Sunday, June 29, 2014

Told to choose between Super and ACC

This is curly. In New Zealand the welfare state forces people to pay for insurance against accidents and their consequences.  There is a dedicated ACC payment which, amongst other things, provides for compensation for a surviving spouse in the case of death.

Super is different. It is paid from current revenue. (Though one could mount a non-legalistic argument that having been taxed at levels that furnish the current Super bill,  ability to make private provision was diminished.)

A man's wife was killed in a car (workplace) accident shortly before turning 65. He is the surviving husband, already retired and 65. He is told after one year he must choose between the ACC payment or Super:

Is superannuation an entitlement or a benefit? Fin Heads has taken a case against the attorney-general over "obscene'' legislation that forced him to choose between his superannuation and his dead wife's ACC compensation. The retired Dunedin plumber tells Bruce Munro about his traumatic five-year battle with the Government to win what would be landmark case, and why he believes some in power hope he will die.

My compliments to the journalist who wrote this up. A complicated story made comprehensible.

I believe Mr Heads is entitled to both. He and his wife had no choice but to pay ACC  premiums. Do you think if he'd read the fine print 30 years ago and didn't like it he could have opted out? No.

And Super is not means-tested.

This case highlights the incompatibilities of our social security and accident insurance system. Even more importantly, the pitfalls of state run compulsory monopolies.

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