Bureaucratic Horror Files: Accident Compensation Corporation (ACC). Who's On First ...

In the modest number of claims I’ve made on private insurance policies over the last quarter of a century, I have had no issues with process or result, some claims dealt with only via a phone call and emailed photo. Not so Government EQC in Christchurch which after over four years of wrangling we’ve given up on; they will pay up to their cap on our earthquake damaged house, we - with no recourse to our private insurer, somehow, (don't ask me how) - will pay the $70,000 remaining required to fix our house, and then there’s our mandatory government insurer Accident Compensation Corporation – for my overseas readers –  ACC. There’s a bit of a fracas amongst the know-all Crusader class residing in the Fortress of Legislation currently regarding ACC’s funding; just as there is only the micro level in economics – you and me voluntarily transacting – no macro, I reckon on the micro-level I’ve discovered ACC's problem, although one point to Labour Leader Andrew Little first …

So Labour allege overcharging ACC is costing jobs ... um, then your higher taxes @andrewlittlemp : why won't they? http://t.co/P7N7ajYnTU
— Mark Hubbard (@MarkHubbard33) March 8, 2015

The Scenario:

Here’s the problem facing me. A farming couple, client, beef finishing, life time of low(ish) profits, some year losses, but they loved the lifestyle, (and they were exceptional about animal welfare – which I respected them for), have been paying ACC on default option (which worked fine: if you’re an insurance broker, please don’t contact me, and yes, most of my clients are on Coverplus Extra, and as great as you probably are, every time you happen to pick up one of my clients, no, I don’t want you dropping in for a cuppa to try and sell me on your services; I know what they are ... sorry, back on track).

All swimmingly well until they sell their farm and retire. They have enough from farm sale to retire comfortably, but modestly, as the income tap is now turned off, however, they find to their horror after I file their final (partnership) tax returns, the two biggest ACC bills they’ve ever seen, and face having to pay these in their retirement, knowing they will never have a claim on ACC.

The reason for big premiums are ACC ‘now’ – because I’m sure they didn’t use to – class depreciation recovered on sale of the various farm assets, in this case $88,000, as income. I ring ACC and ask how ACC are defining ‘passive’ depreciation recovered as ‘personal exertion’ assessable for premiums under the governing act (as that legislation nowhere states depreciation recovered as ‘personal exertion’). Answer on the phone was it is considered ‘mental exertion’. So, I have filed request for review form ACC33 with the department based on following:

Limb I: selling the farm was done by an agent, it did not involve ‘mental exertion’ hence ‘personal exertion’, and so was passive income and therefore not assessable. (I don’t expect to win on this limb - 23 years of being broken down by bureaucracy has taught me this, even though this particular instance seems a change of policy by ACC.)

Limb II: if this does constitute ‘personal exertion’ then selling the farm asset is not the activity of farming, with its very high risk and premium rate, thus the premium should be set on the most lower ‘holding property’ premium rate. This reflects the process of a farm sale, and also how for management purposes stewardship of the farm asset is different to farm trading (hence many farms traditionally owned in family trusts and leased to farming trading entity.)

Given wife and husband’s cases are identical in every respect – 50/50 partners; identical premiums charged; identical principles involved – I simply wrote both of their details on the ACC33 form, with a letter stating their case. I also put on this I was taking my clients’ case for no fee (principle), I would soon either be on holiday, or attending to my father’s affairs (who has been given, a week ago, between one week and six months to live, and no, that timeframe is not helpful), thus I wanted to keep this brief, succinct, and conducted by email, not telephone as I won’t be in Geraldine for near on three months.

Bureaucratic Problem the First:

On receiving my ACC33, an ACC legal advisor emailed me the following:

Dear Mr Hubbard

We have received the application for review for your above clients dated 27 February 2015.

We note that you are the authorised contact person for the accounts.

 While we acknowledge that the application is for a married couple, the application relates to two separate accounts. An application for review must be filed for each separate account. Should the matter proceed to a review hearing the reviewer will more than likely require each hearing to be heard separately.

 Please also note that for an application for review to be valid, the application must refer to a specific decision and the date of that decision must be completed at section 2 of the application. I see that this has not been completed on the current application.

 An application for review must be received by ACC no later than 3 months from the date of the decision or else ACC has no jurisdiction to review its decision.

 For your convenience I attach an editable word version of the ACC33. We look forward to receiving the application for reviews shortly.

			[Name Reacted], Legal Advisor, Legal and Commercial, ACC

In case you missed that, I haven’t got to first base yet because a) I put both clients’ names onto same form (given their cases are identical); I need to file a separate ACC33 for husband and wife, and b) I didn’t write into the ACC33 filed the date of the decision – (noting this was because the review was not vis a vis ‘a decision’, but simply the basis of levying two premium invoices.) I emailed the following in reply:

You've got to be kidding!!!

My review with attached letter contains, succinctly, everything reasonable people will need to look at the issue. It is not in relation to a 'specific decision', it is in relation to the levies my two clients (identical cases) have been charged. My submission is very clear on this.

I have no time for doing all this again, and in duplicate, [snip] … Again, the form and substance of what I sent is wholly sufficient for the requested review.

Please advise, noting that if my original ACC33 is still deemed unacceptable, then I want a phone call, please, from a very senior officer from your legal.

Mark Hubbard

(Partial) Resolution The First:

Per phone call with a senior from their legal department, it appears the problem is with a dispute resolution service ACC use called Fairway Resolution – (that word ‘fair’ again; meaning you’re probably not going to see any of it.) Fairway Resolution governs all these procedures, apparently, and doesn’t want to see my client’s review knocked out on a technicality. Of course we have to put the client through hoops for good of the client. It was thus decided, as follows:

Firstly, that I shall photocopy the copy of the ACC33 I originally filed – thankfully I kept a copy. I shall strike out the wife’s name on that copy of the original copy I kept; on the copy of that copy I shall strike out the husband’s details; I shall then re-file both ‘separate’ copies, but not before I take a copy of the wife’s-name-redacted copy, now the husband’s copy, and a copy of that copy’s copy, now the wife’s copy, with husband’s name redacted, the further copying of which I will do, of course, for safety sake, (FFS), in case I get forcibly looped back into this process again. Or something gets lost. I shall thus be filing a separate copy of the original ACC33 for each spouse, with the other spouse’s details redacted by ‘lining them out’ – technical term: ‘to put a neat line through’ - with a copy of my original letter stating their case attached to each separate copy of the ACC33s refiled. To be precise, I shall send two identical copies of my original letter, one copy each attached to both the new spouse-redacted ACC33s, which are copies of the copy of each spouse’s, spouses’, sorry original joint copy – no! I got that wrong; they will be copies of the original form filed. I was wrong in that latter part because the original form filed with ACC was not a copy: the copy was the document I kept which has allowed me to shortcut the whole longer process by copying it again. The whole process, vis a vis spousal separation, now technically correct, so no technicalities lurking like a pond of poo on the farm they sold for us to fall into at some future date.

From memory, I believe while ACC were capable of performing the copying of the original ACC33 filed with them, the further necessary redaction of spousal names was totally beyond their comprehension. Either that or with no lump sum payments for trauma anymore, they couldn’t allow a staff member to deal with that (ref: Section 404, clause 58 of Department’s Work and Safety Manual).

Secondly, that I would write onto the husband’s copy of the original copy, and on the wife’s copy of the copy of the original copy, before both the copy and the separate copy of the copy are re-filed, the date of their invoices, that being the ‘date of the decision’ my review was requesting reassessment of, thus fulfilling this requirement (per officer’s original email to me). Fortunately the second officer via our phone conversation was able to give me both dates given the invoices were issued by, well, by ACC obviously, meaning they hold that information anyway.

On the positive side, we are now on first base. On the negative side when I asked re the initial email, if this goes through to hearings will I REALLY have to ‘litigate’ both husband and wife hearings separately, meaning at each stage in what I suspect may be a labyrinthine process leading up to such hearings having to repeat all my points twice to their points which will be twice made, presumably, despite both cases are identical?  The answer was, as near as I could tell, yes, I would have to do just that. To repeat myself, I will have to repeat myself, often.

I don’t think this is going to go well, and it may be foolish to believe it will be going quietly into the night as some poet said. Anyway, coincidentally on my email just in, I see a useful upcoming CCH course, ‘Managing Difficult People’: I’ll send it onto the nice officers at ACC with my re-submitted review.

Sorry, review(s). Two, separately, one for each spouse (the other redacted by lining the other spouse’s details out, like so.)

Further Misadventures.

Well, I guess this was predictable. After coming to the aforementioned agreement with ACC, and writing this blog entry sound in the knowledge I had a copy of my original submission, I went to copy that copy of the original ACC33 to find that my memory was playing tricks with me and I didn’t take a copy of the original ACC33, proper, at all, I simply posted it to ACC without copying. As if this blog post needed to find proof of the sanctity of copying, there it is.

So, I am not yet on first base. Fortunately I now have an email address for the senior ACC officer concerned; I’ve just emailed her the following:

Hi [name redacted]

I guess this was predictable given the course of last week, but continuing from our phone call Friday I find I have not kept a copy or scan here of the ACC33 submission on behalf of my client. Between writing that, and this, I have changed computers and while transferring all my data, that data did not include a temporary folder I always keep on computer being docs, etc, for issues such as this that I don't need to keep long term in respect of matters with Inland Revenue.

So, could you scan and email back my submission in order than I can copy here, twice, redact appropriately, then scan and send back to you.

Sorry for inconvenience.

Regards Mark Hubbard

I’ll keep you updated on my ultimate failure. In the meantime file this under post-structuralism, and a final thought, ACC could also stand for Abbot Corresponding with Costello, those guys must have dealt with a few government departments in their time: