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NZ Herald
12-08-2025
- NZ Herald
How ACC plans to manage the estimated $3.6b cost of compensation for abuse survivors
Nearly two years since the decision was issued, ACC has decided how it will 'fully implement' the ruling from September 29. How the court ruling changed payments for abuse survivors Anyone unable to work because of 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 2 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 $50m. 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'. '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. ACC 'treading carefully' 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. LOPE process 'traumatising', says survivor 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 because of 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. How changes could make some worse off 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 because of the mental injury arising from that abuse, they currently may be receiving weekly compensation based on 80% of their earnings. Under TN, their weekly compensation may switch to LOPE, which was typically 80% 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. Impact on staff 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 caseloads 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.'
RNZ News
23-06-2025
- RNZ News
Abuse compensation claims has cost ACC $50 million so far
ACC estimates 262 people have been accepted for Loss of Potential Earnings payments, but initially estimated it would affect around 100,000. Photo: Supplied A Court of Appeal ruling that's blown a multi-billion dollar hole in ACC's books has so far cost it $50 million. The TN vs ACC ruling in 2023 allowed more childhood sexual abuse survivors to receive financial compensation from the corporation. ACC estimated the ruling, plus another Court of Appeal decision expanding cover of the scheme , could cost it more than $3.6 billion in outstanding claims liabilities. This contributed to ACC's $7.2bn deficit last year. Between July 2023 and April this year, ACC estimated 262 people had been accepted for Loss of Potential Earnings (LOPE) payments as a result of the TN vs ACC decision, at a cost of $50 million, according to newly released figures under the Official Information Act. TN's lawyer Beatrix Woodhouse said many survivors might not know they were eligible for financial compensation. "ACC initially estimated it would affect around 100,000 so 262 does seem very small. "There's not much visibility in terms of the new law, and I imagine that a lot of climates don't actually know that they are now eligible or can apply. In my experience, I'm making my clients aware of the change in law," Woodhouse said. Previously, childhood abuse survivors were only entitled to LOPE if they sought treatment for a mental injury arising from sexual abuse before they were 18 years old. The appeal court ruling changed this to the date on which the mental injury first occurred. In the case of TN, the claimant was abused from the age of two and prevented from seeking help by her family. Her family prevented the woman, who has name suppression, from seeing a doctor unaccompanied. This meant she could not tell anyone about the abuse before she was 18. When she eventually did seek help decades later, her father and uncle were convicted and sent to prison, but her first ACC claim for LOPE was rejected despite being so severely affected by the abuse she was unable to work as an adult. ACC deputy chief executive service delivery Michael Frampton. Photo: Supplied ACC said it was still working through the details of how it would "fully operationalise" the TN ruling . "When it was announced, we reached out to relevant professional bodies so they could let their members know and providers could advise their clients of this ruling," ACC deputy chief executive service delivery Michael Frampton said in a statement. "We've provided interim guidelines to staff handling requests for weekly compensation or Loss of Potential Earnings for sensitive claims. Our recovery partners have been responding to requests from existing sensitive claims clients and discussing financial entitlements with new clients who request them," Frampton said. ACC said the 262 claims were only an indicative figure because it did not have a specific way of knowing a claim receiving LOPE was a result from the TN case. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
