The income support anomaly concerns a situation in which ACC back pays clients weekly compensation for the period they have to wait between their injury and when their claim is accepted. Photo / Supplied
The income support anomaly concerns a situation in which ACC back pays clients weekly compensation for the period they have to wait between their injury and when their claim is accepted. Photo / Supplied
The Government is introducing legislation to reverse a court decision that could have wiped large debts for some beneficiaries.
The High Court ruled the Ministry of Social Development (MSD) was wrong to retrospectively require people on a benefit to repay the supplementary assistance they received if they later receivedback payments from ACC for the same time period.
The Government disagrees, saying this interpretation meant people in this category were “treated more generously” than others as they received “two forms of income support to address one need”.
In a statement released prior to the introduction of the bill, Community Law Centres Aotearoa (CLCA), which acted as intervenor in the case, said the ruling was a “huge relief” for people “unfairly saddled with debts they could never have anticipated”.
Sometimes ACC back pays clients weekly compensation for the period they had to wait between their injury and when their claim was accepted.
CLCA chief executive Sue Moroney said this delay can be years and in the meantime, some people will receive supplementary assistance from MSD. Supplementary assistance includes payments like the accommodation supplement, disability allowance and winter energy payment.
MSD has been requiring people to repay any supplementary assistance received during the period the ACC back payment related to, Moroney said.
“These debts were often very large, and beneficiaries were often not in a position to repay MSD these amounts, having spent the supplementary assistance in good faith at the time on essential costs such as accommodation, heating and food.”
The court ruling would have meant those with such debts after receiving ACC back pay could have had those debts wiped.
Prime Minister Christopher Luxon and Minister for Social Development and Employment Louise Upston during a Jobseeker announcement in October last year. Photo / Dean Purcell
However, Social Development and Employment Minister Louise Upston said the court’s interpretation would mean these people were “in effect receiving two forms of income support to address one need”.
There were two main cohorts of ACC compensation recipients in the welfare system:
People who receive ACC and welfare assistance at the same time
People who receive welfare assistance while they wait for ACC to decide on their entitlement
“Under the current situation, as interpreted by the courts, the latter group, who receive lump sum payments, are treated more generously than the former,” she said.
“This would not result in fair treatment between these groups and isn’t in line with the policy intent.
“The Government has a duty to fix this situation and clarify the law, so it aligns with the longstanding intent of policy.”
The legislation will go before a parliamentary select committee for public submissions for one week.
Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.
