How ACC plans to manage the estimated $3.6b cost of compensation for abuse survivors

RNZ News

a day ago

ACC chief executive Megan Main
Photo:
Supplied / ACC
A significant number of abuse victims could be eligible for ACC compensation following a landmark court ruling that could cost it billions of dollars.
But ACC will not immediately be contacting everyone it believes might be eligible, due to fears of retraumatising them and its case managers being overwhelmed.
Advocates and a survivor fear the corporation is stalling to avoid paying out.
The landmark Court of Appeal decision - TN vs ACC, issued in December 2023 - made more childhood abuse survivors eligible for financial compensation. ACC estimated it could affect 100,000 people and cost it $3.6 billion.
Nearly two years since the decision was issued, ACC has decided how it will "fully implement" the ruling from 29 September.
Anyone unable to work due to a mental injury arising from childhood sexual abuse can apply for weekly compensation, known as Loss of Potential Earnings (LOPE) payments.
Previously, the date of injury for LOPE was the date they first sought treatment for a mental injury and this had to be before they were 18 years old.
The 2023 TN vs ACC Court of Appeal decision removed the age limit and changed the date of injury to the date the abuse occurred.
In the case of TN, the claimant was abused from the age of two but prevented from seeking help by her family, which meant she could not report the abuse before she turned 18.
ACC applied interim measures while it worked out how it would "fully implement" the court decision. Last month, it estimated that about 262 people between June 2023 and April this year had been
accepted for LOPE payments as a result of the case
, totalling $50 million.
At the time, TN's lawyer Beatrix Woodhouse questioned the small number and said many ACC clients were not being made aware they might now be eligible or could apply.
Internal documents showed ACC had identified "significant numbers" of clients who were now likely to be eligible for LOPE, but it had decided not to proactively tell everyone.
"To avoid unwanted or potentially traumatic contact and unnecessarily raising client expectations, we will only proactively approach clients where we can identify a reasonably high likelihood of LOPE eligibility," a March ACC board paper stated.
Only clients with active sensitive claims would be approached to "reduce the risks of retraumatising clients who do not have active psychological support from ACC in place".
A "trial screening" - carried out in February 2024 - identified 420 clients most likely to be eligible for compensation and further analysis found some were already undergoing assessments for compensation, while others were not entitled or did not wish to be considered, the paper said.
ACC advocate and lawyer Warren Forster described ACC's approach as "quite shocking".
Warren Forster
Photo:
RNZ / Ian Telfer
"What ACC is effectively saying is 'we are not going to tell people that they might be entitled to this' even though they've got covered claims.
"They've calculated there are thousands of people in this category and they've said they'll only approach 420. That's a concern.
"In the context of
political pressure on ACC to stop paying
and
indications from the minister
that they might change this approach anyway, it seems like ACC is just stalling."
It was not ACC's place to decide what would retraumatise clients and everyone who might be eligible for compensation should be notified, he said.
In an interview, ACC chief executive Megan Main told RNZ it knew from experience that clients were likely to be impacted when contacted proactively to discuss financial entitlements. That was why it was taking a "phased approach" and taking its time "to get it right".
"We've prioritised working with new clients and clients seeking reassessment who are, by reaching out, indicating they're ready."
ACC would start to proactively contact clients it believed were most likely to be entitled to compensation next year.
"We'll work with providers, the advocate groups, we'll learn from survivors themselves about how they're responding to this," said Main.
The TN decision was difficult for ACC to implement, she said.
"This is a significant and quite complex change to how we make decisions about financial entitlements … and these are some of our most vulnerable clients.
"It's why we are treading carefully."
ACC currently had 15,000 sensitive claims clients and around 800 open applications for LOPE, she said.
An ACC client, who only wanted to be known as Lew, said the process of applying for LOPE itself was long and traumatising.
Lew suffered from post traumatic stress disorder from being abused as a child in state care. He had never been able to hold down a job for long and now in his 30s was unable to work at all.
He applied for LOPE in August last year after learning about the TN decision and has already gone through the two standard assessments to work out his eligibility, but the process was "traumatising" and "challenging", and had made his mental health worse.
"This process with ACC has actually affected my mental health so bad that I cannot work at the moment. I'm fighting a multibillion dollar corporation and I don't have a cent."
ACC told him in April that he needed a third assessment but due to a shortage of therapists this could not be done until October.
He questioned why ACC was choosing not to contact clients it believed may be entitled to compensation.
"They don't want to contact clients because they don't want to pay them out. They don't give a crap how traumatised these clients are, like myself, otherwise they would have sorted [my compensation] out."
In a statement, ACC said multiple assessments were sometimes required which could be frustrating for clients.
"The complexity of Lew's case has meant an additional medical assessment is also required. This will help us fully understand how his covered injury is affecting his ability to work," it said.
Photo:
Unsplash/ Kristina Flour
While overall most people would benefit from the TN ruling, some clients would end up worse off.
For example, if someone abused as a child had been working, but then could no longer work due to the mental injury arising from that abuse, they currently may be receiving weekly compensation based on 80 percent of their earnings.
Under TN, their weekly compensation may switch to LOPE, which was typically 80 percent of the minimum wage.
Main said ACC would work with those negatively impacted to ensure they were supported.
"So just to be clear, at the moment, we're not making any changes to any of those clients' existing financial entitlements, and we would expect to begin contacting those clients next year.
"If we identify that this new court ruling might impact their existing financial entitlements, we'll let them know, we'll help them understand what it means for them, we'd make sure they've got support from their provider to move, to move through that, and that wraparound support is there."
There was usually a four-week grace period for people switching between entitlements, but Main said ACC had not yet decided if this would apply to those left worse off by TN.
ACC documents said a phased approach was needed to limit the impact on staff and providers.
There was a "high risk" an influx of LOPE applications could put a strain on frontline resources, and staff could also be in the firing line as they bear the brunt of unhappy clients left worse off.
High case loads of between 100 and 120 active cases per case manager meant some staff had not had the chance to discuss the potential impacts of the TN decision with clients.
"There is a risk for vulnerable clients when their expectations are not met (and associated reputational risk for ACC) that will need to be managed through clear and effective communications."
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