Hon Maryan Street

Minister for ACC

26 June, 2008 Media Statement

Law change improves ACC cover for casual and seasonal workers

More than 400,000 workers in casual and seasonal employment stand to gain improved accident compensation cover if they are injured under legislation passed tonight, says ACC Minister Maryan Street.

“The legislation will also ensure employees who develop a mental injury after being exposed to a sudden traumatic event during the course of their work will in future be entitled to ACC.

“These are two of a number of important changes made by the Injury Prevention, Rehabilitation and Compensation Amendment Bill (No.2), which extends or improves ACC cover on a number of fronts.

“The Bill passed its third reading in Parliament tonight, with only National and Gordon Copeland voting against it,” Maryan Street said.

“Casual and seasonal workers in retail, hospitality, care, transport, tourism, agricultural and meat plants will be among some of the more than 400,000 casual and seasonal workers who will be affected by one of the changes.

“These workers have been disadvantaged by the way weekly compensation was calculated. From August, long-term weekly compensation for this group will be based on the workers’ earning periods, rather than on the 52 weeks before the injury, which may have included non-earning periods.

“Under the current law most workers are not eligible for weekly compensation if they are “between jobs” or are otherwise on unpaid leave and are injured more than 14 days after stopping work,” Maryan Street said.

“The amendment also extends eligibility for weekly compensation to 28 days after stopping work, addressing the uncertainty for most people who are in this situation and ensuring more workers are eligible for cover.

“The introduction of cover for clinically significant mental injury caused by a traumatic event which has occurred in the workplace means that, for example, a train driver who hits someone on the tracks or a bank worker who witnesses a colleague shot during a robbery will now get the same benefits under the scheme as others harmed by their work.”

“This is a significant advancement in terms of ACC coverage in New Zealand. I’d like to pay tribute to the people who have experienced such mental trauma in the course of their work and had the courage to go public about it in order to advance the Bill and ensure others are protected in future,” Maryan Street said.

“The Bill also changes the provisions for work-related gradual process, disease, and infection claims to ensure people harmed by their work receive greater access to cover and more clarity around their ability to access it.

“Importantly the Bill clarifies that the responsibility and cost for investigating such a claim rests with ACC.

“Vocational rehabilitation provisions will also be made more flexible, enabling ACC the discretion to fund rehabilitation beyond the current three year time limit.

“The 65 year age limit on vocational rehabilitation will also be removed in recognition that this age group is increasingly opting to remain in, or return to, work,” Maryan Street said.

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Case Studies

1. A student is employed during the busy fruit picking season by a Nelson orchardist. While picking, she falls from her ladder and fractures her right leg, meaning she has to be off work for 10 weeks.

She had worked there for 24 weeks, earning $11,000 over that time. She didn’t have any other earnings over that time. During the four weeks immediately before her fall, she earned:

• Week 1 - $500

• Week 2 - $500

• Week 3 - $ 0

• Week 4 - $400.

Under current legislation

The student would have been assessed for compensation as:

• For the first four weeks after the first week of incapacity (short-term period): $1,400 / 3 weeks = $467 weekly earnings = $373 weekly compensation.

• For the period of incapacity after the first four weeks (long-term period): $11,000 / 52 weeks = $212 weekly earnings = $169 weekly compensation.

Under proposed legislation

The student’s weekly compensation would be assessed as follows:

• For the first four weeks after the first week of incapacity (short-term period): $1,400 / 3 weeks = $467 weekly earnings = $373 weekly compensation.

• For the period of incapacity after the first four weeks (long-term period): $11,000 / 24 weeks (the period over which those earnings were earned) = $458 weekly earnings = $367 weekly compensation.

The change for the student would deliver her about another $990.

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2. A client suffers a severe laceration to his lower right leg following a motorbike accident on 10 October 2007. His doctor considers that he is unfit for work for the next 30 days. Prior to the injury, the client was working for the Department of Conservation on a one year contract that ended on 21 September 2007.

The client was due to start back at work again on a short-term contract with the Department of Conservation beginning 15 October 2007 (due to finish in March 2008).

Under current legislation

The client is not entitled to weekly compensation because his incapacity commenced more than 14 days after he ceased to be an employee, despite the client providing evidence to support the fact that, had it not been for the injury, he would have been in employment from 15 October 2007.

Under proposed legislation

Under the changes, the client would be entitled to weekly compensation. The amended clause allows for an extension of earner status of 28 days from the last day worked to the date of the incapacity. Because the client suffered the personal injury within 28 days of finishing work, and had intended to start a new job within 3 months of the incapacity, then the client is eligible for weekly compensation.

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3. A meat processing worker dislocates his shoulder during a rugby game. His doctor considers that he will be unable to work for eight weeks. In the four weeks prior to his injury, the client earned $4,800 ($1,200 per week). In the 52 weeks prior to his injury, the client earned $46,000 during the 45 weeks that the meat processing plant was open.

Under current legislation

The meat processing worker would have been assessed for compensation as:

• For the first four weeks after the first week of incapacity (short-term period): $4,800 / 4 weeks = $1,200 weekly earnings = $960 weekly compensation.

• For the period of incapacity after the first four weeks (long-term period): $46,000 / 52 weeks = $885 weekly earnings = $708 weekly compensation.

Under proposed legislation

The meat processing worker would be assessed as follows:

• For the first four weeks after the first week of incapacity (short-term period): $4,800 / 4 weeks = $1,200 weekly earnings = $960 weekly compensation.

• For the period of incapacity after the first four weeks (long-term period): $46,000 / 45 weeks (the period over which those earnings were earned) = $1022 weekly earnings = $818 weekly compensation.

The change for the meatworker would deliver an extra $330.

ENDS

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