The Minister moved a motion of urgency to introduce the bill.
Photo: VNP / Phil Smith
The government has introduced legislation so the welfare system can legally claw back payments when someone has been backpaid for an ACC claim.
Social Development and Employment Minister Louise Upston moved a motion of urgency to introduce the Social Security (Accident Compensation and Calculation of Weekly Income) Amendment Bill shortly after 7.30pm.
It comes after a significant High Court ruling against the Ministry of Social Development (MSD) on the recovery of welfare payments late last year.
The ruling said MSD couldn’t require people to pay back supplementary assistance they’d received (like accommodation supplements and winter energy payments) once they had been paid back-dated compensation from Accident Compensation Corporation (ACC).
For context, many people claim support from MSD while they wait on cover from ACC and once ACC grants cover, it then pays the person backpay for weekly compensation.
In the meantime, the person may have received support from MSD while they were waiting on cover from ACC.
In these situations, ACC automatically reimburses MSD for the main benefit and up until now, MSD was also requiring people to repay any supplementary assistance payments received during the backpay period.
At the High Court Justice Grice held that while the law allowed ACC to reimburse MSD for the main benefit, it did not extend to supplementary forms of assistance designed to meet essential costs.
Speaking at the bill’s first reading this evening, Upston said the legislation clarified the law on the impact of ACC payments on welfare entitlements, given the High Court decision conflicted with “long standing policy intent and operational practice”.
She said there were two main main cohorts of ACC compensation recipients in the welfare system: people who receive ACC and welfare assistance at the same time and people who receive welfare assistance while they wait for ACC to decide on their entitlement
“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,” Upston said.
The amendment bill passed its first reading with support from Labour, New Zealand First and the ACT Party, with the Greens and Te Pāti Māori opposed.
The Labour Party’s Willie Jackson said the legal ruling “could or does create a double-dipping process that isn’t in the best interests of everyone”.
“When we looked at it we thought that if we were in government we would also be seriously looking at it.
“Double-dipping between MSD and ACC would undermine people’s faith in the system, which is something we all need to avoid.”
The Green Party’s Ricardo Menéndez March said the law change would affect those who had struggled to pay rent and power bills after an accident.
“Painting ACC claimants as though they would have been well off universally is just wrong. We’re talking about people who would have potentially had a hard time while on a main benefit waiting for their claim.
“The solution here isn’t so much to, once the High Court found MSD had effectively been acting unlawfully, change the law so it complies with the policy that’s been unlawfully applying for quite a few years.”
The ACT Party’s Todd Stephenson said the amendment did not change the supports people were entitled too.
“There is no new policy. What MSD had been doing was long-standing practice under successive governments….we just need to get on with making sure the policy, which has been clear for decades, is properly legally enforceable.”
New Zealand First’s David Wilson said the bill was fair.
“It’s a pragmatic response to something that is out of whack with what we’re trying to deal with here. It’s improving fairness and equality before the law so we’re very pleased with that.”
Te Pāti Māori’s Oriini Kaipara said the bill was “punishing the injured, the poor, whaikaha (the disabled) and Māori once again”.
“The nerve of the Minister and her government to put itself, once again, above the law, above legal rulings handed direct from High Court judges across the country.
“It applies retrospectively, validating past decisions and creating new debts. Māori are disproportionately affected due to the higher ACC claim rates, lower incomes and systemic delays.”
The bill will go to Select Committee in a week’s time.