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March 11th 2010

ACC Reversing Entitlements

Proposed legislative changes
Reversing entitlements for wilfully self-inflicted injury and suicide

Key Points

•  ACC compensation is not available for people suffering an illness, including a terminal illness, so it is inequitable to provide compensation for those who self-harm because of mental illness.

•  Proposed changes to legislation would mean that ACC no longer provides entitlements (other than treatment) for wilful self-inflicted injury, including suicide, except in limited circumstances.

What is changing?

Proposed changes to legislation would mean that ACC no longer provides entitlements (other than treatment) for wilful self-inflicted injury, including suicide. The only exceptions will be where the injury or suicide resulted from a mental injury covered by the Act; that is:

• a mental injury caused by a physical injury or sexual abuse, or

• a work-related mental injury.

In other circumstances claimants will become ineligible for weekly compensation, survivors grant, funeral grant, vocational rehabilitation, lump sum payments and child care.

Why is it changing?

Providing entitlements for self-inflicted injuries is inconsistent with the principles of the ACC scheme, and expands the scheme beyond what was originally intended.
The ACC Scheme should not provide full entitlements to claimants whose injuries or suicides result from a mental illness that is not covered by the Scheme.

ACC compensation is not available for people suffering an illness, including terminal illness, so it is inequitable to provide compensation for those who self-harm. People who wilfully self-inflict injuries or commit suicide generally do so because of an underlying mental illness. There are other services to assist people with these types of illness.

Providing full entitlements for wilfully self-inflicted injuries could also provide perverse incentives, for example, the terminally ill person who commits suicide (as ACC entitlements are more beneficial) or the freezing worker who deliberately injures themselves to get entitlements during the off season.

How much will it save?

Because of the changes to ACC entitlements for wilfully self-inflicted injury and suicide over the years, costs have increased rapidly from $2 million in 2004/05 to $14 million in 2008/09.

It is difficult to determine the impact of the recent 2008 amendments because only 200 claims were made for suicide, although the Ministry of Health report that 500 people commit suicide each year.

Fully funded savings by 2015 have been estimated at $33 million.

What about existing claimants?

Existing claimants, including dependants of people who have committed suicide, will not be affected by the proposed change.

What has been covered in the past?

Before 2001 people who committed suicide or wilfully injured themselves were covered by ACC but did not receive entitlements except for treatment; only those who suffered from a mental illness as a result of a physical injury or those who suffered a mental injury caused by certain criminal acts received entitlements other than treatment.

In 2001 the test to receive entitlements was changed to allow all people who committed suicide or wilfully injured themselves as a result of a mental injury to receive ACC entitlements other than treatment.

In 2008 disentitlement was removed so that all people who commit suicide or wilfully injure themselves can receive full ACC entitlements.