The Government is introducing legislation to clarify the law on the impact of ACC payments on welfare entitlement and ensure the process is fair.
Social Development and Employment Minister Louise Upston says the Social Security (Accident Compensation and Calculation of Weekly Income) Amendment Bill will:
- confirm the longstanding policy intent underpinning MSD's approach to charging income, including income from ACC
- authorise MSD to retrospectively consider a person a non-beneficiary when their backdated ACC payment reduces their benefit to zero for the applicable period, as is current practice
- reflect the principles of a targeted welfare system; where the more income you earn, the less assistance you receive from the state
- provide certainty in the law and remove the potential for interpretations of the law that go further than the policy intent, creating inequities between different cohorts of people receiving ACC payments.
- 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
"There are two main cohorts of ACC compensation recipients in the welfare system," Louise Upston says.
"Under the current situation, as interpreted by the courts, the latter group, who receive lump sum payments, are treated more generously than the former.
"They are in effect receiving two forms of income support to address one need. This also means these clients can remain eligible for assistance which only beneficiaries receive, such as the Winter Energy Payment.
"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," Louise Upston says.
