Introduction

GST is increasing to 15% on 1 October 2010. The Department of Labour and ACC are consulting on behalf of the Minister for ACC on the following regulations, proposing to increase amounts payable to reflect the rise in GST:

1. Injury Prevention, Rehabilitation, and Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003; and
2. Injury Prevention, Rehabilitation, and Compensation (Ancillary Services) Regulations 2002.

The purpose of this proposed change is to make sure that the amount being paid by ACC does not decrease as a result of the change to GST.

Context

GST increase

The Taxation (Budget Measures) Act 2010 recently increased GST from 12.5% to 15% taking effect on 1 October 2010.

The GST increase will affect amounts paid by ACC under these regulations because the regulations refer to amounts inclusive of goods and service tax.

Proposals

1 Injury Prevention, Rehabilitation, and Compensation (Liability to Pay or Contribute to Cost of Treatment) Regulations 2003 [the Cost of Treatment Regulations]

ACC pays for treatment under both regulations and contracts. The amounts that ACC is liable to pay for treatment provided under the Cost of Treatment Regulations are GST-inclusive.

Clause 1, Schedule 1 of the Accident Compensation Act 2001 describes ACC's liability to pay or contribute to the cost of treatment for covered personal injuries. Under this clause:

1. if a contract or agreement exists for the treatment provided, ACC must pay or contribute to the extent required or permitted under that contract or agreement
2. if no contract or agreement applies, ACC is liable to pay or contribute to the extent required or permitted by regulations
3. if neither contract, agreement or regulations apply, ACC must pay or contribute to the cost of the treatment that is appropriate to the circumstances, and as agreed by ACC and the treatment provider.

Under the Cost of Treatment Regulations, costs for specified treatments are payable to audiologists, counsellors, dentists, radiologists, providers of hyperbaric oxygen treatment, medical practitioners, nurses, medical specialists, and specified treatment providers (acupuncturists, chiropractors, occupational therapists, osteopaths, physiotherapists, podiatrists, and speech therapists).

The Cost of Treatment Regulations also describe any limitations, conditions, or further descriptions in relation to prescribed costs.

The Department of Labour and ACC propose to update the Schedule of the Cost of Treatment Regulations to align with the increase in GST. The increase means that the prices will go up by 2.222% from the current amount specified in the regulations. The table in the attached Appendix outlines the current GST-inclusive rates and also the proposed rates with GST at 15%.

Other changes to the Cost of Treatment Regulations are being considered. Proposals that arise from that consideration will be consulted on in early 2011. Please restrict your comments in this consultation to the GST increase only.

Proposed Change 1: increase the amounts payable under the Cost of Treatment Regulations to align with the rise in GST.

 

2 Injury Prevention, Rehabilitation, and Compensation (Ancillary Services) Regulations 2002 [Ancillary Services Regulations]

The ancillary services that ACC is liable to provide (or contribute to) are prescribed in the Ancillary Services Regulations.

Clauses 3 and 11 of Schedule 1 of the Accident Compensation Act 2001 describe the services that ACC can provide that are "ancillary" to a claimant's treatment and rehabilitation.

Ancillary services are services that facilitate rehabilitation, including accommodation, transport, escort and support persons and are provided for in the Ancillary Services Regulations. Some of the ancillary services, such as pharmaceuticals, laboratory tests, and complementary and alternative medicines are provided outside of the regulations under Clauses 3 and 11 of Schedule 1 of the Accident Compensation Act.

Clause 11 of Schedule 1 of the Accident Compensation Act reflects the intent that ACC must reimburse the actual or reasonable costs that are incidental to rehabilitation. Clause 11 provides that ACC must pay, or contribute to, the cost of any services reasonably required by the claimant as an ancillary service related to their rehabilitation.

2.1 Non-emergency transport contributions - private motor vehicle or other transport

Under the Ancillary Services Regulations, ACC's liability to contribute towards the cost of non-emergency transport to rehabilitation by a private car (regulation 8) or other non-emergency transport such as a taxi (regulation 11) is prescribed at $0.28 per kilometre where the claimant travels more than 20 kilometres within 14 days after suffering the personal injury, or travels more than 80 kilometres within any calendar month. This support is to assist claimants in accessing rehabilitation.

If the amount payable were to be increased to include 15% GST, the rate would increase from $0.28/km to $0.286/km.

Proposal 2.1: increase amount payable for non-emergency transport (private vehicle) to $0.286/km

 

2.2 Non-emergency transport contributions - public transport or other transport

ACC is liable to pay the costs of non-emergency scheduled surface public transport (such as a ferry, bus, train, or water taxi) to get to rehabilitation. Under regulation 7(1)(c) of the Ancillary Services Regulations ACC is liable to pay these costs if the claimant spends more than $45 on scheduled surface public transport within any calendar month for rehabilitation.

Regulation 11(2)(c) provides that ACC is liable to pay $0.28^[1] per kilometre towards the costs of other transport (such as a taxi, hire car, non-scheduled shuttle, or non-scheduled water taxi) if the claimant spends more than $45 on other transport within any calendar month for rehabilitation.

The proposal is to increase these amounts from $0.28/km to $0.286/km and from $45.00 to $46.00 (inclusive of GST) spent on scheduled surface public transport or other transport within any calendar month.

Proposal 2.2: increase amount payable to $0.286/km if the claimant spends more than $46.00 for scheduled surface public transport or other transport within any calendar month

 

2.3 Accommodation costs

Under regulation 14 of the Ancillary Services Regulations, claimants (and their support people and escorts) are entitled to support for accommodation costs where, due to transport availability they cannot return home after rehabilitation. In such cases ACC is liable to contribute $56.30 per night, irrespective of whether the claimant stays in a motel or hotel or with friends or family.

The proposal would increase the accommodation amount from $56.30 to $57.55 per night 15% GST-inclusive.

Proposal 2.3: increase amount payable for accommodation costs to $57.55 per night

 

Consultation Requirements

The Accident Compensation Act 2001 (section 324) requires that the Minister consult persons or organisations he considers appropriate before making recommendations for regulations. In addition, any regulations relating to the costs or conditions of payment for rehabilitation require a recommendation from ACC.

How to give feedback

Your opinion is sought on the proposed regulation changes. If you would like to have your views taken into consideration, please respond using the following form. If you require additional pages, please add them to the form clearly stating which proposed change you are giving feedback on.

No other matters relating to the Cost of Treatment Regulations or the Ancillary Services Regulations will be taken into consideration for this consultation process.

Where to send your submission

Email: info@dol.govt.nz

Post:
Consultation on changes to GST-inclusive regulations
Accident Compensation Scheme Policy
Department of Labour
PO Box 3705
Wellington

Closing date for submissions

Submissions must be received by 5pm on 20 August 2010. No extension to this timeframe is possible if the proposals are to take effect by 1 October when the GST rate increases.

Official Information Act

The Department of Labour and ACC are subject to the Official Information Act 1982, which means that your submission may be made available to those seeking information under that Act.

Next Steps

Once the consultation closes, a report on the submissions will be prepared for the Minister for ACC to aid his decision making. The report will subsequently be made available on the Department of Labour's website.

Thank you for your participation in this consultation.

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