New ACC Minister says about 12,000 long-term claimants should be back at work

Thursday, 13 February 2025

Andrew Bayly replaced Matt Doocey as ACC Minister last month.

Newly appointed ACC Minister Andrew Bayly says half of the people who have been on ACC for more than a year — about 12,000 people — should be back at work.

Bayly announced details of two reviews of the financially challenged Accident Compensation Corporation on Wednesday, titling the intervention “getting ACC back on track”.

One will look at the state-owned insurer’s operational performance and whether it could improve its case management.

The other will assess how it manages the $50 billion investment fund that it has built up to finance the future cost of current injury claims.

Bayly said there were about 25,000 people who had been on ACC more than a year.

“When I talk to the board and executive team, 7000 will have long term physical disabilities — fine — they should be there.

“There's probably another 5000 who've got issues that would stop them going back to work,” he told The Post.

“There’s probably the balance — you work out the number — 12,000, 13,000, who literally should be back at work.”

Asked to confirm he meant those people were ready to go back to work, Bayly confirmed that was his understanding.

“It might be 10,000, it might be 13,000, but it’s a substantial share of the 25,000 who have been on ACC for more than 12 months.”

Those people were not necessarily deliberately abusing the system, Bayly said.

Instead the failure had been in the management of those claimants, he said.

ACC deputy chief executive Michael Frampton responded guardedly to Bayly’s statement, seven hours after the insurer was asked for comment.

“Some people are staying on the scheme for longer, including a group of people in the long-term claims pool who do not have serious injuries,” he said.

“Of the approximately 24,000 clients currently in the long-term claims pool, we’re proactively engaging with abound 15,000 clients to support their return to work or independence.”

Labour ACC spokesperson Rachel Boyack said Bayly, who replaced former ACC Minister Matt Doocey last month, needed to provide evidence to support his assessment.

“I do appreciate that ACC needs to lift its performance in terms of rehabilitation,” she said.

“But it is not as straightforward as just saying there are thousands of people that could easily return to work. The minister perhaps needs to do a little bit more homework before throwing large numbers around.”

Melissa Smith’s post-birth was so bad she forgot she’d had a baby when she woke from surgery. But mental injuries from trauma births still aren’t automatically covered by ACC.

Doocey also said last year that ACC needed to lift its game but had not told The Post people might be unnecessarily claiming ACC on that scale.

In October, ACC reported an operating deficit of $7.2 billion at the end of June.

That represents the difference between the funds it has invested and its best estimate of the future cost of meeting current claims, and has provided a major financial headache for the Government.

Much of the turnaround from a $911m surplus a year earlier was attributable to a Court of Appeal ruling that ACC said would increase compensation entitlements for sexual abuse victims by an estimated $3.4b.

Bayly acknowledged ACC had no control over some other factors that had contributed to the deficit, such as rising health costs.

ACC acknowledged in December that people receiving weekly compensation from ACC for less than a year were off work for 73 days in June, up from 70 days at the start of its financial year.

Chief executive Megan Main told a select committee in October that a portion of that sum was due to “pressures in the wider health sector”, which are understood to include ACC claimants having to wait longer on average to see specialists.

ACC chairperson Tracey Batten told the Education and Workforce select committee in December that performance had “started to stabilise” in the first five months of its new financial year.

But Bayly said ACC’s performance had “steadily decreased” over the longer time frame of the past 10 years, partly blaming a switch — now being reversed — away from claimants being assigned a dedicated claims manager.

Labour ACC spokesperson Rachel Boyack says Bayly should provide evidence “before throwing large numbers around”.

The operational review announced on Wednesday, budgeted to cost $300,000 and due to be complete by June, would focus on areas where ACC had “direct influence”, such as decisions it actively made on entitlements and cover for claimants, Bayly said.

The other review will focus on ACC’s investment performance.

ACC already reports annually on whether and to what extent its own active investment decisions have added value to its portfolio.

Most years these show ACC outperforming a passive-investment benchmark.

But Bayly suggested there could be room for improvement.

“It's not [about] under performance. It's about whether they could do better.”

The investment review will consider a variety of ACC policies and whether its “investment cost structure and resourcing” was fit for purpose.

The Government is responsible for directly funding the expected future cost of current injury claims from people who are not in work — ACC’s so-called “non-earners account”.

Deputy chief executive Stewart McRobie told a select committee in December that had dropped to only being about 48% pre-funded at the end of June, from being about 84% pre-funded a year prior.

That was largely as a result of the Court of Appeal ruling, most of the liability for which would fall into the non-earners account, he said.

But Bayly suggested the under-funding of the non-workers account had been a longer term issue.

“I am looking at how the Government could deal with the liability issue, but it is more than a two-minute conversation,” he said.