Source: New Zealand Government
ACC’s Non-Earners’ Account gets a boost both for now and for the future with recent shift to ensure it keeps up with demand, ACC Minister Iain Lees-Galloway says.
“The Government is taking action to address the gap left by previous Governments in the taxpayer-funded Non-Earners’ Account, which covers injury costs for those who are not earning and paying levies, including children, students and retirees.
“There have been no cost pressure increases in this account since 2014, which was unsustainable so we moved to address this as quickly as we could. We will now move to regular adjustments.”
The fund was boosted by a $285 million contribution in Budget 2020 and future gaps will be addressed by moving to a forecast adjustment in this new approach.
Iain Lees-Galloway says the Government is moving the Non-Earners’ Account to a forecast adjustment, in line with New Zealand Super Fund payments. This year’s Non-Earner’s Account contribution has increased from $1.47 billion to $1.76 billion, and this amount will increase by a maximum of 7.5 percent a year to ensure the account improves over time.
“Like the New Zealand Super Fund, the Non-Earners’ Account is an investment in our future. This funding change ensures ACC can meet the costs of claims for injuries which have already occurred, ensuring the scheme can continue to provide for this, and future generations.
“Addressing these cost pressures ensures there is a clearer transparency on the cost of the ACC scheme, and that these costs are not passed on to future generations.”
Iain Lees-Galloway says the Government decided to address the funding gap in the Non-Earners’ Account in December, but it had taken on more importance in light of the COVID-19 pandemic.
“We expect to see a growing call on the Non-Earners’ Account as unemployment increases, and more people move into education or retirement in the short-term. This shows the importance of addressing funding gaps and being ready for a rainy day,” says Iain Lees-Galloway.