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New Zealand Government
November 30, 2000
Injury Prevention And Rehabilitation Bill
Press Release:
General
Policy Statement
Overview
This Bill continues the government‘s commitment to a fair and sustainable
scheme for reducing personal injury. The government has taken a two-phase
approach to this reform. The first phase was to reintroduce ACC as the sole
provider of cover for workplace accidents. Government passed legislation in
March 2000 to remove competition; return responsibility for workplace
accident cover to the Accident Compensation Corporation (ACC); and introduce
programmes that provide incentives for employers to improve their approach to
injury prevention and claims management.
The Injury Prevention and Rehabilitation Bill is the next phase of the
government’s strategy. 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 for managing personal injury that has as its
overriding goals minimising both the overall incidence of injury in the
community and the impact of injury on the community (including economic,
social and personal costs).
In order to achieve these goals, ACC and the scheme must focus on prevention,
rehabilitation and compensation, in that order. The Bill makes clear that the
primary role of ACC and the scheme must be to focus on injury prevention and
reducing the incidence and severity of personal injury. In those instances
where injuries do occur, the focus will be on rehabilitating claimants to the
maximum practicable extent, and facilitating, where possible, a sustainable
return to work and independence as soon as possible. While rehabilitation
occurs, claimants will receive fair compensation for loss of earnings from
injury.
The Bill maintains and enhances the entitlements available to claimants. It
provides for an ACC that delivers a high standard of service to claimants and
premium payers; is responsive in its injury prevention and claims management
strategies; works closely with other agencies in the broad injury management
sector; and is accountable for its performance and outcomes. The Bill also
retains full funding of Accounts and other mechanisms to ensure premium
stability and prudent scheme management, so that premium payers and tax
payers can feel confident about the financial future of the scheme.
The Bill, while addressing the most important priorities for government, does
not address all of the items on the injury management reform agenda. The
scheme will be kept under review, and further changes and amendments made as
the improved performance of the scheme and the economy allows.
Summary
of Key Changes
In addition to maintaining current entitlements and other provisions, the
Injury Prevention and Rehabilitation Bill contains a number of new features
that are intended to achieve the objectives set out above.
Injury
Prevention as a Primary Function of ACC
The Injury Prevention and Rehabilitation Bill establishes injury prevention
as a primary function of ACC to promote measures to reduce the incidence and
severity of personal injury. The Bill provides a framework for ACC and the
government to set the level and scope of injury prevention activities to be
provided by ACC. The costs of these activities are to be met through being
charged to the Account(s) where the reduction in premiums or other
expenditure is expected to occur; through sponsorship or joint ventures; or,
where the savings accrue to the community more indirectly, through funding by
appropriation.
Management
of Injury-Related Information
The development and monitoring of well co-ordinated injury prevention strategies
requires 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,
to facilitate data collection, aggregation, analysis and dissemination, for
such purposes as improving research, policy development, and monitoring of
agencies’ effectiveness. The Bill provides for the establishment of an
‘information manager’, to be appointed by the Prime Minister. The manager may
perform functions such as setting standards for the collection of and access
to data across the different agencies operating in the injury prevention
sector; and can require, consistent with the provisions of the Privacy Act
1993, government agencies to provide relevant information.
Rehabilitation
Principle
The Injury Prevention and Rehabilitation Bill specifies a new rehabilitation
principle; namely that rehabilitation is to be provided by the Corporation to
restore the claimant’s health, independence and participation to the maximum
extent practicable. In deciding what is ‘practicable’, the Corporation is
required to take into account a variety of relevant factors, such as the
nature and consequence of the injury, the achievement of rehabilitation
outcomes, availability of other forms of rehabilitation, cost, and
cost-effectiveness. The new rehabilitation objective is reflected in the
objectives for treatment entitlements and the different forms of
rehabilitation. Schedule 1 (which sets out entitlements) has been structured
along these principles.
Lump
Sum Entitlements
The Bill provides for a lump sum payment for permanent impairment. The intent
of this change is to provide fairer compensation for those who, through impairment,
suffer non-economic loss. This includes both physical impairment and mental
injury (caused by a physical injury or sexual abuse). The lump sum provision
has the following features:
assessment using American Medical
Association (AMA) guides and/or other guides as may be specified in
regulations
assessment based on whole person
impairment
a minimum impairment threshold of 10%,
with the maximum payable for 80% impairment
a minimum payment of $2,500 and a
maximum of $100,000
annual adjustments according to the
CPI
calibrated so that more seriously
injured claimants receive proportionately more than less seriously injured
claimants
assessed when the claimant’s condition
has stabilised, or after 2 years, whichever occurs first
lump sums will only be available to
claimants who sustain injuries after the Act’s implementation date, and the
assessment of impairment will be based only on injuries that take place after
the Act’s implementation date
lump sums will replace the
Independence Allowance. However, the Independence Allowance will continue to
be available to people who sustained an injury prior to the Act’s
implementation date, but who lodge a claim after the implementation date.
More
Flexible Assessment of Loss of Earnings
When calculating a person’s entitlement to weekly compensation (which is
based on previous earnings), any period during which the person was on weekly
compensation or significant periods of unpaid sick leave will, under the
Bill, be excluded from the earnings calculation. In addition, any employee
who is injured while in receipt of weekly compensation will continue to
receive compensation at least at the same level as for their prior injury.
The Bill also addresses a number of anomalies with respect to extending
earner status in certain circumstances (and hence entitlement to weekly
compensation) to seasonal workers and people injured while on unpaid parental
leave. The intent of these changes is not to introduce a significant change
to entitlements, but to provide a fairer and more certain way of determining
compensation, which better reflects a claimant’s ‘normal’ earnings pattern.
New
Formula for Setting Minimum level of Weekly Compensation
The Bill provides a more fair and transparent mechanism for setting the
minimum level of weekly compensation payable to potential earners and
full-time earners. The rate will be set at the higher of the relevant
Invalid’s Benefit rate or 80% of the relevant minimum wage. The intent of
this change is to ensure that minimum compensation rates remain at least no
less than the relevant Invalid’s Benefit rate.
More
Flexible Products for Self-Employed
The AI Amendment Act 2000 provided for the self-employed to purchase a
guaranteed level of compensation. This level of compensation is payable
irrespective of any subsequent earnings (and is priced accordingly). The
Injury Prevention and Rehabilitation Bill provides for the development of a
more flexible product or products for the self-employed, that allows
self-employed people to specify the package of weekly compensation best
suited to their needs and price range.
Premium
Payment Provisions
The Injury Prevention and Rehabilitation Bill provides for more simplified
regulations with respect to premium payment procedures, by incorporating a
number of provisions that were previously set out in regulations within the
Bill. The Bill also allows for premiums to be paid by instalments (with an
administration fee charged), and amends the interest and debt provisions,
with the objective of encouraging timely collection.
Code
of ACC Claimants’ Rights
The Injury Prevention and Rehabilitation Bill provides for the development,
through a formal process of wide public consultation, of a Code of ACC
Claimants’ Rights, to be approved by the Minister. The Code will apply to all
ACC activities that entail contact with claimants. Its purpose is to confer
rights on claimants and obligations on ACC, in relation to the way that ACC
should conduct itself when dealing with claimants. The Code will define what
constitutes a breach; provide a basis for enforcement mechanisms and
remedies; and include indicators relating to ACC performance, which will be
monitored as part of ACC’s accountability processes. ACC must also make the
Code accessible and promote awareness of its provisions.
Disclosure
of Information
The Bill includes two new information disclosure provisions, with the
objective of improving injury prevention. Firstly, the Bill enables ACC to
provide information to the Department of Child, Youth and Family Services,
for the purposes of preventing injury arising through unlawful activity.
Secondly, the Bill requires ACC to report each incident of medical error, and
provides discretion for ACC to 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.
Clarification
of Cover Criteria
The Injury Prevention and Rehabilitation Bill clarifies that accidents due to
‘gravity’ will be covered.
Protection
for Claimants Injured under Previous Acts
The Bill contains transitional provisions that ensure that people who
received entitlements under previous Acts, and remain eligible, continue to
receive such entitlements. The Bill also maintains a number of provisions
relating to the regulatory regime for the private market. The intent of these
provisions is to ensure that the entitlements of claimants injured under
previous Acts, including during the twelve months covered by private
insurers, are protected where appropriate.
Schedule
of Occupational Diseases
The Bill modernises the list of occupational diseases, set out in Schedule 2.
The list sets out those diseases which, if suffered by someone employed in
work which involves exposure to such risks, are defined as constituting a
work-related injury
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