Only 13 of every 100 people who left long-term ACC support in the latest year went back to the job they held before. Roughly half of the exits had no recorded reason at all. Those numbers, obtained under the Official Information Act, sit awkwardly beside the message coming out of New Zealand’s accident insurer, which says its long slide is over.
Oliver Hartwich of the New Zealand Initiative think tank takes aim at how the Accident Compensation Corporation counts success. When weekly payments stop, he writes, the agency waits five weeks, and if nothing happens it books the person as recovered. Nobody phones the employer. Nobody checks whether a job exists.
What the turnaround looks like
The scheme did drift for about a decade. Recoveries took longer, more people stayed on long-term support after injuries that should have healed, and the projected cost of open claims roughly doubled. The government stepped in with a review, a new chair and monthly reporting. A pool that had grown by nearly 15 percent a year stopped growing by April.
The recent figures look good. ACC’s outstanding claims liability fell by $355 million in the six months to December, according to B2B News. Claims costs ran 4 percent under budget. The long-term pool, at 24,772 claimants, grew by only 19 net claims in the December quarter. The agency went from 4,000 full-time-equivalent staff in 2023 to 5,000 by June 2026, many of them claims managers.
The trouble with the headline number
Hartwich invokes Goodhart’s law, the idea that a measure loses its meaning once it becomes a target. Count every ended payment as a recovery and the way to improve the score is to end more payments. On Treasury’s figures, ACC turned down cover or support almost 173,000 times in the year to September, up 13.6 percent, and suspended weekly payments 80 percent more often. A record of more than 8,700 people came off long-term support in the year to June.
Disputes are rising with the declines. Lawyer Warren Forster warned in January 2025 that the plan risked moving costs around rather than removing them. “It’s not only going to cost ACC more, it’s going to cost taxpayers more,” he told RNZ. His numbers then showed only 10 percent of people taken off long-term claims had returned to work over the previous five years.
Hartwich notes that some tightening was overdue, since ACC had been paying for things injury no longer explained. But a worker who has not healed does not disappear. The bill lands on a hospital waiting list, a benefit, or the patient.
Case managers did the heavy lifting
Treasury examined what produced the improvement, and by Hartwich’s account the answer was not mainly the cuts. The biggest gain came from restoring one-to-one case managers, who replaced years of call-centre queues. ACC’s external actuary estimates that getting recovery right could take $500 million to $800 million off the future cost of existing claims within two years.
The wider finances remain deep in the red. The 2024-25 annual report showed a $1.5 billion net deficit, and the outstanding claims liability rose $3.3 billion to $63.6 billion. The old trajectory pointed to a $26 billion deficit, and the plan is a $2 billion surplus by 2030.
Sources
- ACC measuring wrong figure when it comes to getting people back to work
- ACC turnaround: 25% more staff, disputes surge
- ACC measuring wrong figure when it comes to getting people back to work
