No-Fault Accident Compensation in New Zealand
Total Page:16
File Type:pdf, Size:1020Kb
TABLE Z.-Percent of SMI enrollees meeting the deductible, allocates 37 percent of central government spend- by age and sex, July 1966-December 1970, a of January 1973 ing to welfare and social insurance. [Estimated from bpercent sample of SMI enrollees] The Accident Compensation Act of 1972- effective April 1, 1974-provides for two interre- Age and sex 1D~~l;,&~ 1967 ( IQ66 j 1969 1 1970 lated, no-fault accident compensation programs : ---_c- Total ___________ 16.8 35.1 37.6 40.6 42.2 (a) occupational disease and 24-hour accident -- -- 67-6365-66----_---___---_-______ _-_-----___ 13.0 25.3 27.2 29.6 31.1 coverage for the entire labor force, financed by ___ 15.4 32.7 w-70... - __ __ _______ ___ 15.7 34.1 38.0 :t: contributions from employers and the self- 71-72-m._______________ 16.5 35.1 39.7 43:4 75-7973-74.-.__-_ _- -_ _ --- -_ _ _-_ _ _ ______ __ 17.4 36.8 44152.: 44.3 employed ; and (b) complete motor-vehicle acci- 80-34.______-----______ ___ __ 18.619.8 “4”o.t 46.2 85 and over 42:0 43.6 46.3 47.7 dent coverage for the etitiie population financed ___________ 20.7 46.0 47.7 49.0 by vehicle drivers ,and owners.’ Men ______________ 16.3 ------ 33.4 35.6 -- 38.6 40.2 An agency under the Ministry of Social Secu- 6568____ __ _ _ _ _ _ _ _ __ _ _ _ 24.0 26.0 67-68-.-- _- _-- - - - _- __ _ _ 31.1 2: rity-the Accident Compensation Commission- 68-70____ __ __ _ _ __ __ _ _ __ 15:o:z 32.4 2: 71-72__________________ 16 0 33.6 36:l E is to supervise the two programs. The new ar- 73-74-___- _ - - ___ _ - __ _ __ 16.9 35.1 36.9 42:l 75-79--_- -- _-- - - - __ _ _ _ _ 18.2 39.6 rangements replace complicated mechanisms for m-84. __ _ _ _ _ - - - _- __ _ _ _ _ 19.8 E 42.2 :t: 85 and over ___________ 20.3 42:0 44.4 47.8 4s:7 dealing with compensation for industrial acci- -~. -- Women-. ______ __ 17.3 36.3 30.0 41.0 43.7 dents and for highway injuries where negligence --. 65-66-v_______-________ - 13.3 26.3 28.3 32.1 can be established. The result is a contributory 67-88-___ _ __ --- --- -____ 15.8 34.1 41:otE 43.141.o 69-70-___ _ _ - - -- -_ __ __ __ 16.3 35.6 ii*: accident insurance that is not work-related but 71-72____ __ _ ___ _ _ _ _ _ _ __ 16.8 36.3 39:4 42.4 44.9 73-74---- - _-- -- - -- -____ 17.8 38.0 40.8 43.5 46.8 earnings-related. 75-79--__ ___ -- - - - - - __ __ 18.9 40.0 42.6 45.7 47.5 s-84. __ _ _ _ _ - - - - - - - __ _ _ 19.8 41.2 44.3 47.3 43.6 The two new programs provide for hospital 86 and over ___________ 20.9 41.9 45.4 49.2 47.7 and medical treatment, rehabilitation, and non- taxable cash compensation covering all the conse- carryover provision and more knowledge of how quences of an accident-Chat is, loss of income to file a claim. and physical and emotional suffering. Benefits Since persons aged 65 and 66 were not in the for income loss will be earnings-related, in con- program for a full year, they had less opportu- trast to the flat-rate benefits of the New Zealand nity to reach the deductible than those in the social insurance system. Moreover, liability is next age group. The percentage meeting the de- being liberalized to cover all injuries to wok-kers ductible rose steadily with each age group, and regardless of when or where they occtir. the rise in each year was about the same. For . The cost of the new system is to fall on em- every age group, however, the proportion reach- ployers and the self-employed for the earners’ ing the deductible was higher from year to year, accident compensation program and on motor ve- hicle drivers and owners for the motor vehicle compensation program. In a sense there is a gen- crnl revenue component : medical-hospital bene- fits will continue to be provided by the national health insurance system that is entirely govern- Social Security Abroad ment financed. The Act of 1972 was the end result of a series of reports starting in 1962, which examined the No-Fault Accident Compensation in feasibility of establishing a Government-operated New Zealand* program offering complete coverage for work- accident and occupational disease victims. The New Zealand is introducing a Government- 1 On March 9, 5973, the Government of New’ Zealand operated, no-fault accident insurance program that decided to extend coverage under the Accident. Compen- provides injured workem with a benefit of up to sation Act to nonworking ho&wives and other nonearn- ers (that is, students, retired persons, and the unem- four-fifths of their usual earnings. This is the ployed). As a consequence, the implementation date of latest move in the social field by a country that the schemes was postponed from October 11, 1973, to April 1, 1974. Government sources expect thnt the appro- *Prepared by Elizabeth Kreitler Kirkpatrick, Interna- priate amending legislation will be presented by the end tional Staff, Office of Research and Statistics. of August 1974. BULLETIN, SEPTEMBER 1973 25 most notable of these reports was that of the compensation. This procedure has led to unequal Royal Commission on Compensation for Per- settlements for similar injuries, has overloaded sonal Injury in New Zealand, completed in 1967. the court system, and has militated against It is generally called the Woodhouse Commission prompt’rehabilitation on the part of the injured after its Chairman, Justice A. 0. Woodhouse. worker. The Commission was set up mainly because of Except for suits under the common law, New dissatisf,action with the existing mechanisms for Zealand’s workmen’s compensation system has re- determining responsibility and monetary com- sembled closely the basic form of the system in pensation for injuries suffered by an employee in the United States with employers insuring them- the course of his employment, and by the general selves through private insurance carriers. Only public in a highway accident involving the use work-connected injuries and occupational dis- of a motor vehicle. The warrant establishing the eases have been covered in the past. Compensa- 196’7 Commission, in fact, restricted its investiga- tion has been related to medical expenses, tion to the question of compensation for injuries earnings-related cash benefits, and rehabilitation “arising out of accidents (including diseases) services. Medical treatment in hospitals has been suffered by persons in employment.” It did not provided to workmen’s compensation cases free cover injuries from highway accidents or those of charge under the national health service of workers outside their employment. scheme, and the costs of such treatment have not In the course of its inquiry the Commission been charged back to workmen’s compensation. found it desirable, however, to extend its exami- There is, in addition to the common law proc- nation to all accidental injuries regardless of ess and workmen’s compensation, indirect in- cause or place of injury. The Commission’s final volvement of the Department of Social Security report, which provided the broad foundation for in the payment of benefits to injured workers. the Accident Compensation Act, called for com- First, the Department has provided assistance to prehensive, full-time coverage for all New Zea- many of the disabled and their families because land citizens regardless of how or where they the maximum ceiling on the weekly benefit has were injured. I been NZ $32. This amount is considered too low to maintain a minimum standard of living in a BACKGROUND country where the average weekly earnings of wage and salary earners in 1971 was NZ $59.73 a The new law creates one uniform system for week. Second, as the work-related disability pen- the handling of accident compensation cases in- sion is payable only for a maximum of 6 years, stead of the former variety of ‘methods. Accident the Department of Social Security has had to compensation in New Zealand has been dealt make assistance payments to the disabled when with through the common law process, by the the benefit is terminated. The social security workmen’s compensation program, and by an as- fund is contributing an estimated NZ $2 million sistance program administered by the Depart- a year in such cases. ment of Social Security. All victims of personal injury have been able to sue for damages under common law on the basis of negligence. Those COVERAGE who have been successful receive compensation Under the new legislation, regular members of covering their losses (medical costs, earnings the labor force receive occupational disease and losses, and pain and suffering). 24-hour accident coverage; others are to be pro- As workmen’s compensation has not precluded tected for occupational diseases and work-con- common law action with respect to employment nected accidents only. Wage and salary earners injury in New Zealand, it has been the norm for and the self-employed must fulfill a 12-month seriously injured employees to pursue remedies residence requirement (not necessarily continu- under both processes simultaneously, If the em- ous) to qualify for continuous (24 hour) cover- ployee is successful in common law action, he is age.