What is ACC? — New Zealand's No-Fault Scheme

What is ACC?

The Accident Compensation Corporation (ACC) is New Zealand's universal no-fault accident insurance scheme. It provides comprehensive cover for personal injury resulting from accidents, regardless of who was at fault. In exchange, New Zealanders largely cannot sue for personal injury — the scheme replaces common law claims with a statutory entitlement system.

Key Principles

No-Fault Cover

Anyone injured in an accident in New Zealand — citizens, residents, visitors — is covered. You do not need to prove someone else was at fault to receive compensation and treatment.

Comprehensive Entitlements

Cover includes: treatment costs (GP visits, surgery, physiotherapy), weekly compensation if you cannot work, lump sums for permanent impairment, rehabilitation support, and home help.

Social Contract

In return for universal no-fault cover, New Zealanders give up the right to sue for personal injury (with limited exceptions for exemplary damages). ACC levies fund the scheme — paid by wage earners, employers, and vehicle owners.

Who Pays for ACC?

ACC is funded through levies:

• Earners' levy: Deducted from wages and salaries (currently 1.53% of taxable income for the Work Account plus 0.08% for the Earners' Account).
• Employers' levy: Paid by businesses based on their payroll and industry risk classification.
• Motor vehicle levy: Included in vehicle licensing (registration) and petrol tax.
• Self-employed levy: Self-employed people pay a combined levy covering both earner and employer components.

What ACC Covers

ACC covers personal injury caused by:

• An accident (any sudden event)
• Work-related gradual process, disease, or infection
• Treatment injury (complications from medical treatment)
• Sexual assault or abuse (sensitive claims)
• Certain occupational diseases (e.g., asbestos-related conditions)

ACC does NOT cover: gradual age-related conditions, illness or disease unrelated to work or accident, congenital defects, or injuries from self-harm (with some exceptions).

Key Legislation

The scheme is governed by the Accident Compensation Act 2001, which sets out the legal framework for cover, entitlements, and the dispute resolution process.