The ACC turnaround plan is expected to deliver a $2 billion surplus by 2030.
The Accident Compensation Corporation will need to get its finances out of the red by doing the basics better, rather than by the Government narrowing the scope of what it covers.
The state injury insurer made the clarification today, as it released a “turnaround plan”, formulated in response to findings from reviews of the organisation’s culture and claims management processes.
The Government had been worried about ballooning costs at the Accident Compensation Corporation (ACC).
On the path it was on, its deficit was due to deepen to a whopping $26 billion by June 2030. For context, the Government’s entire Obegal Budget deficit was worth $14b in June 2025.
Under ACC’s new plan, it aims to be able to report a $2b surplus by 2030. This forecast factors in some technical exclusions and reflects upcoming changes in accounting standards, favourable to ACC.
Central to ACC’s strategy is the return to claimants being allocated individual case managers, so they have a single point of contact.
Speaking to the Herald, ACC chairwoman Jan Dawson said this approach started being used again six months ago, with improvements already noticeable.
ACC plans to invest in 285 more claims management staff to help get people rehabilitated faster.
Dawson recognised a lot of work would need to be done to reduce costs to the extent ACC’s books broadly get back to a break-even point within the next five years.
She said the changes wouldn’t make it more difficult for people to get ACC cover.
“But there will be a more focused approach to: ‘You’ve got X injury, here’s the expectation of the treatment you need.’
“It may be tougher because you’ll be expected to undertake the treatment and participate.”
Dawson said the deal wasn’t one-sided and that there would be a much clearer focus on those who don’t play their part in getting rehabilitated.
She said the rise in claims costs and the increase in the time it was taking claimants to get back to work happened incrementally over time.
While changes look small year-on-year, they add up over time and are worth a lot when you consider ACC manages about two million new claims a year, Dawson said.
Over the last decade, the number of claimants accessing weekly income compensation for more than one year has grown significantly, from around 12,300 to 24,500.
Meanwhile, the amount spent over a year on rehabilitation and treatment support has jumped from $2.1b to $4.4b - an increase well above the rate of inflation or population growth.
Dawson recognised several factors outside of ACC’s control weigh on its finances.
For example, the health system is under pressure. Costs have risen rapidly and wait times for treatment have increased markedly since before the pandemic. There is also more societal awareness around mental health.
Nonetheless, Dawson – who is only new to the role – said ACC would focus on what it could control.
She said the question of whether the scope of what ACC covers needs to be narrowed by law was one for the Government to answer.
Minister for ACC Scott Simpson had considered legislative change, particularly after a 2023 court ruling related to childhood sexual abuse victims expanded ACC’s outstanding claims liability by $3.6b.
However, the Government hasn’t made the change, which would draw criticism for disproportionately affecting women, and would come hot on the heels of its pay equity change, which again saved billions, arguably at the expense of women.
Dawson recognised the parameters of what ACC covered were constantly being challenged in court. Accordingly, legislative change in one form or another couldn’t be ruled out in the future.
Chief executive Megan Main elaborated on the plan: “It’s about ensuring injured people get the right level of support, at the right time.
“This includes supporting long-term clients with less serious injuries back to independence (including back to work where this is practical), working in partnership with health providers to improve client outcomes, and ensuring people are getting the right level of support that reflects their current need.”
Last month, Main announced she wouldn’t seek reappointment once her five-year term ends in November.
Simpson welcomed ACC’s turnaround plan, which came as he called the organisation out for its underperformance and pushed it to improve.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.