Treasury has revealed it cautioned against ACC cover being expanded to mosque attack victims suffering mental health issues.

Photo: RNZ / Claire Eastham-Farrelly

In its advice to Cabinet on 15 April, it said extending such cover to mosque attack victims as a one-off would raise questions about fairness and if other groups deserved support.

Treasury information states ACC only covered mental injury caused by a single event at work, related for instance to sexual assault or physical injury.

It was warned that if expanded, it could set a potentially very expensive precedent and arguments for expanding mental health cover could also be made for events like the Canterbury earthquakes.

ACC provides 80 percent of a person's earnings in weekly compensation and that was "much higher" than support from the Ministry of Social Development.

Treasury information claimed there was "pressure to expand ACC cover to wider groups" and extending cover could undermine a "principled policy discussion on where the boundary should lie."

"We are concerned that the proposed approach has failed to take into account the overall system perspective and that is more appropriate to use ... health and welfare systems to support victims of this attack, as was done in response to the Christchurch earthquake."

Extending cover would need a pre-commitment of $10.8m from the Budget 2019 operating allowance.

Treasury information said there was a case for expanding cover permanently but more work on that was needed.