ACC reforms
November 6th, 2010 at 11:03 am by David FarrarSimon Collins reports in the Herald:
The proposal follows a law change this year giving ACC the power to vary levies on employers in line with their accident records.
This system, known as “experience rating”, will take effect for employers next April.
The ACC’s consultation document suggests extending the same principle to levies on motorists and income-tax payers or “earners”.
An employee on the average income of about $50,000 a year will pay more than $1300 in ACC levies this financial year.
That is 2.6% or gross income or around 3.5% of after tax income, which is a huge cost.
The ACC document suggests that motorists’ levies, paid through vehicle licence fees to compensate road accident victims, could be increased for people who get many traffic tickets and for younger drivers, and reduced for people such as pensioners with good safety records.
Yes, absolutely. That retains the insurance component of the scheme, but provides incentives for safer drivers. Why should a 65 year old with a 45 year perfect driving record pay the same as a new driver who has already been involved in an accident and has several speeding tickets.
For earners, who now pay a 2 per cent income tax surcharge to compensate working people injured outside workplaces and roads, the corporation suggests a no-claims discount for people with no injury claims in the past five years, offset by higher levies for those with more injuries, such as many sports players.
Please. I don’t think I have had an ACC claim for well over 20 years. Of course my employee levy is modest compared to the employer levy.
It also suggests an option to pay a lower levy in exchange for reduced benefits, and poses three questions:
“Would you prefer to pay lower ACC levies in return for a 10 per cent drop in compensation for lost income after a less serious injury, such as a sprained ankle?”
Yes.
“Would you prefer to pay lower ACC levies in return for a longer wait period. For example, extending the period without lost income compensation from a week to a longer period, such as three weeks?”
Yes.
“Would you prefer us to lower the earners’ levy in return for earners paying more of their accident-related treatment costs?”
Depends on the details of the trade off, but certainly keen to at least have the option so people can choose for themselves what best suits them.
Dr Smith said there would be problems in adopting ACC’s proposals for motorists and sports players.
Young drivers could register their cars in their grandparents’ names, and he did not want to harm the “broader social benefits” of sport.
I’m not sure the level of avoidance would be great. Agree you do not want to put people off sport, but I think the cost of ACC is not a major factor in decisions on sport.
November 6th, 2010 at 11:19 am
You do get a smll trade off, with the disincentive to play sport lowering ACC costs but increasing long term health costs with young people being more sedentary. You also get a headache for employers trying to work out what levy to deduct from an employees wages.
Vote:November 6th, 2010 at 11:20 am
DPF…
Put aside all the supposed benefits of ACC.
The ACC is a crock.
Woodhouse was a low grade Napier conveyancer, promoted above his intellectual (not to mention legal) ability.
He was a “progressive” solicitor (not worthy of accolade of Justice”.
George Gair, and his “Select Committee”, said “Yes sir, No sir, Three bags full, sir”.
We have all been paying for this rubbish scheme, no matter accident record et al.
In many respects it is all like Obama-care, but worse it is here.
Will it change?
NO
Vote:Because we do not have a “Tea Party” with National.
November 6th, 2010 at 11:22 am
The same logic could apply to people who have constant sports injuries while claiming they have good “health”. I think the “health” benefits of sport need to be weighed against injuries. Having constant injuries is not good health.
Vote:November 6th, 2010 at 11:23 am
Excellent reforms and consistant with most other insurance policies I have, including Life insureance and Health (non-smoker and watch weight), Vehicle – no accident for over 18 years, House home and contents (alarmed and secure premises).
Now wait for Labour with their predictable response about “privatising ACC” and helping the rich and robbing the poor.
Vote:November 6th, 2010 at 11:29 am
People who engage in excessive exercise placing their bodies under constant strain are NOT healthy people.
Vote:November 6th, 2010 at 11:35 am
TVB …..
Vote:In my experience health practitioners encourage their patients to subscribe to “sports” injuries.
True? Debateable ? May be, may be not.
In this day and age EVERY professional (or semi) sports participant has an insurance policy that covers ALL injuries. It is our polloies (and the CTU) that insist on picking up a share of the cost.
Insurane to pros is a business expense. We should not be compelled to pay that impost.
November 6th, 2010 at 11:46 am
You cannot consider ACC unless you consider what would happen if it wasn’t there. What it does is prevent tortious litigation for personal injury by accident. That’s why we don’t unlike the US and Canada have ambulance-chasing lawyers. So how do you deal with those cases, if we don’t have ACC? Bill Hodge lectured at a US university before he came here and he said once his law students were really keen on ACC in their first year but by their fourth year they’d changed their minds because by then they’d realised how much business they’d lose. On the other hand the Auckland Law School library had a Free Palestine sticker on the stairwell wall so draw your own conclusions from the contrast between them and us. Personally I often thought of putting a ‘I [heart] Maggie and Ronald’ right next to it but no-one could reach it. The lefties must have used a broom handle…
Vote:November 6th, 2010 at 12:00 pm
The thing that annoys the heck out of me with ACC road-user levies is that even though I only use my car to get around on weekends I have to pay just as much levy as part of my licensing fee as someone who does 40,000 km a year.
Why on earth is there a fixed charge for this? Surely the more you drive the greater your chances of having an accident and therefore the more you should pay? I say get rid of the ACC levy from registrations and add it fully on to petrol costs – I feel sorry for the pensioner who uses their car once a week to get the groceries but still have to pay an exorbitant yearly licensing fee.
Vote:November 6th, 2010 at 12:06 pm
Yes Reid…
The miners did chop their fingers off, one by one, to get compensation. The cost, including those of specialist legal firms, was ultimately borne by coal consumers.
But why should I pay for that?
The problem you highlight is exactly the problem with US Healthcare reform. Lawyers (after unions) are the single largest source of the demos ‘ funding.
The other issue is “young nicky smith”. You expect me to have confidence in him? He is an ETS idiot.
Vote:John Judge, if his his advice is not filtered thru Cabinet ? May be. But then he has also to give advice within the parameters of a skewed Act.
November 6th, 2010 at 12:26 pm
“The miners did chop their fingers off, one by one, to get compensation.”
I doubt the craze will or did spread very far, flipper. They don’t seem to grow back, you see.
Yeah the US health system is totally fucked. Medical salaries in the western world are a perfect example of supply and demand, where the necessary nature of the demand has driven rewards crazy. You also see it in CEO and executive salaries as well. Rewarding short-term share price movement at the expense of long term strategic benefit is another shortcoming another issue is the way people in the money trade make profits out of doing nothing more productive than mere number shuffling on the back of a vital service, world financial transacting.
All of those issues are examples where the economic laissez-faire practices don’t work to the benefit of the customers but rather to the benefit of the suppliers. It’s a shame and difficult to see what to do about it.
Vote:November 6th, 2010 at 12:44 pm
Speak for yourself jarbury. I’ve been a high mileage driver since I got my first Sales Rep job in the UK 17 years ago. I’ve had my share of tickets in that time, but have never been involved in an accident.
Vote:November 6th, 2010 at 12:51 pm
I don’t see why road licensing fees are any different from insurance either, in that the worst drivers should in fact pay the most.
What’s wrong with that? Why do they make us all pay the same?
Vote:November 6th, 2010 at 12:51 pm
Why should a 65 year old with a 45 year perfect driving record pay the same as a new driver who has already been involved in an accident and has several speeding tickets.
Because more often than not the 65YO with a perfect driving record has caused more accidents (and most of those speeding tickets) by their slow, inconsiderate and piss poor driving than a whole phalanx of boy racers.
Vote:November 6th, 2010 at 1:34 pm
MT_Tinman What a load of rubbish,It is commonsense to add it to the cost of petrol
Vote:November 6th, 2010 at 2:12 pm
ACC has timed all its communications on this to come on Fridays so the fewest amount of people can be involved in the process. Consultation started 1 October, finished 29 October – both Fridays. Also attribution of relevant claims has to happen from 2007. I wonder if ACC has started attribution of claims with the relevant experience rating details, if not, they have a hell of a lot of work to do to get this right. If they dont get this right the premium settings will be out of whack – as they were when experience rating was ditched several years ago
Vote:November 6th, 2010 at 2:24 pm
That’s how flipper got his name.
Vote:November 6th, 2010 at 2:40 pm
VOTE BUYING!!
Has anyone ever been in the passenger seat with some over 70 at the wheel?! They’ve got poor vision, poor proprioception and poor reflexes – no amount of experience makes up for these deficits. They’re also more likely to get muddled and confused after a minor accident and be brought to hospital for investigation. In a moderate accident they’re more likely to break a bone, and will take much longer to recover.
Fair enough if it’s personal speed ticket reference that affects your ACC vehicle licence (although this would likely cost more to administer than it would save), but to pick on people just because they are young? Why should a well-behaved 18 year old pay more because there are some others of similar age who are bad drivers?
I see so many arrogant 40-year old businessmen driving large 4WDs, Falcons and Commodores who don’t indicate, speed, enter the wrong lane, and otherwise act like cocks. (I am living in Auckland at the moment).
If you’re going to discriminate against age, why not do it against race? What are the race-based crash statistics? What about by BMI? What about by size-of-hometown?
Vote:November 6th, 2010 at 2:41 pm
Is anyone else incredulous that both ACC charges and compensation are matters for public debate? Surely, this is an industry crying out for a bit more competition so we can make our own decisions about how much of both we want. When is a Government going to have the nous to get tough and sort out the mess that is our healthcare system to give people more choice?
Vote:November 6th, 2010 at 2:55 pm
Smith has to provide some detail before it will be clear whether there is any benefit in what he has proposed. Sounds like a move to reduce cover and that current standard cover will be far to expensive for the average punter which will acheive the governments earlier aims of reducing the liability faced by govt over acc. Not necessarily a bad thing if there is a real drop in premiums. Unfortunately its is more likely to be less cover for the same cost.
Vote:November 6th, 2010 at 3:00 pm
Have just paid levy on behalf of a family member who is a sole trader (handyman). Taxable earnings to 31 March 2010 just under $50k. ACC levy just over $3k. Not including vehicle component. No claims ever (10 years). That is a huge percentage – 6% – of a not very high income. I suppose being a handyman is a more than averagely risky occupation, in theory, but still … Competition – yes please!
PS I know a tradie who injured himself absolutely deliberately to go on ACC for a month or two. Worked well, except that he cut something critical in his leg and ended up having to have several operations and a couple of years off work. Not that he minded, lazy sod.
Vote:November 6th, 2010 at 3:01 pm
Mark, why on earth should we care about Nick Smith providing some detail? Why not just expose ACC to a bit of competition and let healthcare users like you and me decide how much care we want and at what premium?
Vote:November 6th, 2010 at 3:06 pm
Artemisia, I am sure your tradesman friend is merely the tip of the iceburg. Surely there are many rorting ACC for all it’s worth. It is little wonder the Government is having trouble with its finances, regrettably for us, NZ taxpayers.
Vote:November 6th, 2010 at 3:09 pm
A co-payment would be useful – would cut down on some of the people receiving excessive treatment.
Ideally I’d be able to pick an accident insurance policy that:
1. Had a no claims bonus
2. Only insured me after 3-4 weeks off work (my sick leave or annual leave covers most of that anyway)
3. Had an excess/co-payment
I’d guess a policy like this should cost about half what I currently pay in ACC – same way that a car insurance policy with an excess of $1000 costs way less, as all the small stuff doesn’t get claimed any more.
Vote:November 6th, 2010 at 3:14 pm
PaulL, wouldn’t an easy way to get the features you say you’d like be to expose ACC to some competition?
Vote:November 6th, 2010 at 3:28 pm
I am all for some changes having just got my huge levy. I guess I could injure myself falling off the office chair but it’s unlikely and I have a clean bill of health in every other respect.
Vote:I choose high excesses on all my other insurances to get substantially lower premiums and also appreciate no-claims benefits but no choice with ACC and I resent paying for rugby players and netballers and drunks.
ACC, like all monopolies, has become a monster and was right royally rorted by physios, counsellors etc under Labour’s lax governance.
I would cut it back to being workers’ and motorists’ compo and exclude injuries from sports, burglaries etc. Lean and mean.
That said, I have found them to be excellent to deal with and totally agreed when they rejected a family member’s hip op on the grounds it was medical not accidental despite the doctor’s fabrications.
November 6th, 2010 at 3:35 pm
mjwilnz: yes. Of course, if that were possible, then I’d just become self insured. I have very few accidents, and very rarely do they cost much. What I’d save over the next 20 years would more than be enough for treatment of any likely injury. And if I never get an injury – all profit.
Vote:November 6th, 2010 at 3:36 pm
Good stuff, BeaB. Do I take it you support more competition for ACC, too?
Vote:November 6th, 2010 at 3:39 pm
PaulL, I agree. How wonderful it would be if we’d had such choice, eh? Of course, it won’t ever be a perfect world, but one improved a little from the status quo, at least.
Vote:November 6th, 2010 at 3:41 pm
What is Key waiting to open ACC up to competition? Why is he waiting for the deranged Nick Smith to take the lead on this matter?
NZ is bereft of leaders. We are left with neo-socialist clowns who grin to the photographers and imbeciles passing as ministers of the Crown.
Vote:November 6th, 2010 at 3:49 pm
Manolo, don’t you think Key is hesitant because competition is viewed poorly by many New Zealanders? If so, do you think there’s a role for people who do view competition positively to stand up and say so? Maybe that would help to ease people’s concerns about competition and make reforms that promote competition to be palatable, politically. NZ is hardly bereft of leaders, but right now we have a bunch who do look carefully for support from their “followers”. Might it not be time for our followers to stand up and lead a bit more?
Vote:November 6th, 2010 at 4:47 pm
“.. don’t you think Key is hesitant because competition is viewed poorly by many New Zealanders?”
If so it would be the result of many years’ indoctrination and a sad admission there is little future for private enterprise in our country. I do not believe this to be the case.
What we have is a good sector of the population hooked on benefits, handouts, and all types of welfare. People unable to think for themselves, utmost ignorant on personal responsibility matters, morons who think the state is obliged to offer them cradle to grave assistance.
The socialist mindset must be reverted, otherwise we would be (already are) on our way to become a banana republic.
Vote:November 6th, 2010 at 5:23 pm
Manolo, there is still hope. I’m not sure I agree mindsets need reversion, but I do believe certain mindsets could do with a change! Change comes when people stand up to be counted. In that sense, there is definitely still hope!
Vote:November 6th, 2010 at 7:27 pm
One of my main reasons for voting National was an email reply I received from Pansy Wong in the lead up to the last election. I asked directly if opening ACC up to competition was still National Party policy. The answer was absoulutely, yes. I am gutted with the garbage in the Herald today from Nick Smith:
But he (Smith) poured cold water on speculation that workplace accident insurance might be opened up to full competition from private insurers after an ACC “stocktake” completed in June by a group led by former Labour Party Finance Minister DavidCaygill. Its report has not been made public.
Dr Smith said opening the business to competition would be “a very major decision and, consistent with the John Key pragmatism and cautiousness, we are not in any hurry”.
Between this and the ETS scam, Smith is the Minister of Crap.
WTF happened to National Party policy????
Vote:November 7th, 2010 at 12:17 am
Those are nice questions the ACC is asking. But how about asking about the elephant in the room:
“Would you prefer to have the choice of shopping around for workplace insurance to find the combination of premiums and payments that suits you?”
The utter madness of collectivising insurance is that nobody is made happy.
Vote:November 7th, 2010 at 7:24 am
Nick Smith does not reply to his emails.
In 2009 I had a neck injury which resulted ib fusion of 2 vertabrae, should have been 3. ACC declined further surgery claiming degeneration. I was thrown on the scrap heap, unable to work and had no income for 6 months. Emails to Nick Smith and Pansy Wong resulted in nothing other than ‘the case is under review so inapropiate to comment’
Come on you clowns. If I have another spinal injury I will be declined ACC on the grounds of degeneration, yet I still have to pay the same compusary premiums as everyone.
Now is your chance Nick, reply to your emails instead of being yet another useless Polititian
Vote:November 7th, 2010 at 5:29 pm
Are you people deranged, privatizing ACC or private insurance will cost you more . Insurance companies are business that make money, they are not charities, they don’t give a rats ass about you, all they care about is the bottom line, so pull your heads out of the sand and have a look around the world and you will see that if ACC is privatized we will end up paying more on average for the service we get now, not to mention the Lawyers will be rubbing there hands together in glee, no it’s not perfect but it’s better than most and a lot better than private insurance.
Vote:November 8th, 2010 at 1:03 am
It needs to be opened up to competition to see if we’re getting value for money…
What happened to National doing that..? Or have they just given up and are so spineless we might as well have Clark back..?
Vote:November 8th, 2010 at 10:23 am
if you’re going to make car ACC levies based on driver history – which driver? The registration (which includes the ACC component) is done by the OWNER. That’s not necessarily the driver. E.g. family car with many drivers, company car with many drivers etc. Which driver’s license do you check when calculating the ACC levy?
As for sprts injuries don’t get me started. I’ve an employee been off work 2 months/yr for the last 3 years from weekend rugby injuries. We have to cover for him. I don’t understand why sport is covered. Or it should be clear that ACC isn’t just for workplace injuries, and the net should be widened – e.g. get a fee from sports clubs etc and charge the players. But then we’d never win the world cup.
Vote: