Independent Review of ACC to Address Declining Rehabilitation Rates and Rising Costs

"ACC is vital for supporting New Zealanders in their times of need, but over the last decade, its performance has shown troubling signs," said Mr. Doocey.

ACC Minister Matt Doocey has unveiled plans for an independent review of the Accident Compensation Corporation (ACC) to address growing concerns over declining rehabilitation rates and the increasing costs of the scheme. This comes in response to rising weekly compensation costs, higher average claims, and a significant burden being placed on households.

Concerns About ACC Performance: "ACC is vital for supporting New Zealanders in their times of need, but over the last decade, its performance has shown troubling signs," said Mr. Doocey. "Rehabilitation rates have declined, compensation costs have risen, and the average cost per claim has steadily increased." He emphasized that these trends are imposing additional financial pressures on families.

Increased Levies to Cover Rising Costs: As part of addressing these growing financial pressures, the Government has decided to raise the earners and business levies by up to 5% annually for the next three years. For individuals on the median full-time wage of around $70,000, this will mean an additional $42 in the 2025/26 financial year, or roughly 80 cents a week. By the end of the three-year period, the levy will increase by a total of $140 compared to current rates.

In addition, the levies paid by motor vehicle owners will also rise by 5% per year, plus an inflation adjustment over the same three-year period.

Focus of the Independent Review: The upcoming review will focus on claims management, specifically assessing whether ACC has the right interventions and strategies in place to help accident claimants return to work and independence as quickly as possible. The review aims to ensure that ACC is optimizing rehabilitation efforts and minimizing long-term dependency, a key priority for Mr. Doocey.

Alongside the review, Mr. Doocey is working with the ACC Board and the Ministry of Business, Innovation and Employment (MBIE) to strengthen performance monitoring and enhance the effectiveness of social rehabilitation services.

Government’s Commitment to Rehabilitation and Independence: "The core goal of this review and our broader approach is to ensure that ACC helps Kiwis recover quickly and return to work and independent living," Mr. Doocey said. "We must make sure ACC is effectively supporting rehabilitation and delivering better long-term health outcomes for accident victims."

Cost Burden and Staged Levy Increases: Mr. Doocey acknowledged the economic difficulties many Kiwis are facing, emphasizing that the staged increase in ACC levies is designed to minimize the impact on households during these challenging times.

“ACC has been a cornerstone of New Zealand’s injury prevention and no-fault personal injury coverage for over 50 years,” he added. "It’s essential that we refine the system to ensure that we’re not just providing support but also encouraging quicker recovery and reducing long-term dependency."

With the review underway, the Government is committed to ensuring that ACC remains a sustainable and effective system that continues to meet the needs of New Zealanders while controlling costs.