ACC Minister Matt Doocey has announced an independent review of the Accident Compensation Corporation (ACC) in response to concerns about declining rehabilitation rates and increasing costs to businesses and households.

The review will focus on ACC’s claims management processes, ensuring the right interventions are in place to support claimants in regaining independence quickly.

Alongside this, Doocey said he is working with the ACC Board and the Ministry of Business, Innovation and Employment to strengthen performance monitoring and improve the cost-effectiveness of social rehabilitation services.

Doocey acknowledged ACC’s deteriorating performance over the past decade, with rehabilitation rates dropping, weekly compensation costs rising, and average claim costs increasing. These issues have contributed to the need for levy increases, which he confirmed would rise over the next three years:

•Earners and business levies will increase by up to 5% annually for three years. For someone earning the median full-time wage of $70,000, this will mean an additional $42 in the 2025/26 financial year and a total increase of $140 over three years.

•Motor vehicle levies will increase by 5% annually, plus an adjustment for inflation.

BusinessNZ supports independent review

The announcement of the review has been welcomed by BusinessNZ, which highlighted the financial strain levy increases would place on businesses and households.

BusinessNZ Chief Executive Katherine Rich said, “Businesses and households deserve better cost management and more transparency and accountability from ACC. It is hoped that an independent review will help achieve that.”

Rich acknowledged that the Government had taken BusinessNZ’s concerns into account, including serious issues with rehabilitation rates and ACC’s funding policies. She raised specific concerns about claim volumes rising faster than population growth and the need for ACC to improve its systems for accepting, managing, and monitoring claims.

“A comprehensive review of ACC’s funding policy is also needed. We pointed out that some ACC Accounts are currently underfunded, which will become very costly for future levy-payers. The Earners Account is currently only 90% funded, with a shortfall of $1.6 billion,” Rich said.

She also stressed that ACC’s funding practices do not align with the spirit of the Accident Compensation Act, which requires all accounts to be fully funded to meet the lifetime cost of claims.

“We welcome the coming independent review of ACC on behalf of all businesses, workers, and vehicle owners paying ACC levies who need assurance that the Scheme is being operated according to its statutory requirements,” Rich added.