Overall, the hilarious situation made me assess my feelings of existential dread. I realised there’s something to be thankful for in these fraught political times: the Accident Compensation Corporation (ACC).
A people’s history
“The toll of personal injury is one of the disastrous incidents of social progress, and the statistically inevitable victims are entitled to receive a co-ordinated response from the nation as a whole,” then Supreme Court judge Owen Woodhouse described in his Royal Commission 1967 findings into workplace injuries.
He described a system where negligence action was a form of lottery, with victims having to prove employer fault in front of a jury. Alternative legal remedies otherwise left workers with very little compensation, and everyone else was left entirely to fend for themselves.
“Such a fragmented and capricious response to a social problem which cries out for co-ordinated and comprehensive treatment cannot be good enough. No economic reason justifies it. It is a situation which needs to be changed,” the report said.
Five principles – community responsibility, comprehensive entitlement, complete rehabilitation, real compensation, and administrative efficiency – are at the heart of what we’ve come to know as ACC.
Fast-forward to 1973, when the Accident Compensation Act (Act) was born, covering work injuries and car accidents.
A year later, the trailblazing no-fault scheme covered non-earners and abolished the right to sue for damages. A commission to administer the Act was formed in 1974 but was sadly ditched in 1982 in favour of the “corporation” model we have today.
Deficit mindset
Fifty years later, in December, the coalition Government announced plans to increase levies (up to 5% a year for three years) and conduct an independent review, citing concerns about ACC’s performance over the last decade.
“Rehabilitation rates are down, weekly compensation costs are up, and average costs per claim are up,” then ACC Minister Matt Doocey said in a statement.
Months earlier, in May, ACC announced plans to cut 10% of its workforce – or 390 jobs – to meet the coalition Government’s expectation of cutting costs by 6.5%. Among those reportedly on the chopping block were 29 roles dedicated to sexual violence, workplace, and road injury prevention – arguably essential services to improve ‘performance’.
Back to the numbers. In its 2024 annual report, ACC reported a $7.2 billion deficit, citing increased costs of 16%. New injury claims increased by 3.6% compared to the previous year, and new weekly compensation claims increased by 3.9%.
The report put it bluntly. The increased costs of providing compensation, treatment, and rehabilitation resulted from: changes in volume (GDP and unemployment rate), changes in goods and services (wage levels, inflation, cost of health services), and changes in operational, legislative, or policy approaches.
“High volumes affect the workload of our staff. The wider health sector also continues to experience workforce pressures, which can lead to delays in access to services, timeliness between consultations, and changes to medical certification practices that all influence rehabilitation timeframes,” the report read.
Interestingly, the same report repeatedly referred to a 2023 Court of Appeal decision that widened the scope for sensitive claims, putting a spanner in the works for ACC’s financial projections to the tune of an additional $3.6b.
Previously, sensitive claims were treated much like traditional insurance “claims-made policies”. The injury would be set when it was reported or treated for.
In the Court of Appeal case, loss of potential earnings was set at the age of 18, rather than the date of when the injury occurred. The Court of Appeal found in favour of the latter – a change for the better, I think.
We know that reporting sexual violence and accessing treatment can be fraught for many. For example, the 2021 Abuse in State Care interim report found that only 1.25% of victims who lodged sensitive claims since 2010 received weekly compensation.
“Some [survivors] spent years unaware they were even eligible to make a claim until being told by family, work colleagues or doctors,” the report said.
“To access entitlements, survivors must first satisfy various legal tests and undergo medical and/or psychological examinations. Many survivors describe the process as long, intrusive and retraumatising.”
Where to from here?
Ultimately, surely it’s a good thing that ACC is seeing a spike in claims?
Which is to say, how can ACC truly carry out its community responsibility or rehabilitation functions if “improved performance” is measured by progressing fewer claims (an easy win if the process is impossible to navigate), driving compensation levels down, and reducing the workforce tasked with doing the work?
Instead, let’s hope this independent review follows in Woodhouse’s footsteps and focuses on removing barriers for people needing to access services, removing the siloed nature of its operations (Woodhouse would call this “administrative inefficiencies”), or planning for potential changes to address inequities in the framework.
