Government considered cutting more than $3b of ACC sex-abuse claims
Friday, 5 December 2025
The Government considered cancelling sexual abuse victims’ entitlements to more than $3 billion of compensation by narrowing the scope of ACC cover, before deciding to shelve that plan.
Labour ACC spokesperson Camilla Belich said she was concerned the work, which spanned three ACC ministers, progressed for more than a year before it was discontinued.
The proposal was kicked off by former minister Matt Doocey and advanced by current minister Scott Simpson, who succeeded Andrew Bayly in February after Bayly’s short stint in the role.
Documents released under the Official Information Act make clear the proposal stemmed from concerns about the financial impact on ACC of a landmark ruling by the Court of Appeal in 2023.
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The so-called “ACC v TN” ruling entitled people who were abused when children to claim compensation for the loss of earnings they experienced as an adult, before they sought treatment.
ACC currently estimates claims flowing from the ruling will contribute about $3.3b to ACC’s total deficit, which is the difference between its investments and the forecast future cost of current claims.
The total deficit stood at $13.8b at the end of June and has been forecast to climb to $17.1b this year.
Doocey advised Cabinet in October last year to axe the entitlements, then estimating the potential savings amounted to $3.6b, the documents show.
The aim then was to have legislation introduced by July this year and passed by April.
Work on terminating the entitlements advanced as far as officials partly drafting an amendment to the Accident Compensation Act and Simpson making a bid in February for a law change to be included in this year’s legislative programme.
The Treasury noted the compensation rights that would have been axed would have included some that stemmed from the abuse that was the subject of the Royal Commission into Abuse in Care.
That meant some victims who suffered abuse in state care would only have been entitled to compensation in the form of “non-financial” support from ACC, such as counselling, and general welfare benefits such as Jobseeker support.
The documents also indicate some of the rights that would have been cancelled would have been axed retrospectively.
The proposal was to back-date the cancellation of compensation for victims’ loss of potential earnings to the time the bill was introduced, rather than when the law was passed by Parliament, to prevent abuse victims rushing through claims before the change took effect.
Treasury supported the bill despite describing it as “highly contentious”, saying ACC compensation was “relatively generous” compared to other forms of social support.
It described the Court of Appeal’s TN ruling as “a prominent example of this”.
Treasury also looked into an alternative option that would have gone further by axing ACC coverage for “mental injuries and/or sensitive claims” altogether. That would have chopped $8.3b off the insurer’s liabilities, it estimated.
Simpson first revealed in May that something of the sort might be considered when he told The Post that it was a “live and current” question whether the Government might make changes that meant claims that arose from the Court of Appeal ruling weren’t funded through ACC.
ACC might need to play a smaller role compensating people for some ills to get its finances under control, he said then, also questioning whether it was the right vehicle to support people who had experienced mental health issues more generally.
But during a select committee hearing this week, Simpson said ACC “does a pretty good job of addressing those sorts of issues”.
The documents released under the OIA show he deprioritised the Accident Compensation Amendment Bill in July, advising officials it was “no longer intended to proceed”, but do not reveal who called a halt to the work, or why.
Labour’s Belich said she suspected one of the reasons the Government had second thoughts was the backlash it had experienced over the cancellation of pay equity claims, which she described as a “significant attack on women”.
“It’s concerning to see how far this went. Maybe they made a political decision that this wasn't something that they wanted to follow through with.”
Simpson would say only “the Government decided not to proceed with this legislation to prioritise other work”.
Despite the re-think, the documents imply ACC may have dragged the chain following through on the TN ruling, at least until recently.
Advice provided by Treasury to Finance Minister Nicola Willis in June stated that in the absence of plans to change the law, ACC intended to “start fully implementing the TN decision” from September this year, thereby implying it had not done so beforehand.
Full implementation might involve ACC “making proactive attempts, with support from the mental health sector, to contact claimants that are likely to be eligible for financial entitlements,” Treasury told Willis.
ACC head of client recovery Matthew Goodger told The Post last night ACC had chosen not to pro-actively contact any client with an inactive sensitive claim, but indicated the motivation was not to save money.
“We know that clients can be triggered by contact from ACC relating to a sensitive claim if they were not expecting it, and they may not have a therapy provider who can support them,” he said.