ACC boosts payments as injury costs hit new highs

The Accident Compensation Corporation (ACC) has confirmed a series of annual adjustments to client payments, with new rates taking effect from July 1.

These updates follow the agency’s routine review of key economic indicators, specifically the Labour Cost Index (LCI) and Consumer Price Index (CPI), to ensure client entitlements remain in line with broader wage and price trends.

Revised compensation rates set for July 2025

From July, clients who have been on weekly compensation for more than 26 weeks will see a 2.89% increase in their payments. This brings the new maximum gross weekly compensation to $2,418.55.

ACC has also revised non-taxable entitlements, such as lump sum payments and the independence allowance, with a 2.53% increase based on CPI changes.

Updates to grants and allowances

In addition to weekly compensation adjustments, the ACC announced new rates for several support grants:

• Funeral grant: $7,990.30
• Survivor’s grant: $8,566.62 for a partner and $4,283.32 for each dependent child or other eligible dependent
• Weekly childcare support: $182.17 for one child, $109.30 for two children, and a combined $255.03 for three or more children

These revised figures are designed to reflect cost-of-living increases and are part of ACC’s regular recalibration of support entitlements.

Interest rate changes on overdue payments

From the same date, the interest rate payable on overdue weekly compensation will decrease to 5.78% per annum, down from 6.967%.

According to section 114 of the Accident Compensation Act 2001, a payment is deemed overdue if not processed within one month after the necessary information has been received from the claimant.

Rising claim volumes and funding pressures

Alongside these changes, ACC has released its annual report, “Injuries in New Zealand: Insights from 2024,” which outlined the scale and cost of injury claims over the past year.

In total, 2 million new claims were accepted from 1.6 million people during 2024. The agency’s total expenditure on recovery-related services reached $6.9 billion, including $4.4 billion for rehabilitation and $2.5 billion in weekly income support.

The financial burden associated with injury support has grown significantly over the past two decades. In 2004, the total spend was just under $1 billion. That figure has more than quadrupled, reflecting population growth and more complex rehabilitation needs.

James Whitaker, ACC’s injury prevention lead, noted that a relatively small subset of claims – those requiring time off work – account for a large portion of total costs.

“To put it simply, more people are getting injured, and it’s taking longer and costing more for them to recover,” he said.