Injury Prevention, Rehabilitation & Compensation Amendment Bill - Submission to the Transport and Industrial Relations Committee [2009] NZHRCSub 13 (26 November 2009)

Last Updated: 29 April 2015

Submission by the

Human Rights Commission

INJURY PREVENTION, REHABILITATION & COMPENSATION AMENDMENT BILL



Transport and Industrial Relations Committee

26 November 2009

Sylvia Bell

Principal Legal and Policy Analyst

Phone [phone]

1. INTRODUCTION

1.1 This submission is made by the Human Rights Commission (the Commission)¹ .

1.2 The Commission has responsibility for protecting human rights in New Zealand in accordance with the United Nations Covenants and Conventions² . The right to work is a fundamental human right that is established in international law and underpins the realisation of many other human rights. The International Covenant on Economic Social and Cultural Rights (ICESCR) contains the most comprehensive provisions on the right to work and covers the opportunity to work, free choice of employment, just and favourable conditions of work and non–discrimination³ .

1.3 The ICESCR is further strengthened by the eight core International Labour Organisation (ILO) Conventions including ILO Conventions 100 and 111 that ban workplace discrimination⁴ . Non-discrimination and equal treatment are also central to the implementation of all the major international human rights instruments⁵ .

1.4 Domestically, both the New Zealand Bill of Rights Act 1990 (BORA) and the Human Rights Act 1993 (HRA) make it unlawful to discriminate on certain grounds - including disability, age and employment status⁶ . An amendment in 2001 extended the Act to the public sector and allowed complaints to be made about discriminatory legislation.

¹ In analysing and commenting on legislation the Commission adopts a human rights approach which stresses the moral importance of the interests at stake and recognises (among other things) the need for accountability, participation, non-discrimination and the link with agreed human rights norms: Human Rights Commission, Human Rights in New Zealand Today: Nga Tika Tangata o Te Motu (2004) at 25

² Long title to the Human Rights Act 1993

³ _{Articles 6 – 8 ICESCR}

⁴ _{The others are Conventions 29 and 105 which ban forced labour and slavery, Conventions 87 and}

98 which require countries to allow freedom of association and collective bargaining and Conventions 138 and 182 which set a minimum working age and ban the worst forms of slave labour.

5. See, for example, Art.(2)(1) International Covenant on Civil and Political Rights; Art.2(2) ICESCR; Art.1(1) International Convention on the Elimination of All Forms of Racial

Discrimination; Art.2 International Convention on the Elimination of All Forms of

Discrimination Against Women.

⁶ Employment status is defined as being unemployed or the recipient of a benefit under the Social

Security Act 1964 or an entitlement under the Injury Prevention Rehabilitation and Compensation

Act 2001: s.21(1)(l) HRA 1993

1.5 Since the Amendment came into force, the Commission has received a significant

number of complaints relating to the Injury Prevention, Rehabilitation and Compensation Act 2001 (IPRC Act)⁷ . Many relate to the cessation of earnings related compensation when a recipient becomes entitled to New Zealand Superannuation. Others have involved concern at the age at which vocational rehabilitation ceased, the manner in which entitlement to compensation for recently self employed people was calculated, the treatment of sensitive claims and the disparity between ACC benefits and ordinary sickness benefits. Some of the issues that were the subject of complaint were addressed

by the 2008 amendment to the Injury Prevention, Rehabilitation and Compensation Act.

1.6 The Commission supported the 2008 amendment and considers that some of the gains made will be lost if the Bill is enacted in its present form, particularly those designed to “reduce entitlement at the margin”⁸ .

2. SUMMARY OF THE COMMISSION’S POSITION

2.1 The Accident Compensation scheme (ACC) has been described as a social contract whereby New Zealanders gave up the right to sue for personal injury in return for universal, comprehensive, and adequate no-fault cover. The previous “fault” system allowed a person who had suffered loss to sue to recover lost income in full. This right, the enforcement of which was described as a “forensic lottery”, was surrendered by the community in exchange for guaranteed universal compensation. Universal compensation

is the basis of the social contract that the Scheme represents. Human rights therefore lie at its very heart.

2.2 The consensus reflected in the Accident Compensation Act 1972 was a significant achievement of the National government of the day. The legislation was designed to ensure that everyone had access to basic compensation when they needed it. While the Commission recognises that there are difficulties in implementing the scheme in a truly

7. An analysis earlier this year indicated that the Commission receives an average of 123 complaints a year about ACC. At least two have progressed to litigation: Trevethick v Ministry of Health [2008] NZHC 415; (2008) 8 HRNZ 485 and Howard v Attorney-General (No.3) (2008) 8 HRNZ 378

⁸ Recommendation of the Ministerial Working Party on the Accident Compensation Corporation

and Incapacity in Accident Compensation: A Fairer Scheme (1991)

equitable fashion, it is concerned that the delicate balance that the legislation represents could be undermined if the basic principles on which it is based are subverted.

2.3 The driving issue behind this Bill appears to be a narrowly defined notion of cost containment - which would be more appropriately characterised as cost shifting - yet the changes it introduces have the potential to derogate from basic human rights principles relating to rehabilitation. The changes also appear to discriminate against low paid workers (including part timers and seasonal workers) and erode processes designed to monitor and advise on the prevention of injury.

2.4 The Commission also notes that the cost implications of some of the changes proposed in this Bill – for example the decision to transfer costs to other government agencies such as health and social welfare – do not appear to have been fully considered. The Treasury Regulatory Impact Analysis Team considers that the Bill does not meet the Regulatory Impact Statement requirements as it does not contain the necessary information and analysis of areas such as administrative and compliance costs, if experience rating and

risk sharing are re-introduced to the ACC Work Account.

2.5 The Bill represents a major reform that could undermine the concept of ACC as it is currently understood. The process has been rushed and there has been little time for public consultation - in sharp contrast to the extensive consultation the National government undertook before the scheme was introduced.

2.6 The Commission recommends deferring the Bill until the Steering Group on ACC chaired by David Caygill reports next year. This would allow greater consultation on the implications of what is proposed and provide an opportunity to reach agreement on how costs should be contained – if indeed, it is necessary.

2.7 The Commission’s submission addresses the following aspects of the Bill:

• reducing potential weekly earnings for young people to 80% of minimum weekly wage;

• reinstating the former approach to calculating long-term compensation for non- permanent employees;

• reinstating weekly compensation to minimum weekly earning rate after five weeks

(rather than two);

• increasing the threshold at which the Act will apply in cases of injury related hearing loss;

• reducing the vocational independence threshold from 35 to 30 hours a week;

• making it optional for assessors to consider pre-incapacity earnings when undertaking vocational independence assessments;

• removal of the Ministerial advisory panels;

• limiting compensation for self-inflicted injury and suicide;

• denying access to claimants for whom it would be repugnant to justice to provide entitlement; and

• regulation of access to cover for “sensitive claims”.

3. REDUCTION OF POTENTIAL WEEKLY EARNINGS FOR YOUNG PEOPLE TO 80% OF THE MINIMUM WAGE: CLAUSE 47, SCHEDULE 1

3.1 The Bill reduces compensation for loss of potential earnings to 80% of the minimum wage in situations where young people under 18 have been incapacitated before they have been able to work or while they are in full time study that commenced before they turned 18 and continued until they were injured. They must have been incapacitated for more than 6 months.

3.2 Currently this is paid at 100% of the minimum weekly wage. The 2008 amendment increased the level from 80% of the minimum wage as it was considered not to reflect an average life-long pattern of earnings⁹ . The Regulatory Impact Statement notes that less than 300 claimants receive this type of compensation, all are under 35 and 67% have

⁹ Injury Prevention, Rehabilitation and Compensation Amendment Bill (No.2) 2007: Explanatory

Note at 4

serious spinal or brain injuries which means that they will most likely remain on compensation for the rest of their lives¹⁰ .

3.3 The difficulty is that under the Bill people in this position will continue to receive 80% of the minimum wage for the entire time that they are in receipt of the benefit as there is no provision for this to increase after a certain time (as is the case, for example, with low income employees). As the precipitating factor is their age, this appears to be prima facie discrimination.

3.4 In order to sustain an allegation of discrimination, the discrimination must not be able to be justified under s.5 of the Bill of Rights. To meet the requirements of s.5, any limit on a right must:

 serve a sufficiently important objective;

 be rationally connected to that objective;

 achieve the objective in a (reasonably) minimally impairing manner; and

 be proportionate in effect, in that the social benefits of the limit outweigh the harm done to the right¹¹ .

While it could be argued that the first three limbs of this test are satisfied, the restriction is not proportionate in terms of the effect on the recipients. They are condemned to live on a lower benefit – possibly for the rest of their lives – simply because they were injured before they reached a particular age.

3.5 The Commission therefore considers that what is proposed, amounts to discrimination that cannot be justified in terms of the Bill of Rights.

The Commission recommends that the weekly rate for the loss of potential earnings remains the equivalent of the minimum wage.

10. This group is also entitled (among other things) to social and vocational rehabilitation and lump sum grants

¹¹ R v Hansen [2007] 3 NZLR 1

4. REINSTATING THE FORMER APPROACH TO CALCULATING LONG TERM COMPENSATION FOR NON-PERMANENT EMPLOYEES: CLAUSES 33 TO 44

SCHEDULE 1

4.1 The calculation of loss of earnings for part-time or casual workers who have been off work for more than four weeks will be their average income over the preceding twelve months, not what they were earning at the time they were injured. This reverses the changes made by the 2008 amendment relating to part time workers.

4.2 Over the years the Commission has received complaints from seasonal workers unable to claim adequate benefits from a variety of sources - including ACC. Many of these people are migrant workers and it is at least arguable that what is proposed amounts to indirect discrimination on the ground of national origin.

4.3 The Regulatory Impact Statement admits that the effect of the change proposed in the Bill will achieve a levy reduction of $13 million but that it will also reduce weekly compensation for some casual workers¹² . To reduce compensation for seasonal and part- time workers is to effectively penalise one of the more vulnerable groups in society and one that is most in need of state support through a period of injury and rehabilitation

since they are least likely to have savings to fall back on. Their already precarious position demands greater protection rather than less.

The Commission recommends retaining the present formula in clause 34 of

Schedule 1 for calculating compensation for non-permanent workers.

5. REINSTATING WEEKLY COMPENSATION TO MINIMUM WEEKLY EARNING RATE AFTER FIVE WEEKS: CLAUSE 42, SCHEDULE 1

5.1 The Bill will also amend the period that a low income employee must wait to have their weekly compensation increased to the minimum weekly rate. At present they are entitled to the increase after the second week of incapacity. Under the Bill this will increase to the fifth week of incapacity.

12. The present move is similar to that in the 1990s where employer pressure led to attempts to reduce levies. St John, S Retirement Policy Research Centre, University of Auckland The Rationale for Pre-funding ACC PensionCommentary 2009-2 at 6; See also Caygill (supra fn10)

5.2 As the effect of the proposal will be to reduce weekly compensation to lower paid workers, the Commission is concerned that this will again have the effect of penalising a vulnerable group.

5.3 The minimum wage is basically the minimum on which a person can be reasonably expected to live. A person who has been injured in a workplace accident may require more to survive. The Commission considers it is inappropriate to trade off a person’s right to a minimum wage against the need to contain costs.

5.4 The Regulatory Impact Statement recognises that the change may increase welfare costs

if the claimant is unable to meet extra costs and is ineligible for ACC. We cannot see how this could be seen as a saving when the effect may simply be to transfer the cost to

another arm of government.

The Commission recommends retaining the present period at which weekly compensation will be increased to the level of the minimum wage.

6. INCREASED THRESHOLD FOR HEARING LOSS: CLAUSE 52

6.1 The Bill introduces a requirement that injury related hearing loss must reach a 6% threshold before a person can be considered for cover. Although the Explanatory Note does not give a reason for this, the Regulatory Impact Statement indicates that the savings to ACC that could result might amount to about $10.3 million a year¹³ .

6.2 The move has been criticised by the Hearing Association¹⁴ and one estimate suggests that the effect could be to deny compensation to 3000 people¹⁵ .

6.3 Audiologists consider it artificial and misleading to attribute a percentage to hearing loss.

Rather they plot levels of hearing across 6 different frequencies (or tones) and measure sound levels from 0 decibels (dB) to 110/120 dB.

13. DOL Regulatory Impact Statement: Amendments that rescind changes by the previous government and present cost containment opportunities. This would bring the scheme into alignment with that in some Australian jurisdictions. The Commission considers the comparison is inappropriate given the unique nature of the ACC scheme.

¹⁴ Press Release, 16 October 2009. The Hearing Association note that it could also impact

disproportionately on older people

¹⁵ New Zealand Herald fn 16

6.4 Even people with a “mild” hearing loss (20 – 40 dB) can gain significant benefit from wearing hearing aids. This translates into increased participation in society and the labour market, and therefore increased confidence and contribution¹⁶ . It follows that people with only a mild hearing loss would be impaired in their functioning if they did not have a hearing aid/s and their ability to participate in the labour market would be

_{correspondingly impaired}¹⁷ _.

6.5 There does not appear to be a percentage measure for any other form of personal injury.

The Commission therefore considers that the requirement that a claimant has sustained

6% loss of hearing before being eligible for treatment amounts to intra-ground discrimination as it imposes different criteria for those claiming compensation for hearing damage as opposed to other forms of injury.

6.6 As we noted in our introduction, the right to non-discrimination and equal protection of the law is required by all the international human rights instruments¹⁸ . This has been most recently reinforced by the United Nations Convention on the Rights of Person with Disabilities which New Zealand ratified last year. The UN Convention not only reinforces the right of disabled people to enjoy the rights in all other international instruments, it also imposes on ratifying States an obligation to

safeguard and promote the right to work including for those who acquire a disability during the course of employment by taking appropriate steps to inter alia ... promote vocational and professional rehabilitation, job retention and return to work programmes ...¹⁹

16. A recent study from the Royal National Institute for Deaf People in the UK Hidden Crisis: Why millions keep quiet about hearing loss indicates that many people do not divulge hearing loss because they are worried about job security. There is no reason to suppose that this any different in New Zealand and it could in fact be exacerbated if workers were also aware that they would not receive compensation below a certain level.
17. The Hearing Association also notes that audiologists have recently provided ACC with examples of people with noise damaged hearing between 4% and 5% whose professional and personal lives

had been seriously affected.

¹⁸ See fn 4

¹⁹ _{Article 27: Work and Employment : subs (f)}

The Commission considers that any person with a hearing loss that is not categorised as “normal” should be entitled to remedial support.

7. AMENDING THE MINIMUM NUMBER OF HOURS A CLAIMANT IS ABLE TO WORK FROM 35 TO 30: CLAUSE 4

7.1 Clause 4 will amend section 6 of the IPRC Act which defines vocational independence.

Vocational independence assessments are designed to assess whether claimants are sufficiently rehabilitated to allow them to return to work. If claimants are assessed as being able to work a certain number of hours, their weekly compensation ceases after three months.

7.2 The Explanatory Note states that the change suggested is consistent with the definition of full time work used by Statistics New Zealand, the Ministry of Social Development and the Inland Revenue Department. This does not justify adopting the same definition in the IPRC Act. The IPRC Act is designed to ensure that a person who has suffered an injury is sufficiently rehabilitated to return to work – preferably work that is similar to, or the

same as, that on which they were employed before they suffered the accident. This is different to the purpose of the agencies identified.

7.3 The vocational independence assessment process before the 2008 amendment was far from perfect. Investigations into the effectiveness of ACC’s vocational rehabilitation initiatives almost always concluded that the assessments were ineffective²⁰ .

7.4 Claimants could lose their entitlement to weekly compensation through the vocational independence process before they were completely rehabilitated. As there is no requirement to consider whether there are jobs available²¹ - and ACC is under no obligation to ensure that employment is actually obtained - ACC could stop both

20. See list of authorities cited by Barber J in McArthur v Accident Compensation Corporation DC Dunedin 11/12/2008 at para [30]. This was compounded by the reluctance of the Courts to set aside the findings of occupational and medical assessors as the Courts consider that challenges to assessments and resulting decisions by the ACC must be confined to the traditional grounds established by administrative law principles: Ramsay v Accident Compensation Corporation [2004] NZAR 1 (HC)

²¹ Section 108(2)(b) states (inter alia) that the purpose of an occupational assessment is to match the

claimants’ skills with types of work (whether available or not)

compensation and rehabilitation without ensuring that employment in the nominated position is achieved or was even achievable in the first place.

7.5 As one commentator observed²² :

Assessments can be divorced from reality because there is no requirement for a claimant’s skills to be verified, or for ACC assessors to consider the

availability of jobs in the market place. The consequence of this is that long term claimants who are no longer entitled to weekly compensation may become unemployed and suffer income loss ... many workers put through the process

do not return to work but are simply shifted from weekly compensation to

“work and income” benefits ... The effect is simply to shift the cost to the State.

7.6 Lowering the threshold so that a claimant must only be able to work 30 hours before being considered fit to return to employment coupled with the fact that there will no longer be a requirement to take into account pre-injury income could pressure people into work that does not reflect their qualifications or experience. In the Commission’s view, this is inconsistent with the concept of complete rehabilitation and runs counter to the purpose of the IPRC Act.

The Commission recommends retaining the requirement that a claimant should be able to work 35 hours before being taken off ACC.

8. MAKING IT OPTIONAL FOR ASSESSORS TO CONSIDER PRE-INCAPACITY EARNINGS WHEN UNDERTAKING VOCATIONAL INDEPENDENCE ASSESSMENTS: CLAUSE 9

8.1 Clause 9 will amend section 91 of the principal Act and Clause 25 of Schedule 2 which govern the way in which the initial occupational assessment is carried out. Assessors will have the discretion whether to take into account what the person earned prior to their injury rather than being obliged to - as is the case at present. The change is intended “to

²² Armstrong, H “Vocational Rehabilitation and Long Term Claims” [2008] New Zealand Law

Review 21

inform the occupational assessment process”. The Commission considers this may simply expedite a claimant’s exit from the ACC scheme.

8.2 A review last year by Price Waterhouse Coopers recommended that the Corporation should “consider opportunities for expanded vocational development for claimants who are facing a loss of income benefits due to Vocational Independence Assessment but who have significant earnings impairment”. One of the aims of the recommendation was to “restore and perhaps even extend past the claimant’s pre-injury vocational situation in

terms of participation, flexibility and opportunity”.²³ Some of these concerns were

addressed by the changes brought about by the Injury Prevention, Rehabilitation and

Compensation Amendment Bill (No.2).

8.3 Allowing assessors to disregard, or not take into account, pre-injury earnings when carrying out a vocational independence assessment could result in a situation where a claimant who was earning $1500, for example, before their injury will have their weekly compensation stopped if they are considered able to do any job for 30 hours a week that pays only the minimum wage i.e. $375 a week.

8.4 At present the Act inclines in favour of the assessor’s view. The Commission considers that the vocational rehabilitation process needs to be more focussed on the claimant.

It should not only continue to be mandatory to take into account pre-injury earnings but also for a claimant’s views to be considered to ensure rehabilitation is tailored to their individual needs and aspirations.²⁴ This does not mean that claimants would be able to dictate the nature of their employment (including if, and when, they chose to work) but it would better reflect the international requirement that the right to work is an inherent part of human dignity and should be “freely chosen and accepted”²⁵ .

²³ Price Waterhouse Coopers, “Accident Compensation Corporation New Zealand: Scheme

Review” (2008) Executive Summary at xxxi

24. This could involve retraining workers to return to their previous work or providing them with further retraining if this is not viable. Armstrong (supra) at 25. The author identifies the approach

taken in Germany where this happens routinely as one worth emulating here

²⁵ Committee on Economic, Social and Cultural Rights, The Right to Work: General Comment 18

E/C.12/GC/18 (6/2/06) at para 1. The General Comment also states that the right includes not being forced in any way whatsoever to exercise or engage in employment.

The Commission recommends that the obligation for assessors to take into account a claimant’s pre-injury earnings is retained and consideration given to ensuring vocational rehabilitation assessments pay greater attention to the circumstances of individual claimants.

9. REMOVAL OF THE MINISTERIAL ADVISORY PANELS: CLAUSES 8 & 12

9.1 The Bill will remove the requirement to have two Ministerial advisory panels – one on work-related gradual process, disease, or infection and another which advises on injury surveillance and focuses on the use and collection of injury statistics. The rationale for this appears to be that the task of the first is essentially complete and there is no need for the second as the Injury Surveillance Officials Group carries out a similar function.

9.2 The two panels have provided valuable mechanisms for ensuring advice is available by experts and necessary data is collected. Although the collection of statistical information is improving, the information needed to establish effective injury reduction programmes is still far from complete.

The Commission opposes the abolition of the advisory panels and recommends their retention.

10. LIMITING COMPENSATION FOR SELF-INFLICTED INJURY & SUICIDE: CLAUSE 10.

10.1 The Bill will reinstate the disentitlement provision in the 2001 Act (itself problematic for the reasons indicated in 10.2) while retaining section 21B which was added in 2008 (and with which the Commission also has problems).

10.2 Before 2008 claimants and surviving family members were often uncertain whether they were entitled to cover²⁶ . This was principally because of section 119(2) IPRC Act 2001 which stated that ACC should not provide cover for self inflicted injury or suicide unless the injury or death was the result of mental injury (defined as a clinically significant

26. Supra fn 9 at 5. Research also suggested that the vast amount of suicidal behaviour and self- inflicted injury was associated with having a mental disorder and further proof of mental injury added little to the determination of cover.

behavioural, cognitive or psychological dysfunction) resulting from physical injury or by reason of certain criminal acts.

10.3 The 2008 amendment repealed s.119 in its entirety and added a new definition of work related mental injury in section 21B.

10.4 The rationale for reversing the 2008 amendment is that ACC should not provide entitlements to claimants who do not have a “work related mental injury”- that is, do not fall within ss.21 or 21B. In other words, under the Bill a claimant’s injury or suicide would need to be the result of a mental injury that itself is covered by the Act or is the result of physical injury for which the claimant has cover. The situations in which mental injury is covered are extremely limited and very subjective (see para 10.7).

10.5 The Attorney-General’s advice on consistency with the Bill of Rights Act considers whether clause 10 gives rise to intra-ground discrimination on the ground of disability by creating a distinction between people whose injury is the result of a mental injury or illness that satisfies the exceptions in s.119(3) – that is, a mental illness resulting from a physical injury for which the claimant is covered or resulting from certain criminal acts - and those whose mental injury does not. It concludes that it does not because of the approach taken by the High Court in Trevethick v Ministry of Health²⁷ .

10.6 Trevethick held that the definition of disability did not include the cause of the disability.

The Attorney-General argues that the distinction would apply here because the mental injury is caused by one of the situations in s.119(3) as opposed to mental injury arising from other causes such as genetics or disease.

10.7 The Commission disagrees with this. Apart from the fact that it is not always easy to identify what causes a mental injury, the definition has to be read in conjunction with s.21B(2)(b)²⁸ . Section 21B(2)(b) only allows people to claim compensation for mental injury if the event that leads to the injury could be “reasonably expected to do so”. This introduces a subjective assessment to a list of criteria that are otherwise objectively ascertainable. As this is not the case with physical injury, the Commission considers that

²⁷ [2008] NZHC 415; (2008) 8 HRNZ 485

²⁸ Inserted from 1/10/08 by s.6 of 2008, No.46.

it results in intra-ground discrimination between mental and physical injury and creates an extra hurdle for people with mental injury²⁹ .

10.8 The Commission therefore does not agree with the distinction drawn by the Attorney- General but at the same time considers that as the change to s.119 retains the reference to s.21B, there is a form of intra–ground discrimination but it is between physical and mental injury.

10.9 It is anticipated that the change will generate savings of $33 million by 2015³⁰ . The potential cost to the health and welfare system to support claimants and their families has not been quantified. It is also accepted that there is likely to be a considerable cost in human terms to the families and whanau of people who commit suicide³¹ .

10.10 The Commission considers that at the very least the status quo should be retained as it is in the interests of both society and the individual that they are rehabilitated regardless of the cause of the injury. It is also only just that dependants of a particular claimant receive appropriate entitlements.

The Commission recommends that the provisions relating to cover for self-inflicted injury are retained and that further consideration is given to whether it is necessary to retain the subjective criteria in s.21B that apply only to mental injury.

11. DISENTITLEMENT FOR CLAIMS THAT ARE “REPUGNANT TO JUSTICE”: CLAUSE 11

11.1 At present if a claimant’s injury occurred during the commission of a crime for which he or she is sentenced to imprisonment, ACC can apply to the District Court for a determination whether providing entitlements should be prohibited because it would be “repugnant to justice”. Section 122 (3) of the principal Act lists the favours that the

29. The Commission considers that this extra requirement is unnecessary as the Act includes a comprehensive definition of mental injury in s.27. Given that any diagnosis will be considered by a psychiatrist when the ACC considers whether to provide cover, this could ensure that minor transient forms of mental injury will not qualify.

³⁰ _{DOL Regulatory Impact Statement at 16}

³¹ Ibid.

Court should have regard to when considering whether the claimant should receive a specific entitlement.

11.2 The Bill introduces a new provision which will automatically disentitle certain imprisoned offenders from receiving ACC entitlements – apart from treatment – if they suffer an injury in the course of committing an offence punishable by a maximum term of imprisonment of two or more years. Among other things, they will lose the right to rehabilitation³² .

11.3 It is important to recognise that people do not lose their rights because they have committed a crime and been sentenced to imprisonment. People are sent to prison as punishment not for punishment. The punishment is the deprivation of liberty. Creating an automatic disentitlement as well is therefore a significant matter.

11.4 The Commission considers that the current system already has appropriate protections in place for dealing with disentitlement in this situation. District Court judges are well qualified to decide entitlement in any given case and their decisions are independent and publicly available ensuring both transparency and accountability.

11.5 Under the Bill, if a claimant is injured during the commission of a crime that meets the relevant criteria, disentitlement will automatically follow. There is no allowance for mitigating factors to be taken into account and the only safeguard is the Ministerial discretion to exempt a claimant in exceptional circumstances. However, even this is unsatisfactory as the claimant cannot initiate it and, in the absence of a transparent process, there is no guidance of what will amount to exceptional circumstances.

The Commission recommend retention of the status quo.

12. ADDITIONAL REGULATION: FUNDING FOR COUNSELLING FOR SENSITIVE CLAIMS

32. The Commission notes that Principle 65 of the Standard Minimum Rules for the Treatment of Prisoners (which are found in the Corrections Act 2004) specifically refers to the treatment of prisoners having as its purpose the establishment of the will to lead law abiding and self supporting lives after release.

12.1 The Commission understands that any changes to the assessment and treatment of people who have been sexually abused or assaulted will not be effected through legislation but by regulation, principally through the new treatment guidelines developed by Massey University. However, we consider that the importance of the issue justifies some comment at this point.

12.2 We agree with the National Council of Women that counselling for people who have been sexually abused or assaulted should be fully funded by ACC. The cost of services should not be a barrier to access and should include assistance with the costs of childcare and transportation to allow victims to access appropriate services; inadequate funding of counsellors has led to a shortfall in services with unreasonable waiting lists and community based organisations that deal with such matters are not adequately resourced resulting in limited geographical cover; and that the delay in gaining approval from ACC for assistance to partially meet the costs of treatment has been alarmingly protracted putting pressure on victims and increasing their fears and anxiety.

12.3 The Commission does not accept that the policies introduced on October 27 will not have an impact on this very vulnerable group and their ability to obtain appropriate

counselling. All the information the Commission has received on this matter indicates that, to the contrary, the increased difficulty in accessing counselling – including the requirement that complainants must establish proof of “significant mental injury” – will make recovery more difficult and risky.

The Commission recommends that ACC reconsider the treatment guidelines that have been put in place. There needs to be thorough review of the system and support for counselling of victims of sexual abuse.

13. CONCLUSION

13.1 ACC is a form of social insurance. The original scheme was a trade-off between the right to sue for compensatory damages and comprehensive, no-fault cover in the event of an accident. The Commission is concerned at the changes proposed under the Bill that appear to detract from this.

13.2 Tinkering with entitlements “at the margins”, undermines the concept of a truly inclusive scheme and increases the potential for litigation about what is or is not covered by work related injury. Further, the implications of some of the changes proposed – particularly those which will involve increased administration or passing responsibility to other government agencies – do not appear to have been fully considered. Consideration about what should be covered by ACC should be “a social decision not one dictated by costs

and probabilities”³³ .

13.3 The Commission recommends the Bill is deferred until the Steering Group on ACC chaired by David Caygill reports next year. This would allow more extensive consultation on the implications of the changes suggested. While many changes may seem to be minor the cumulative effect could undermine the concept of ACC as it is currently understood.

Should the Bill go ahead, the Commission recommends:

• retaining the minimum wage as the level of compensation for loss of potential earnings;

• retaining the present formula for calculating compensation for non-permanent workers;

• retaining the present time frame for increasing weekly compensation to the level of the minimum wage for low income workers;

• retaining the present threshold of 35 hours for assessing vocational independence;

• removing the requirement that a claimant with hearing loss have sustained a loss of 6 % before becoming entitled to remedial support;

• retaining the requirement for assessors to take into account a claimant’s pre-injury earnings and give greater attention to individual claimants’ needs;

• retaining the Ministerial advisory panels;

• retaining the right to receive compensation for self-inflicted injury and suicide;

³³ St John, S [2003] VUWL Rev 27; (2003) 34 VUWLR 443

• retaining the status quo relating to claims by certain groups of prisoners; and

• ensuring that claimants with sensitive claims are provided with access to adequate and appropriate counselling.