High Court stops MSD from chasing payments after ACC backpay
People facing long delays in getting ACC cover will no longer have to repay supplementary assistance they have received while the awaited ACC’s decision following a recent High Court decision.
Community Law Centres Aotearoa (CLCA) , supported by law firm Gilbert Walker and barrister Jack Wass, recently intervened in a High Court case that determined MSD could not retrospectively require pay back of supplementary assistance following back-payment of ACC weekly compensation.
“This is the first time CLCA has acted as intervenor in a High Court case and we anticipate taking similar action on cases that impact on Community Law clients and their communities,” said CLCA CEO, Sue Moroney.
“This ruling is a huge relief for people who were unfairly saddled with debts they could never have anticipated”, said CLCA Law Reform Coordinator Rupert O’Brien. “The Court has confirmed that support for essentials like housing and power isn’t something you should have to pay back years later.”
Sometimes there is a delay between a person suffering an accident and obtaining ACC cover – that delay can be for years. However, once ACC grants cover it then pays the person backpay for weekly compensation.
In the meantime many people receive support from MSD while they are waiting on cover from ACC. Where this happens, ACC automatically reimburses MSD for the main benefit (under s 252 of the ACC Act). However, until now, MSD was also requiring people to repay any supplementary assistance like accommodation supplements or winter energy payments received during the backpay period.
These debts were often very large, and beneficiaries were often not in a position to repay MSD these amounts, having spent the supplementary assistance in good faith at the time on essential costs such as accommodation, heating and food.
At the High Court Justice Grice held that while s 252 of the ACC Act provided for ACC to reimburse MSD for the main benefit, it did not extend to supplementary forms of assistance designed to meet essential costs. The Court held that these persons were entitled to the supplementary support when they received it, and that forcing them to pay it back years later went against the purpose the Social Security Act 2018.
This decision means those who have faced such large, unexpected debts after receiving ACC backpay could have those debts wiped.
Background
Twenty-four Community Law Centres work out of over 140 locations across New Zealand to provide free legal help and advice to those who are unable to pay for a private lawyer or who do not have access to legal aid. This advice covers all aspects of New Zealand’s legal system, including family law, employment issues, housing problems, consumer advice and criminal law. As well as around 240 staff, Community Law’s services are boosted by over 1,200 volunteer lawyers who run clinics and deliver free advice and assistance.
(Community Law Centres Aotearoa press release, 5 January 2026)
