ACC and age discrimination at 65
HEADS v ATTORNEY GENERAL  NZHRRT 12 (17/4/2015)
This case looked at the question of whether ACC compensation for someone whose spouse or partner died from a fatal injury was affected if they received New Zealand superannuation.
In Heads v Attorney General, Mr Heads claimed that this amounted to age discrimination and could not be justified.
If a person who is covered for personal injury dies from a fatal injury, the Accident Compensation Corporation (the Corporation) is liable to pay five years’ weekly compensation to their surviving spouse unless the spouse qualifies for New Zealand superannuation (NZS). In such circumstances, they are only entitled to compensation for twelve months. The balance can only be accessed if the surviving spouse elects to receive weekly compensation rather than NZS – in which case, they will not receive superannuation for the four years during which they are receiving ACC.
The issue for the Tribunal was “… whether the requirement that a superannuitant surviving spouse elects between weekly accident compensation on the one hand and New Zealand superannuation on the other, breaches the right to be free from discrimination on the grounds of age”.
Relevant provisions of the Accident Compensation Act
Mr Heads claimed that clause 68 in Part 4 of Schedule 1 of the Accident Compensation Act 2001 (AC Act) is discriminatory as it does not permit persons who are 65 or over to be paid weekly compensation for five years unless they elect to forgo NZS after one year. Clause 68 provides:
“Relationship between surviving spouse’s or partner’s weekly compensation and New Zealand superannuation
(1) Subclause (2) applies to a surviving spouse or partner who—
(a) is entitled to weekly compensation immediately before reaching New Zealand superannuation qualification age; and
(b) has been entitled to it for 12 months or longer before reaching that age.
(2) Such a surviving spouse or partner is entitled to the weekly compensation if he or she makes an election to be entitled to it, rather than to New Zealand superannuation.
(3) Subclauses (4) and (5) apply to a surviving spouse or partner who becomes entitled to weekly compensation—
(a) within 12 months before reaching New Zealand superannuation qualification age; or
(b) on or after reaching New Zealand superannuation qualification age.
(4) Such a surviving spouse or partner is entitled to the weekly compensation for a period of 12 months following the later of—
(a) the date of reaching New Zealand superannuation qualification age; or
(b) the date of entitlement to weekly compensation.
(5) The surviving spouse or partner then continues to be entitled to the weekly compensation if he or she makes an election to be entitled to it, rather than to New Zealand superannuation.
(6) Nothing in this clause entitles a surviving spouse or partner to weekly compensation if he or she is not otherwise entitled to it under this schedule.”
Under section 20L of the Human Rights Act 1993 (HRA), the Government is obliged to comply with section 19 of the New Zealand Bill of Rights Act 1990 (NZBORA) – the right to freedom from discrimination – unless the justified limitation in section 5 applies. Age is a prohibited ground of discrimination.
The one benefit principle
The Crown submitted that the one benefit principle meant that no person can be in receipt of two forms of publicly-funded income support. It follows that clause 68 of Schedule 1 simply ensures that no person – irrespective of their age – receives two forms of publicly-funded support. In this respect there is no discrimination as everyone is treated equally.
The test for discrimination
The Tribunal applied the test for determining discrimination outlined in Ministry of Health v Atkinson  NZCA 184. Namely, there must be:
• differential treatment or effect as between persons or groups in analogous or comparable situations on the basis of a prohibited ground of discrimination; and
• a discriminatory impact, that is, the differential treatment must impose a material disadvantage on the person or group differentiated against.
Whether there is different treatment requires selecting an appropriate comparator.
Mr Heads submitted the affected group are surviving spouses who qualify for NZS and are forced to choose between receiving weekly compensation or superannuation. The comparator group therefore are surviving spouses entitled to weekly compensation before becoming entitled to NZS and who fall outside the scope of clause 68. The Crown’s approach was more restrictive. It argued that the affected group were those within clause 68(3) (b) and the comparator group consisted of anyone else covered by clause 68; i.e. clause 68(1) and (2) and clause 68(3)(a).
The Tribunal dismissed the Crown’s submission because the comparator group consisted of groups with different entitlements. The Tribunal emphasised that the case concerned not the simultaneous receipt of two forms of payments but the need to elect to either receive one year of the five year entitlement to compensation or forfeit four years of superannuation. It had little difficulty in finding there was different treatment and that the link with the prohibited ground of age was established.
Mr Heads submitted that the material disadvantage he suffered was not receiving NZS for four years. The Crown submitted that something more than this was required and some “existing disadvantage or prejudice against older New Zealanders” needed to be established. The Tribunal noted that this argument failed to understand Mr Heads’ claim, which was restricted to the impact of the treatment on the claimant himself and not on “older New Zealanders” generally.
The Tribunal concluded that there was prima facie discrimination.
Prima facie discrimination may be permissible if it can be established that it is demonstrably justified in a free and democratic society for the purposes of section 5 of the NZBORA. The Court followed the test formulated in R v Hansen, i.e. that the restriction must both serve a purpose that is sufficiently important to justify curtailing the right and must be rationally connected to achieving it.
The Tribunal found that there was little logic in setting the five-year period with an overlap of one year if the aim was simply to facilitate the transition from weekly compensation to NZS. The other proposed objective – saving money – also failed on account of its vagueness. The Tribunal concluded that the Crown had not established a sufficiently important objective.
Even if the Tribunal was wrong in finding the policy had no sufficiently important objective, it held that the restriction was not rationally connected with its purpose because it did not meet either the test of minimal impairment or proportionality.
The Tribunal made a declaration that “the terms of cl 68(3)(b) in Part 4 of Schedule 1 of the Accident Compensation Act 2001 read with sub-clause (4) and (5) are in breach of Part 1A of the Human Rights Act 1993”.
This case summary was prepared by the New Zealand Centre for Human Rights Law, Policy and Practice at the Faculty of Law, Auckland University, and is reproduced here with permission.