Submission on discussion document 'Increasing choice in workplace accident compensation'

The Department of Labour invited comments on 'Increasing choice in workplace accident compensation.' by privatising parts of the ACC scheme. The RNZFB submission was concerned with potential effects of ACC changes on people who have lost sight through injury. The RNZFB submitted that regulations should prohibit insurance companies from charging higher premiums for disabled employees, that assurances of long-term cover are especially important for those with permanent injuries and that workers' existing rights and entitlements should be protected.

Introduction

This is the Royal New Zealand Foundation of the Blind's feedback on the Department of Labour's discussion document 'Increasing choice in workplace accident compensation.' The RNZFB welcomes the opportunity to provide feedback on the proposals.

Royal New Zealand Foundation of the Blind

The Royal New Zealand Foundation of the Blind (the RNZFB) is New Zealand’s main provider of sight loss services to blind and partially sighted people. The RNZFB's vision is empowering and supporting blind and partially sighted New Zealanders to ensure that they have the same opportunities and choices as everyone else.

The RNZFB has more than 11,500 blind and partially sighted members nationwide, including many who are deafblind.

Accidental injury is not a major cause of blindness, although there are a few cases each year. ACC recorded 1,572 active eye-injury claims in the 2008-2009 year.[1]

The sudden onset of blindness through injury is a traumatic experience which has a lifelong impact. In many cases, early rehabilitation and support services can enable a return to confidence, independence and productivity. Despite this, living with blindness incurs ongoing and lifelong costs to the individual over and above those that would be encountered if the person did not have sight loss.[2]

This submission is concerned with potential effects of ACC changes on people who have lost sight through injury. The RNZFB submits that:

• Regulations should prohibit insurance companies from charging higher premiums for disabled employees.
• Assurances of long-term cover are especially important for those with permanent injuries. Any changes should manage risk to ensure those with long-term injuries receive entitlements if the employer or insurance company is unable to pay.
• As outlined in the discussion document, workers' existing rights and entitlements should be protected in law. The Government should also ensure that rights are protected in practice by actively monitoring whether eligibility criteria for coverage are applied consistently across providers.

Insurance premiums

Section 3.3 of the discussion document, 'Protecting workers' rights' proposes that if employers purchase cover from a private insurer, the insurance contract must cover all of the workers they employ.

To ensure that workers' rights to non-discrimination are protected, the RNZFB submits that regulations should prohibit insurance companies from charging higher premiums for disabled people, or people with an existing injury or long-term medical condition.

If insurance companies were permitted to charge higher premiums for people with medical conditions or impairments, this would create a financial disincentive for employers to hire disabled people.

Disabled people have lower rates of employment than the general population. Of RNZFB members who are of working age, research in 2007 found that around 56 per cent are unemployed, and of those employed, many are under-employed.[3]

The Government has ratified and expressed strong commitment to the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD), which outlines the Government's commitments to ensure disabled people enjoy the full and equal enjoyment of all human rights and fundamental freedoms[4]. Article 27 of the UNCRPD recognises "the right of persons with disabilities to work on an equal basis with others; this includes the right to the opportunity to gain a living by work freely chosen or accepted in a labour market and work environment that is open, inclusive and accessible to persons with disabilities."

The Government's general policy direction through recent welfare reform and disability initiatives is consistent with increasing employment for disabled people. Reform of workplace accident compensation should not create employment disincentives that would lead to lower employment.

Long-term assurances

Assurances of long-term cover are especially important for those with permanent injuries, including those who lose their sight through injury. Through early and effective rehabilitation, many regain work skills, independence and confidence. However, living with blindness incurs ongoing and lifelong costs to the individual over and above those that would be encountered if the person did not have sight loss.

Any changes to workplace accident compensation should manage risk to ensure that those with long-term injuries receive entitlements if the employer or insurance company is unable to pay.

The discussion document outlines the need for provisions in the event of an employer or insurance company becoming insolvent or ceasing to trade. It is essential that Government provides assurance that individuals will continue to receive entitlements in these cases.

Conditions around the 'full self cover' options outlined in section 2.2 would need particular attention. If an employer were to bear the full long-term liability for work-related injury claims, this would require that the employer was sufficiently financially stable to pay ongoing claims for an employee or former employee's entire working life. Assurance of this viability would require ongoing assessment of the employer's financial position and long-term outlook over the course of their responsibility for claims.

If, as outlined, ACC provides cover in the event that insurance companies cease to trade, provisions would need to ensure that ACC does not bear the entire financial risk for long-term claims. This may give other providers a competitive advantage, and undermine the long-term viability of ACC to provide ongoing cover where needed.

Rights and entitlements

The RNZFB strongly supports the discussion document's proposals to keep individuals' entitlements as described in law, and not to allow the employer to choose to provide less cover.

However, Government should also ensure that individuals' rights are protected in practice by actively monitoring whether eligibility criteria for coverage are applied consistently across providers, for example by comparing the rates of treatment or declined coverage for different medical conditions.

Further information

The Foundation would welcome opportunities to provide more information if required. Please direct any questions to:

Moira Clunie, Insights, Policy & Advocacy Manager
Telephone: +64 9 355 6938
Email: mclunie@rnzfb.org.nz

Royal New Zealand Foundation of the Blind
Private Bag 99941, Newmarket, Auckland