Push to change 'unfair' ACC compensation law around loss of potential earnings

Andrew Hall, needed seven weeks off work for his first spinal cord related surgery in 35 years but ACC told him he is only entitled to 80 per cent of minimum wage compensation. Photo / Martin Hunter

The Government is being urged to honour a pre-election promise to change an "unfair" law which sees some working people injured in accidents getting less than minimum wage while receiving follow-up medical care.

Currently, ACC pays people who are hurt in accidents while they are employed 80 per cent of their previous year's income while they're off work for treatment and rehabilitation.

But those who are injured while they aren't working - including people injured as children - are only entitled to "loss of potential income" payments of 80 per cent of minimum wage if they need follow-up treatment, even after they start working.

Barrister Warren Forster said the law around accident compensation had changed a lot during the past 30 years and he believed the current policy was discriminatory.

"There's no principled reason why we say 'well you were earning $10 a week in 1982, therefore you get $2000 a week now', [but] 'you were earning nothing in 1982 and therefore you get nothing now'."

The only way to make the system fairer would be to change the legislation, he said.

In its 2017 manifesto, the Labour Party said it would change the 2001 Accident Compensation Act to make it clear that anyone who is working and needs treatment for an injury would qualify for weekly compensation at 80 per cent of their income while off work, regardless of whether or not they were working when they were injured.

However, since the election, ACC Minister Iain Lees-Galloway is yet to confirm whether the law change is still on his agenda, and if so, when it would come into effect.

Lawyers, advocates and ACC clients who believe they've been shortchanged by the existing policy are pushing for answers.

A bill to amend sections of the act is before a select committee but lawyer John Miller, who has represented personal injury claimants for more than 40 years, said the promised changes to how weekly compensation was assessed hadn't been included in the bill.

Dr Denise Powell, president of Kiwis Acclaim Otago, a support group for injured Kiwis, said the group had been lobbying for years for the "inequitable" and "unfair" law to be changed.

"We believe this is a matter of some urgency and encourage the Minister for ACC to make it very clear when this will be actioned and whether it will be retrospective."

Christchurch man Andrew Hall, who became a C6 tetraplegic after diving into shallow water in 1983, is also calling for a law change.

He was a university student at the time of his accident however has been working full time during the three decades since.

Last July he needed time off work for a health issue related to his spinal injury.

"I had an acute episode where a loop formed on my large intestine and needed to be cut out," he told the Weekend Herald.

"It was a consequence of sitting down for 35 years. Your intestines get a bit sluggish."

Hall needed surgery to remove the section of bowel that was twisted and was required to have seven weeks off work while he recovered.

ACC told him he was entitled to only loss of potential earnings payments - about $500 per week - while off work because he was a non-earner at the time of the injury.

This was much less than Hall would have got if he was eligible for income-adjusted compensation because he had a reasonably well-paying job.

"I was absolutely gobsmacked," said Hall.

"The policy's wrong. I could have been a milk boy, a paper boy earning 50c a week [when I was injured] but I still would have been an earner and could have gone off on 80 per cent of any salary I earned [in 2017]."

ACC spokesman Nick Maslin said Hall's case was considered under the Accident Compensation Act 1982 which meant he was eligible only for loss of potential earnings compensation for any health problems related to his spinal injury.

Hall challenged ACC's decision and it is currently being reviewed by Fairway Resolution.

Lees-Galloway said he and his coalition partners were discussing the proposals in the Labour Party's 2017 manifesto and planning to introduce a second Accident Compensation amendment bill.

"The Government's agreed proposals will be available for public comment in due course."

"It's heartbreaking"

Meanwhile, ACC is standing by its decision to pay a burns victim injured as a child less than minimum wage, rather than 80 per cent his previous year's income, while he's off work recovering from reconstructive surgery.

Roger McKernan plays with his 10-month-old daughter Maddi at their home in Christchurch, while recovering from reconstructive surgery. Photo / Martin Hunter.

Roger McKernan was badly burned in a go-kart accident in 2002.

On May 29 this year he had further skin grafts and doctors told him he would need six weeks off work.

He believed he was entitled to payments of about $900 a week while recovering, based on 80 per cent of his previous year's income because this was the rate he received after an operation in 2014.

But ACC told him he would only get $504 a week because he was 13 years old and wasn't working when he was injured, despite the fact McKernan has since been in full time employment for several years.

After the Weekend Herald made inquiries, ACC reviewed McKernan's case.

The review has been completed and ACC spokesman James Funnell said it confirmed ACC's original decision.

"Mr McKernan's recent surgery was to further treat the injuries he suffered in 2002, before he had entered the workforce. As a result, all weekly compensation payments he receives relating to that injury are based on [Loss of Potential Earnings]."

McKernan could ask Fairway Resolution to independently review ACC's decision, Funell said.

McKernan, who is the breadwinner for his young family, said ACC's response to the review was devastating for him and his partner.

"It's absolutely heart-breaking. It's pathetic. For a company that millions of New Zealanders pay towards and a company that is meant to do right by other people, they've let the people down."

He said he would now have no choice but to return to his job as an asphalt plant operator three weeks early, against his doctor's recommendations, to afford to pay his rent and put food on the table.

A friend has set up a Givealittle page to raise money for McKernan while he's off work.