ACC's own numbers put the national income protection gap at about $714 million a year

Source: ACC, Injuries in New Zealand

ACC's Injuries in New Zealand report counts more than 20 million days away from work. Because ACC replaces 80% of pre-injury earnings by design, the uncovered fifth of its own weekly compensation spend comes to roughly $714 million a year.

By · ACC · 2026-06-17

New Zealanders lose about $714 million of earnings a year that ACC does not replace, on ACC's own figures. That number is not in ACC's Injuries in New Zealand report, or anywhere else we can find. It falls straight out of two things ACC publishes separately: what it paid in weekly compensation, and the 80% rule it pays under.

What ACC published

ACC released its Injuries in New Zealand report on 17 June 2026, describing it as a call to action. It reports more than 2 million injury claims accepted in the year and more than 20 million days away from work due to injury in 2025 (ACC, retrieved 20 August 2026).

The report breaks the burden down by setting. Home injuries account for 6.4 million days of weekly compensation, $2.7 billion of lost productivity and $934 million of scheme costs, mostly from falls during routine activities. Sport and recreation accounts for more than 480,000 claims, 2.5 million days of weekly compensation, around $1 billion of lost productivity and $389 million of scheme costs, with gym and fitness injuries up 10% and now ahead of rugby. Work-related injury accounts for 4.7 million days of weekly compensation, $815 million of scheme costs and about $2 billion of lost productivity a year. Road injuries are under 2% of claims but 11% of costs, at 1.3 million days, $201 million of scheme costs and $549 million of lost productivity, averaging $14,500 a claim.

Separately, ACC's Annual Report 2025 records that ACC paid $2,855 million of weekly compensation in the year to 30 June 2025, up from $2,474 million the year before (ACC, Annual Report 2025, retrieved 20 August 2026). ACC's own guidance states that it calculates weekly compensation as 80% of average weekly earnings before injury (ACC, retrieved 20 August 2026).

The arithmetic ACC did not do

This is our calculation. ACC has not published it.

If $2,855 million represents 80% of the pre-injury earnings ACC was replacing, then the earnings base behind that payment was $2,855m divided by 0.80, or $3,568.75 million. The fifth ACC does not pay is 20% of that base: $713.75 million, call it $714 million a year.

That figure needs no assumption about average wages, no external earnings series and no modelling. It is ACC's own payment divided by ACC's own replacement rate. The only input from outside ACC is the arithmetic.

Per day, the same rule gives a cleaner statement. For every day ACC pays weekly compensation, the injured person is short a quarter of what lands in their account, because the missing 20% is one quarter of the 80% they receive.

Putting a dollar figure on that day requires one more step. ACC itemises days of weekly compensation for four settings in the Injuries in New Zealand report: 6.4 million at home, 4.7 million at work, 2.5 million in sport and recreation, 1.3 million on the road, totalling 14.9 million. Dividing ACC's $2,855 million of weekly compensation by 14.9 million days gives about $192 a day paid, and therefore about $48 a day not paid.

Setting Days of weekly compensation Scheme costs Lost productivity
Home 6.4m $934m $2.7b
Work 4.7m $815m ~$2b
Sport and recreation 2.5m $389m ~$1b
Road 1.3m $201m $549m
Four settings combined 14.9m $2,339m ~$6.25b

Source: ACC, Injuries in New Zealand, retrieved 20 August 2026. The combined row is our addition.

There is a useful cross-check buried in that table. Divide each setting's lost productivity by its days and ACC's implied value of a lost workday comes out at about $422 at home, $426 at work, $422 on the road and about $400 in sport. Four independent settings landing within 7% of each other says ACC is applying one consistent daily productivity value across the whole report, which is worth knowing before anyone quotes a single setting's productivity figure as if it were separately measured.

What the $714 million actually buys, and what it does not

The gap is real money and it is nobody's fault. New Zealand's scheme was designed to replace 80%, not 100%, deliberately, so that returning to work always pays more than staying on compensation. The point of the number is not that ACC is short-changing anyone. It is that the gap is a fixed, structural, quantified feature of the scheme, and it is roughly the size of a mid-sized insurance market.

For comparison, New Zealanders paid $539 million in total annual income protection premiums in the year to 31 March 2026, on Financial Services Council figures (FSC, retrieved 20 August 2026). The whole private income protection market, every policy in the country, collects less in premium than the ACC shortfall costs households in lost earnings. Those two figures cover different periods and are not the same kind of number, one is premium in and the other is earnings foregone, but the order of magnitude is the finding.

What this means for your cover

Three things follow if you earn a wage or a salary.

First, the 20% is the floor, not the ceiling. ACC calculates weekly compensation on earnings up to a maximum, so anyone earning above that cap loses more than 20% of their income, and the shortfall widens the more you earn. Our guide to how much ACC weekly compensation pays sets out the cap and how it is applied.

Second, the first week is not in the $714 million at all. For a work injury your employer pays the first week at 80%, and for a non-work injury you are usually using sick or annual leave, so ACC's spend does not include those days (ACC, retrieved 20 August 2026). The true uncovered total is higher than $714 million by whatever that first week costs across more than 107,000 new weekly compensation claims a year.

Third, private income protection in New Zealand is generally written to offset ACC rather than sit on top of it, so a policy does not automatically pay the missing fifth. Whether yours tops up ACC or only pays where ACC does not is a policy wording question, and it is the specific thing to check. We cover the shape of that gap in the ACC gap explained.

The honest limits

The periods do not line up. The Injuries in New Zealand report covers calendar 2025. ACC's weekly compensation spend is for the year to 30 June 2025. The FSC premium figure is for the year to 31 March 2026. We have not adjusted for that, and a strict like-for-like comparison would move the numbers by a few percent, not by an order of magnitude.

The $714 million assumes every dollar ACC paid in weekly compensation was paid at exactly 80% of pre-injury earnings. In practice some payments are minimum-rate, some are capped at the maximum, and 2024/25 included large backdated payments arising from a Court of Appeal ruling on sensitive claims. Capped payments push the true gap above $714 million. Minimum-rate payments to low earners push it down. We cannot see the split, because ACC does not publish the distribution of weekly compensation by earnings band.

The $192 a day figure is the weakest number here, because it divides a 2024/25 payment total by 2025 calendar-year day counts, and because the 14.9 million days are the four settings ACC chose to itemise, which may not be every day of weekly compensation paid. Treat it as indicative of scale, not as a rate.

And we read ACC's newsroom page and its Annual Report directly. We did not obtain the full Injuries in New Zealand report as a separate document, so every figure attributed to it here is as ACC summarised it on its own newsroom page.

Sources

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