Among the raft of changes proposed by the government in its ACC bill (currently being considered by Select Committee), is a miserly provision that injured workers who lose their jobs have to use up their holiday pay before weekly compensation is paid.
So, in addition to losing your job – usually because of the injury or redundancy – you lose the holiday pay that you earned before you were injured.
How mean is this? And what’s the point? The Cabinet paper recommending these and the other changes to ACC says that the estimated savings would be just over $1 million – most of it in the earners account. Savings yes, but paid for by workers’ hard-earned money. The stunningly dumb risk assessment says that :
“Claimants may think its unfair to have weekly compensation abated because of annual leave accrued while they were earning or accrued in a previous financial year but was not paid until termination of employment.”
Even Treasury warned that the relatively small savings didn’t seem to justify the unfairness of the provision.
So, if you take your holidays, you get ACC. If you don’t, because you’re too busy (or hardworking) to take the time off, or you are saving the holiday time to be with your family, forget it.
The truth is that this is just one example of the government’s ACC changes that will shift the cost of the injury to the worker (and the health and welfare system).
After all the debate on this blog in the past few days about so-called welfare bludgers and keeping your own money, I wonder what people think of this one.
That’s disgusting
Especially bad since ACC made that fat profit last year. I mean they’re only going to be getting 80% of their wages as it is.
At a guess, I’d say that the cost of administering it would be over the amount saved.
Heartless bastards!!
Without outing this person I will make it clear that he is not an MP of any sort Trevor
I wonder who ‘MP_Labour’ is…
Really?
Surely even their baby-political advisors would have picked up in the drafts that there is no economic, social or political capital in something like that. Almost lost for words.
You should pass this on to the relevant domestic tourism bodies for comment. If 1/3 of those holidays are used for Domestic travel then all this does is cost the local economies. People on holiday spend more money that normal, so i would imagine the actual lost gst take could be higher than this.
National has always been the Government that isnt able to look at the big picture and consequences of policy to other areas.
Just like business they always look at short term monetary gain.
Doing that is indeed mean. Almost as mean as making elderly people spend down their life’s savings to be eligible for nursing home care benefits, or setting a low assets cap on certain means-tested benefits, like when someone is sick or disabled.
Post #1 Jan 19
MP_Labour says:
January 18, 2010 at 11:24 pm
Heartless bastards!!
Deleted rubbish Warning Trevor . I’m delighted to see that your first contribution to Red Alert is consistent with the rest of the Labour team.
I wouldnt say that it is mean or heartless as it comes from National, it is just consistant with this Governments way of doing things. If it were labour doing it it would be heartless, but does National have a heart in the first place? they do have a mouth piece that it very charismatic, and a few bully boys standing behind him, quite comparable to the destiny church in alot of ways.
Getting off thread Trevor
but does National have a heart in the first place?
I believe it was Churchill who said;
If a man at 20 is not a socialist, he has no heart. If a man at 40 is not a conservative, he has no brain.
So, Waterboy, you’re probably half right.
completely off thread deleted Trevor
Off thread – deleted. Abusive. Final warning. Trevor
Bringing conservative Churchill into the conversation is interesting. You can think the man is great for fighting against the great threat, but FDR and Stalin did also. Those three had dramatically different politics. If you are going to discuss domestic politics, please leave the wartime decisions out of it. agreed Andrew but no need for you to follow off thread stuff Trevor
This thread was about eating up saved holiday time before being eligible for the benefit. You have to set up a ridiculous possibility to show how stupid that plan is. It is easy to do so.
Someone takes a 6-week holiday to Australia, eating up all their saved holiday time. They get back, and after one week they injure themselves and need to apply to ACC. They get the benefit immediately.
Compare with:
Someone is about to take a 6-week holiday to Australia, but get injured and can neither go nor work. ACC forces them to sit at home, injured and disabled, for the full 6 weeks before providing a benefit. Sure, they get paid for that 6 weeks, but they don’t get to enjoy it like the first person did.
Technically, they haven’t taken away the holiday time, but they did remove the freedom about when it can be taken. Not to mention that when people are injured, time off is mainly healing time. They are converting holiday time into sick time.
I thought conservatives were about freedom. What’s going on here?
Post #2 Jan 19
Yes, the old Churchill quote Phil.
All due respect to Churchill, his family had long benefited from its use of the Status Quo, as did Churchill. So naturally Winston would favour conservatism.
Let’s get back to the original question. To take annual leave to pay for ACC is unfair.
Holiday pay is part of an employee’s remuneration, and before an employee can take it, the leave has to be earned. It is a form of pay held by the employer for the employee. So if this measure went through ACC would be taking part of the employee’s salary worth thousands of dollars.
If the same measure was suggested for the personal money of an employee, the money that they had already physically received, it would widely not be seen a reasonable. So how is it different for the holiday pay the employee has earned?
If it not fair for money, it isn’t fair on leave. This measure is draconian. Churchill wouldn’t have accept someone coming after his holiday pay I’m sure.
Get back on thread Trevor
Yeah I commented on this in my submission on the bill. It goes completely against the point of holiday pay and seemingly punishes people who are usually the “ideal employee” i.e. that don’t take a lot of holiday and sick pay.
injured workers who lose their jobs have to use up their holiday pay before weekly compensation is paid.
Can someone please clarify if this is any different to the current stand-down period for the Unemployment Benefit?
It sounds like pretty much the same thing to me.
Can someone please clarify if this is any different to the current stand-down period for the Unemployment Benefit?
It sounds like pretty much the same thing to me.
A person’s employment involves a degree of personal choice and responsibility*. I have never used this facility, but I believe if a person loses their job through no fault of their own (laid off), the stand-down period is not considered. If the person chucks in their job, or lost their job through misconduct, a 13 week non-entitlement period is imposed.
If the employee is fired for no reason during the first 90 days of a job, then there is no non-entitlement period.
Back to ACC – People do not plan their injuries: they just suffer accidents. Their state is not a matter of free choice, why punish the victim?
*In the case of the Unemployment Benefit Student Hardship, which you may be thinking of, the subject goes through an initial stand-down of up to a maximum of 2 weeks after the entitlement date. I’m not sure why there is the stand down, it may have something to do with the transfer of an individual student between the period of being covered under student allowances (should they be eligible), and period of being covered under unemployment benefit. A person can’t both be a student and unemployed.
When you take out insurance for home, car etc, you get a choice of excess/deductable. The higher the excess, the lower the premium. But also the higher the excess the further away from 100% of your loss that is covered if you need to claim.
It works the same way for the sort of insurance that covers your pay if you can’t work for some reason – you can agree to a longer period before this kicks in and pay a lower premium as a result. But that could result in a significant ’stand down’ period – perhaps as much as 3 months – before payments commence.
When one is paying for insurance oneself you take all the factors into account and decide what is the best match.
ACC as a product is no different to this – it’s an insurance scheme to cover for misfortune.
If people were paying for it themselves I doubt whether many would want to pay the premiums associated with getting 100% of their pay immediately. They’d choose a less costly option on the understanding that if something went wrong they’d not be fully covered. But, hey, it’s a risk you take. Insurance to cover just the amount of downside you can’t bear rather than absolutely everything is a very valid option to take.
The way in which ACC is funded means that a large proportion of society is getting coverage far beyond what they’re paying for (or would be prepared to pay for in a commercial arrangement). Is it not surprising, then, that where such a situation exists there’s some level of outcry when it is suggested that coverage is moved from ‘Platinum’ to ‘Gold’?
Ah broad spectrum coverage, just what we need!
@George – you sound like you’ve been listening to Nick Smith. ACC is not an insurance scheme. It’s a social contract, where New Zealanders gave up the right to sue in exchange for an agreement that if they are injured they would be taken care of through rehabilitaton and compensation for loss of earnings. There’s nothing “gold” about a worker getting their holiday pay that they earned before they were injured. It’s a tiny savings compared to the whole scheme, but it’s huge for people who are injured and trying to survive on 80% of their earnings.
@Darien
Excellent point about what ACC is. Removing the right to sue dramatically reduced the value of a law degree in this country.
I would also be interested to know if a person could take the value of their vacation time in a lump sum before they apply to ACC for the benefit. I know if I were faced with that, I would do this before applying.
Post #1 Jan 20
@Darien – I think this is the sort of attitude that’s being discussed on another posting to this blog…
‘Taken care of’ can equally be defined as having 70% of earnings, or 90% of earnings or 101% of earnings.
As normal you see it as being the gilt-edged version.
Some others (who, of course, know nothing and need to be made aware of this very clear fact) see it as somewhere less generous and more affordable.
@George – is “attitude” disagreeing with you? Because if it is, you disagreeing with me is attitude as well.
Generous? a lot of people struggle on 80% of their wages.
I like Darien’s “attitude”
@ Darien : No, attitude isn’t disagreeing with me. Attitude is commencing your reply to my post with the patronising words : “you sound like you’ve been listening to Nick Smith”. Ok? Is that clear enough? That sort of arrogance is what has alienated me (and I dare say many others) from the party I once supported.
And, at the end of the day, I don’t need your vote, so have no need to persuade you of anything. You need mine, so need to engage me. That’s if you and your buddies are serious about listening to what ordinary people are thinking.
@ George
The ACC levy pays for this. It is a percentage, meaning those on a higher income pay more, and when they are injured they get more.
If the ACC levy doesn’t pay for the whole programme, so what? In this society, everyone who works pays taxes.
And if rich people subsidise poorer people’s ACC, why do you oppose that? If you do, you’ll soon be opposing progressive taxes and arguing for a 15% GST and flatter income tax system. Oops! National is already going that way!
Darien’s mentioning Nick Smith was simply a shorthand for your reasoning and the policy conclusions you were coming to. It was not a curse or put down. It may have been a polite way of saying you’ll find more support for that position on another blog. Possibly the National blog. If Nick Smith talks that way, the shoe fits.
@George – don’t be so sensitive. There’s nothing patronising or arrogant about what I said. What you said is exactly what Nick Smith’s been saying for a year now and in doing so, deliberately misleading everyone into believing ACC is broke and needs radical change.
And sorry, I am listening to what “ordinary people are thinking” including the thousands of “ordinary” low paid workers I worked with before I became an MP and who expect me to represent their views as well as listen to yours. And if I wasn’t interested in engaging, why would I be responding to you at all?
Sorry Darien, but I think Labour needs to get off its high horse when it comes to the disaster we call ACC. So you should be forced to use your holiday pay or annual leave before you get ACC as how many of us actually pay our way when it comes to the cost of potential accidents? They don’t call it the average wage for nothing. Further, you have to use your holiday pay/annual leave owing before you get any other kind of State assistance (including parental leave) so why not ACC. Bottom line, ACC has gone so far left of an insurance scheme that it practically part of the welfare system. Employer’s will never let the original Woodward model come to life and we can’t afford the model we have now……even if you trim the fat off the bloated bureaucracy & get their snouts out of the trough. Thus, user pays of some kind or another is inevitable. As stated in a post to Lianne’s blog, in 2007 ACC increased the transport levies by 100% with practically no public consultation, outside the media’s radar and gave us all only 10 weeks to come up with what amount to be several thousand dollars in extra levies. Apparently this was to make the employer’s and self-employed levy accounts more of a level playing field. HOWEVER, the result was that I am now paying $1.47 per $100 that I earn MORE than an employee doing exactly the same job, even after their employer contributes a miserly $0.78 per $100. There is nothing fair about this. So my feelings are that people need to stop expecting to be supported from the cradle to grave & start paying their own way a bit more. Why should I have to pay for my colleagues; pay peanuts you get monkeys – how is it my fault that they have an accident at work? Yes to a degree, in a humane society people in the higher income bracket should always help those struggling, but I think NZ has gone too far for too long. ACC particularly is often unfair and inconsistent in the way that it decides who gets what. Time to tighten the purse strings I say and force people to rely on their own two feet a but more.
Employer’s will never let the original Woodward model come to life and we can’t afford the model we have now……even if you trim the fat off the bloated bureaucracy & get their snouts out of the trough.
ACC paid out $3.1 billion last year, it collected $4.2 billion, and the remaining $1.1 billion can add to the $10 Billion ACC has in investments, which will keep the corporation on track to being Fully Funded in 2014. The National party pushed for between 2005-2008.
The largest myth the National party has created about ACC is that the corporation is bankrupt. It isn’t, it is solvent, going to be more solvent, and functioning well.
Also, the administration costs of ACC is fractional in relation to what is paid out to claimants, which is not the case with private insurance companies with stock holders. The cost associated with that would be roughly equivalent to the money paid out to claimants. That cost is known as profit.
@ Sean: I am not quite sure what your point is, especially since you are on a Labour blog site – a party that is all for a fully funded ACC. If you are disagreeing with my observation that the public service is well & truly bloated beyond capacity, well articles like this tend to back me up: http://www.nzherald.co.nz/ministry-for-the-environment/news/article.cfm?o_id=116&objectid=10603391&pnum=1. The senior staff at ACC have done very well out of our hard earned taxes.
For me personally I don’t care how Labour & National debate the financial status of ACC, all I know is that ACC continue to make recommendations that the government of the day continue to agree to, all of which result in less money in my pocket for me to support my family. As for my comment on Woodward – Derek Quigley’s committee in the early 1980s resulted in many changes from the original model and led to what we know & love as the ACC of today. This committee came about because of employers lobbying that the Woodward system unfairly targeted them.
@Self-employed
I think that the when someone refers to the Woodward version of ACC, they refer to the principles behind the scheme. The current version is very different from the original scheme and no one is denying that at all. But the principles behind the scheme should still be the most important part of the scheme. It is not an insurance scheme.
As for the ‘bloated public service’:
Those who are paid high salaries in the public service are the people who hold great responsibility. One should be paid in accordance with the responsibility, over money, people etc, that they have. Also, the public service has to compete with the private sector for competent employees, particularly staff at a high level. Most people won’t go into the public service because they’re doing a service to the public – its because of the money (which is generally why people work anyway!). If the public service pays pittance, it will get incompetent employees who have huge responsibility and could potentially mismanage public funds and become less productive. However, if the service pays more and attracts people up the ladder in the corporate world – chances are they will be more experienced with the responsibility, and deserve to be paid for that. Productivity might go up with better paid managers – wouldn’t that be nice, eh? You like productivity, don’t you Self-employed.
Also, a note on Churchill (and don’t delete it Trevor – I know its off topic, but its interesting):
Churchill at various social and developmental problems throughout his life, largely because his father ignored him throughout his childhood. He was highly competitive and a bit selfish – if he lost whatever he would become depressed (i.e. at the end of the ANZAC campaign). He replaced the lack of love from his father, with an insatiable desire for political power. He was overtly nationalist and parochial. He, in reality, had no political backbone. He swapped sides in the house of commons several times and in fact said this about the tory party: “the Party of the rich against the poor, the classes and their dependents against the masses, of the lucky, the wealthy, the happy, and the strong, against the left-out and the shut-out millions of the weak and poor.” This was despite coming from the gentry and being a natural tory.
He also officially sanctioned the following atrocities throughout his career as a politician:
1. Forced repatriation of two million Russians to Russia, every single person died in the purges.
2. Consenting to the enslavement of Romanians to work in the coalmines of the Soviet Union, •Why are we making a fuss about the Russian deportations in Rumania of Saxons [Germans] and others? . . . I cannot see the Russians are wrong in making 100 or 150 thousand of these people work their passage. . . . I cannot myself consider that it is wrong of the Russians to take Rumanians of any origin they like to work in the Russian coal-fields.Ô 500,000 German civillians were enslaved.
3. Expulsion of fifteen million Germans who lived in East and West Prussia, Silesia, Pomerania, and the Sudetenland, as part of Churchill’s desire to recreate Europe.
4. Czech leader, Eduard Benes, plan for an ethnic cleansing of Bohemia and Moravia that cost the lives of two million Germans.
5. He favoured the use of Chemical warfare on the •uncooperative ArabsÔ in Iraq.
6. “I am strongly in favor of using poison gas against uncivilized tribes.”
7. “I do not admit that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race, has come in and taken their place.”
8. 1,400,000 casualties caused by carpet bombing Germany.
9. Proposed dropping anthrax across Germany to poison the German population.
And he also contributed to the beginning of the cold war when he made his Iron Curtain speech in Independence, Missouri.
I can’t be bothered giving you the sources…. but its all verified etc. Most of it I copied out of an essay I wrote a while back…
(Please don’t delete it Trevor! Its not off thread because people were talking about Churchill…)
Wow. OK. Reading that back it seemed as if I said that his selfishness caused depression. I didn’t mean that at all. Selfishness is the wrong word. He was “a bit up himself” and this meant he struggled with getting things wrong. If he did get things wrong, he would become depressed. Also, the dots and the random capital O things are quotation marks – the word processor wasn’t working properly when I typed it.
Sean: I am not quite sure what your point is, especially since you are on a Labour blog site – a party that is all for a fully funded ACC.
Sorry Self_Employed, I’ll try to make my self clearer.
My point is in 2008, National agreed with what was happening in ACC under Labour in general. Now there is an emergency – apparently. This emergency that ACC is bankrupt is against actual facts of its actual cash flows, it is almost as if Dr Smith started in 2009 to try and prove ACC is collapsing no matter the facts.
In doing so, he has demonised the ACC, wrongly.
. If you are disagreeing with my observation that the public service is well & truly bloated beyond capacity, well articles like this tend to back me up
As for the ‘New Zealand herald’ article, thanks for the link showing the increase of Public Servant costs under the National ACT government. Reading it closer, this article seems to indicate that 10% of the 45,000 public servant work force earned over $100,000 a year. Which indicates 90% of public servants receive less, from my knowledge, the majority of public servants receive much less.
The anecdotal evidence presented by the article indicates that the biggest salaries, and salary increases are those of the heads of departments and ministeries (that is around 13 people), plus a number of specialists who bring the number up to 30 of those receiving over $300,000. This number includes highly skilled specialists.
This does mean the article is raising ire against the entire public service based on the salaries of the top 0.0006% of the public service work force. That is hardly a fair.
Sean that was one article, of which there are many by-the-way, to demonstrate how exorbitant some of the salaries our public servants get. This top tier of public servants are no doubt highly qualified and very deserving of their high salaries. My problem is the extent to which their salaries have increased over the last few years and in particularly, the last financial year when we were faced with a tough economic climate where jobs are being cut and so on.
As for your observation that National supported everything pertaining to ACC that Labour implemented, well they didn’t and in fact, if you go back through parliamentary records you will find that there were many things that they disagreed with – including the recommendations to increase transport industry’s levies by 100% – something which affected me personally. I wonder how much you would defend Labour’s views on ACC if it was you that was given 10 weeks notice to pay $3000 more in ACC levies on the same income you had earned the previous year. Things like this are not good for business.
As for National’s claim that ACC is bankrupt etc – I am with you on that and it is just another example of MPs twisting the facts to suit their political agendas. It seems to me that their claim to look after hard working New Zealanders is fairly disingenuous.
So yes, I am more than happy to see ACC overhauled and replaced with a model that is more consistent, fair and more oriented towards some kind of user pays.
@Self-employed : curious as to what your self-employment is, given your comments about ACC levy increases in the past. It would help me put your comments into some kind of context. And would be interested to know more about what you mean by “oriented towards some kind of user pays.” And I’m absolutely on your side when it comes to some of the salary increases paid to CEOs in the public sector – but to be fair – also the private sector – Reynolds of Telecom for example.
BTW it’s the Woodhouse principles. It’s worth looking back to see what the “ordinary working man” had to fall back on if they were injured at work before we had ACC. It’s also worth reading the Price Waterhouse Coopers review commissioned by the ACC Board in 2007 to evalute the economic and social return on investment of the ACC scheme and its sustainability – and you will see why Labour continues to defend the current scheme.
Darien I am in the transport industry – I would have thought that was quite clear given my anger about Labour implementing ACC’s recommendations to increase our levies by 100% in 2007. And I am cross about road users too – but National have done the same this year without anyone blinking an eye so I won’t harass you about those!
As for life before ACC – being born in the 1970s I have no personal recollection. However, I do know it was essentially every man for themselves.
Do I want to see the non earners account privatised? Of course not. However, opening the Workers Account may have some benefits. If the benefits are outweighed by the costs (such as the potential limitations for private insurers to pay long term claims) then I would like ACC to actually do something that benefits people like me, instead of charging us more so they can hand it out to others.
If you don’t like these ACC recommendations, then what do you actually propose?
I know that I would like to be paying the same rate as what an employee doing the same job as me pays – especially since they are in the bottom income bracket and well, why should I have to pay the price of what is quite often, their stupidity?
Another thing is that you could link the ACC levies up with CVIU checks so that we can get a rating – those who play by the rules and keep their trucks in good working order get a discount similar to the one you get if you complete the safety courses (about 10%).
I would also like to be rewarded for not being involved in accidents – why can’t we be insured for our risk?
At the very least, the “no fault” policy has to be tweaked as some people are at fault and we should not have to pay their consequences – such as Graeme Burton. He lost his leg because he is a psycho, why should he get a new one? Why should I have pay for something that wasn’t even accidental AND was incurred while committing a crime?
I will have a look at the report however, there is no way in hell I am ever voting Labour again until I see something concrete by way of tax proposals (dropping tax rates and tightening loop holes) and ACC changes that show me I am going to get my monies worth.
Mind you I put children first so if Labour said that preventing child abuse was its number one priority, well then I could be persuaded to come back as the economic costs on us as a society while we continue to let this happen, including the costs on ACC, prisons & health sector, are enormous. Making sure our future adults are safe and worthwhile citizens will save us all money and would mean we could all have the tax cuts we want.
@self employed – I think you’re right about tweaking the way things work.
The idea that you get a five star service even if you have a number of self inflicted accidents (falling downstairs when paralytic, for example) doesn’t seem right to the average person. Again it’s a case of a good idea being taken too far. There *should* be some reward for being prudent in how you behave, and there *should* be some penalty for being foolhardy. The rest of us shouldn’t be picking up the bill for the lack of responsibility of the few.
@self-employed – thanks for that. I knew you were in the transport industry, but it’s a big industry, and your post made it clearer that you are in trucking. I’m very interested in the self employed and particularly in your industry, so that’s why I asked. I know its tough for you and I understand why you get annoyed. The problem with attributing some kind of fault is it’s limitless. In Australia, there are schools that won’t let kids do sports because of accident liabilities. Your idea about the CVIU checks is worth looking at and I’m going to go back and have a look at the self employed levies in 2007 and see what happened. As for Graeme Burton – we were all repulsed by that. ACC could have applied to the court to not give him treatment under the repugnant to justice provisions in the Act. I don’t know why they didn’t.
And agree about child abuse. It’s a deep scar on our society.
Thanks Darien, great that you’re validating where I am coming from, even if you don’t agree. Btw, I’m not the truckie, I’m do the accounts. I write on my husband’s behalf as he is the one out there slogging his guts out trying to make us a living.
We are one of the lucky ones who earn a decent standard of living – not common in the freight industry, but things like taxes, ACC levies & road users constantly going up do hit us where it hurts & I get angry because the bulk of these guys earn around the $50-70k margin supporting families and quite often the spouse then has to work which for the transport industry means the kids are palmed off to family, friends, neighbours, after school programs etc.
Things are just not working: 10 years ago you could have bought our house (an average house in a very average area) for about $180k on $80k or so which is easily affordable. The same house 3 years ago cost us $300k. Yes it is still affordable as it is still within 30% of our income, but for most people it is not yet our house is not even an ‘expensive’ house in this day and age and it is not even at the average house price! It is just not right.
As for the ACC changes in 2007 – it was apparently to even out discrepancies between the employer and self-employed accounts. What it meant is the the transport companies bill went down and ours went up. Not fair at all. I wrote in and complained. Received a letter from Ruth Dyson which said nothing to make me feel that an employee doing the same job was paying $1.47 less per $100 of income than what I was paying.
In terms of your example with Australia – why do we always have to go to the extreme? Surely we can have a balance so that things are fair and consistent? There has to be a way!!!!