Weekly compensation payments to 170 people are being cut because the Accident Compensation Corporation failed to follow the law.
The mistake, which ACC admits was a serious blunder, was discovered in March when a Parliamentary select committee hearing asked for a review of who was receiving money.
The review found ACC had paid more than $12 million since 2006 to clients who had stopped working due to an injury they received at a time when they did not have a job.
The 170 people who have been identified face having to do without up to 80% of their income.
