ACC’s Turnaround Plan report for May, published 30 June, records a second consecutive monthly fall in the long-term claims pool. Set against that improvement is a structural shortfall ACC itself has quantified: an outstanding claims liability of approximately $63.6 billion against assets of roughly $53.8 billion, a gap of around $9.8 billion that internal Turnaround Plan papers ACC released on May 4 indicate could widen materially by 2030 absent further intervention.
The long-term claims pool, defined as clients receiving weekly compensation beyond 12 months, dropped by 68 claims in May to total 24,647, a monthly growth rate of -0.1%. The annual target is to cap the pool at 24,000. This follows flat growth in April and a 0.3% rate in March, the latter described by ACC at the time as a decade low. ACC’s own Turnaround Plan analysis shows the share of clients still receiving weekly compensation a year after injury has climbed from roughly 5% a decade ago to roughly 9% now. Chief executive Megan Main connected the latest figures to that pattern. “What we have seen over the past few years is rehabilitation costs increasing and more people with less serious injuries staying on the scheme for longer. For scheme sustainability, we need to better support those clients who have injuries that historically wouldn’t need such a long period of support. That’s where our current focus is,” she said.
Of the four return-to-work benchmarks tracked, only one met its 2025/26 goal. At 28 days, 36.5% of clients had returned to work or independence against a 37% target; at 10 weeks, 62.1% against 63%; and at nine months, 89.6% against 91%. The one-year measure came in at 92.2%, ahead of its 92% target. ACC’s 2030 ambitions for these same four points are 41%, 68%, 93%, and 95% respectively. Year-to-date new claim registrations stood at 2,109,428, below the full-year budget of 2,128,987.
ACC’s 2025 Annual Report breaks the liability picture down by account. As of June 30, 2025, the Work and Motor Vehicle Accounts held funding ratios above the 100% policy target, while the Earners’ Account and non-levied accounts sat below it. The report’s cost-gap table records a $949 million shortfall for the Earners’ Account in the 2025/26 levy year, against $576 million for the Work Account and $457 million for the Motor Vehicle Account – meaning income in each falls short of covering that year’s new claims on a lifetime-cost basis, with the Earners’ Account furthest from balance. That deeper imbalance lines up with the levy schedule already confirmed for the period, in which the Earners’ rate rises proportionally more steeply across the three years than the Work rate, detailed below.
The Annual Report states that compensation, rehabilitation, and treatment payments have more than doubled in a decade, with the rate of increase accelerating over the last three years, and that maintaining this trajectory would see payments double again within six years. ACC’s board calls the trend unsustainable and states it “considers this performance is unacceptable,” while crediting steps taken in 2024/25 with making some headway on stabilising outcomes.
Within the May figures, social rehabilitation savings reached $114.9 million year to date against an $82 million target tied to a planned 5% reduction in in-year costs, while elective surgery spending sat $51.6 million under budget. These figures are modest relative to the scale of underlying cost growth: annual social rehabilitation spending has risen from approximately $514 million to $1.4 billion over 10 years and is now the single largest driver of projected future liability, while elective surgery costs reached $671 million last year, up about 35% over two years, with more of those patients subsequently shifting onto weekly compensation.
These figures predate and are unaffected by the May results; Cabinet confirmed levy rates for the three years to 2027/28 back in December 2024. The average Work levy climbs from $0.63 to $0.66 per $100 of liable earnings in 2025/26, then to $0.69 and $0.72. The Earners’ levy moves from $1.39 to $1.45, then to $1.52 and $1.59 – a steeper proportional rise consistent with the Earners’ Account carrying the largest cost-gap shortfall. The average Motor Vehicle levy increases from $113.94 to $122.84 per vehicle, then to $131.94 and $141.69.
The same round confirmed revisions to ACC’s Accredited Employers Programme, through which roughly 459 to 475 large employers manage their own work-injury claims in exchange for a reduced Work levy of up to 90%. Updated administration fees, discount settings, stop-loss thresholds for high claim frequency, and high-cost claims cover limiting exposure to single large claims were confirmed alongside new Partnership Discount Plan options allowing employers to take on longer claims-management periods. ACC’s guidance, effective from April 1, 2025, frames the changes as intended to improve oversight of programme performance and enable a more proactive response to underperformance.
The Turnaround Plan, launched in January, followed an independent review by Finity Consulting Ltd commissioned after the December 2024 levy decisions. MBIE’s summary states the review found ACC had lost operational focus over time, with inefficient claims management and weakening rehabilitation support, and that an earlier case management change had failed without the resulting concerns being addressed. The review also identified weak performance incentives and accountability gaps across the organisation.
Main said ACC’s mandate extends beyond the monthly scorecard. “Our responsibility is to support our clients while they recover from injury and to rehabilitate them back to being work ready – every day our people are focused on doing just that – helping thousands of New Zealanders back to independence,” she said. ACC releases Turnaround Plan progress reports on the last business day of each month. The June report, expected in late July, will close out the 2025/26 financial year and provide the first full-year assessment against the targets set in January, ahead of further discussion on funding and levies for the remainder of the 2025-2028 cycle.
