New Zealand’s Accident Compensation Corporation (ACC) conducts an annual review of two government economic indices to determine whether client payment rates require adjustment. This cycle, the two indices have moved at different rates, producing diverging outcomes across different parts of the scheme from July 1, 2026. The gross maximum weekly compensation payable will rise to $2,466.20, a 1.97% increase derived from movements in the March 2026 Labour Cost Index (LCI). The adjustment applies to clients who have been on weekly compensation for more than 26 weeks.
Non-taxable entitlements will rise at a faster rate than weekly compensation from July 1, reflecting a 3.08% movement in the March 2026 Consumer Price Index (CPI) against the 1.97% LCI figure. The gap between the two indices means different parts of the scheme are absorbing different rates of cost increase. The CPI and LCI represent ACC’s two primary indexation mechanisms, and their divergence this cycle is the driver of the uneven rate movements across the scheme. Independence allowance and lump sums will increase at the 3.08% CPI rate. The revised grant rates from July 1 are: funeral grants at $8,236.40; survivor’s grants at $8,830.47 for a partner and $4,415.25 for each child under 18 and each other dependent. Weekly childcare payments will be $187.78 for one child, $112.67 each for two children, and $262.88 in total for three or more children.
The interest rate ACC pays on overdue weekly compensation payments will decrease from 5.78% per annum to 4.413% per annum from July 1, 2026. The previous rate of 5.78% per annum remains in effect through June 30, 2026. Under Section 114 of the Accident Compensation Act 2001, a payment becomes overdue when more than one month passes between ACC receiving the information required to calculate a payment and the disbursement itself – a definition that shapes how ACC manages its payment timelines and the financial consequences of delays.
The 0% growth rate recorded in ACC’s long-term claims pool in April 2026 marks a shift in the claims environment against which the new payment rates will operate. ACC’s April 2026 Monthly Turnaround Plan Report, released May 29, 2026, recorded a net reduction of 131 claims in the long-term claims pool (LTCP), bringing the total to 24,715, with return-to-work rates improving across the board. The rate changes and the LTCP movement both reflect the current state of ACC’s compensation obligations. A scheme recording a contracting claims pool faces different cost dynamics than one in which the pool is growing – context that gives the July 1 rate adjustments additional significance beyond the figures themselves.
ACC chief executive Megan Main attributed the April movement in part to a focus on clients with less serious injuries, such as sprains and strains, who have been receiving weekly compensation. “We are focused on improving the things that are in our control and shifting the way people think about their recovery if they get injured. But there is more to do, and everyone has a part to play,” Main said. She also pointed to coordination across the health and employer sectors. “We are working closely with health providers, particularly in primary care, to help improve rehabilitation outcomes for clients and we’re working hard to support employers to engage in their employee's recovery,” she said. The Turnaround Plan, launched in January 2026, was developed in response to an independent review of ACC’s claims management and rehabilitation performance and an updated Letter of Expectation from ACC Minister Scott Simpson. It is built around three priorities: putting clients first with care that leads to lasting recovery, getting New Zealanders back to work and independence, and resetting ACC and returning the organisation to its core functions. Progress reports are published on the last business day of each month.
