

(5)

Nothing in this clause entitles a claimant to weekly compensation if the claimant is not otherwise entitled to it under this Act.

(2)

In Schedule 1, repeal clauses 68 and 69.

(3)

In Schedule 1, replace clauses 72 and 73 with:

72 Relationship between other dependant’s weekly compensation and New Zealand superannuation

(1)

Subclause (2) applies to any other dependant who—

(a)

is entitled to weekly compensation immediately before reaching New Zealand superannuation qualification age; and

(b)

has been entitled to it for 24 months or longer before reaching that age.

(2)

The dependant loses entitlement to weekly compensation on reaching that age.

(3)

Subclause (4) applies to any other dependant who first becomes entitled to weekly compensation—

(a)

less than 24 months before reaching New Zealand superannuation qualification age; or

(b)

on or after reaching New Zealand superannuation qualification age.

(4)

The dependant is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.

(5)

Nothing in this clause entitles any other dependant to weekly compensation if the dependant is not otherwise entitled to it under this Act.

Part 2 Related and consequential amendments

Subpart 1—Amendment to New Zealand Superannuation and Retirement Income Act 2001

11 Amendment to New Zealand Superannuation and Retirement Income Act 2001

(1)

This section amends the New Zealand Superannuation and Retirement Income Act 2001.

(2)

Replace section 7(2) with:

(2)

However, a person is not entitled to receive New Zealand superannuation in respect of the period for which the person has made an election, as contemplated by any of the following provisions, to be entitled to weekly compensation rather than to New Zealand superannuation:

(a)

clause 3(3) of Schedule 1AA of the Accident Compensation Act 2001:

(b)

clause 16(3) or 17(3) of Schedule 1 of the Veterans’ Support Act 2014.

Subpart 2—Amendments to Veterans’ Support Act 2014

12 Amendments to Veterans’ Support Act 2014

Sections 13 to 16 amend the Veterans’ Support Act 2014.

13 Section 65 replaced (Relationship between weekly income compensation and New Zealand superannuation or veteran’s pension)

Replace section 65 with:

65 Relationship between weekly income compensation and New Zealand superannuation or veteran’s pension

(1)

Subsection (2) applies to a veteran who—

(a)

first becomes entitled to weekly income compensation before reaching New Zealand superannuation qualification age; and

(b)

has been entitled to it for 24 months or longer before reaching that age.

(2)

The veteran loses entitlement to weekly income compensation on reaching that age.

(3)

Subsection (4) applies to a veteran who first becomes entitled to weekly income compensation—

(a)

less than 24 months before reaching New Zealand superannuation qualification age; or

(b)

on or after reaching New Zealand superannuation qualification age.

(4)

The veteran is entitled to weekly income compensation for 24 months from the date of entitlement to the compensation.

(5)

Nothing in this section entitles a veteran to weekly income compensation if the veteran is not otherwise entitled to it under this Act.

14 Section 104 replaced (Relationship between weekly compensation and New Zealand superannuation or veteran’s pension)

Replace section 104 with:

104 Relationship between weekly compensation and New Zealand superannuation or veteran’s pension

(1)

Subsection (2) applies to a veteran who—

(a)

first becomes entitled to weekly compensation before reaching New Zealand superannuation qualification age; and

(b)

has been entitled to it for 24 months or longer before reaching that age.

(2)

The veteran loses entitlement to weekly compensation on reaching that age.

(3)

Subsection (4) applies to a veteran who first becomes entitled to weekly compensation—

(a)

less than 24 months before reaching New Zealand superannuation qualification age; or

(b)

on or after reaching New Zealand superannuation qualification age.

(4)

The veteran is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.

(5)

Nothing in this section entitles a veteran to weekly compensation if the veteran is not otherwise entitled to it under this Act.

15 Schedule 1 amended

In Schedule 1, after clause 15, insert the Part 3 set out in Schedule 2 of this Act.

16 Schedule 2 amended

(1)

In Schedule 2, repeal clauses 56 and 57.

(2)

In Schedule 2, replace clauses 60 and 61 with:

60 Relationship between other dependant’s weekly compensation and New Zealand superannuation

(1)

Subclause (2) applies to any other dependant who—

(a)

is entitled to weekly compensation immediately before reaching New Zealand superannuation qualification age; and

(b)

has been entitled to it for 24 months or longer before reaching that age.

(2)

The dependant loses entitlement to weekly compensation on reaching that age.

(3)

Subclause (4) applies to any other dependant who first becomes entitled to weekly compensation—

(a)

less than 24 months before reaching New Zealand superannuation qualification age; or

(b)

on or after reaching New Zealand superannuation qualification age.

(4)

The dependant is entitled to weekly compensation for 24 months from the date of entitlement to the compensation.

(5)

Nothing in this clause entitles any other dependant to weekly compensation if the dependant is not otherwise entitled to it under this Act.

Schedule 1 New Part 2 inserted into Schedule 1AA of Accident Compensation Act 2001

s 9(3)

Part 2 Provisions relating to Accident Compensation Amendment Act 2018

3 Retrospective application of amended section 17(4)

Section 17(4) (as amended by the Accident Compensation Amendment Act 2018) applies between 1 July 1999 and the commencement of this clause as if it were in force during that time.

4 Certain claimants may elect rules of former scheme

(1)

In this clause, former provisions means clauses 52(6) to (9) and 53 of Schedule 1 as they read immediately before the commencement of this clause.

(2)

This clause applies to a claimant who first became entitled to weekly compensation—

(a)

under the former provisions; and

(b)

while the claimant was 64 years of age or older but not yet 65 years of age.

(3)

The claimant may make an election under clause 52(8) of the former provisions in accordance with clause 53 of the former provisions, and, if the claimant does so, the former provisions continue to apply to the claimant.

5 Certain other dependants may elect rules of former scheme

(1)

In this clause, former provisions means clauses 72(6) to (9) and 73 of Schedule 1 as they read immediately before the commencement of this clause.

(2)

This clause applies to any other dependant who first became entitled to weekly compensation—

(a)

under the former provisions; and

(b)

while the other dependant was 64 years of age or older but not yet 65 years of age.

(3)

The other dependant may make an election under clause 72(8) of the former provisions in accordance with clause 73 of the former provisions, and, if the other dependant does so, the former provisions continue to apply to the other dependant.

6 Completion of matters-in-process by Accident Compensation Appeal Authority

(1)

In this clause, matter-in-process means a matter before the Accident Compensation Appeal Authority immediately before the commencement of this clause and includes—

(a)

an appeal that had been lodged with the Authority but not finally determined by it; and

(b)

an application to the Authority for leave to appeal to the High Court, including any made under—

(i)

section 168 of the Accident Compensation Act 1972; or

(ii)

section 111 of the Accident Compensation Act 1982.

(2)

The Authority must complete any matter-in-process.

(3)

For the limited purpose of completing all matters-in-process, the Authority is deemed to continue, and the Authority’s powers and capacities continue in effect for that purpose.

(4)

A member of the Authority is entitled to be paid reasonable remuneration, fees, or salary for the member’s work in completing a matter-in-process, and any related allowances and expenses.

(5)

The Ministry of Justice must continue to provide support services to the Authority to the extent that those services are required to complete the matters-in-process.

Schedule 2 New Part 3 inserted into Schedule 1 of Veterans’ Support Act 2014

s 15

Part 3 Provisions relating to Accident Compensation Amendment Act 2018

16 Certain veterans may elect rules of former scheme: weekly income compensation

(1)

In this clause, former provisions means subsections (6) to (11) of section 65 of this Act as they read immediately before the commencement of this clause.

(2)

This clause applies to a veteran who first became entitled to weekly income compensation—

(a)

under the former provisions; and

(b)

while the veteran was 64 years of age or older but not yet 65 years of age.

(3)

The veteran may make an election under subsection (8) of the former provisions in accordance with subsection (10) of the former provisions, and, if the veteran does so, the former provisions continue to apply to the veteran.

17 Certain veterans may elect rules of former scheme: weekly compensation

(1)

In this clause, former provisions means subsections (6) to (11) of section 104 of this Act as they read immediately before the commencement of this clause.

(2)

This clause applies to a veteran who first became entitled to weekly compensation—

(a)

under the former provisions; and

(b)

while the veteran was 64 years of age or older but not yet 65 years of age.

(3)

The veteran may make an election under subsection (8) of the former provisions in accordance with subsection (10) of the former provisions, and, if the veteran does so, the former provisions continue to apply to the veteran.

18 Certain other dependants may elect rules of former scheme

(1)

In this clause, former provisions means clauses 60(6) to (9) and 61 of Schedule 2 as they read immediately before the commencement of this clause.

(2)

This clause applies to any other dependant who first became entitled to weekly compensation—

(a)

under the former provisions; and

(b)

while the other dependant was 64 years of age or older but not yet 65 years of age.

(3)

The other dependant may make an election under clause 60(8) of the former provisions in accordance with clause 61 of the former provisions, and, if the other dependant does so, the former provisions continue to apply to the other dependant.