Consultation on Proposed Changes to the Earner Levy and Premium ACC is responsible for managing the Earners' Account, which pays for the treatment of non-work injuries sustained from 1 July 1992 by New Zealanders in paid employment (except self-employed who have chosen to insure with a private insurer from 1 July 1999). The Earners' Account is funded in two ways: By accident compensation premiums for non-work injuries which occur on or after 1 July 1999; and By the levies for prior claims which occurred on or before 30 June 1999. The Earners' Account was previously funded on a pay-as-you-go system, therefore insufficient reserves exist to fund the total ongoing costs. Our actuaries estimate the unfunded liability of the Earners' Account at $299 million. New Zealanders in paid employment will continue to pay a levy for prior claims to ACC for up to 15 years or until reserves are sufficient to cover the total claim liability (whichever comes first). Recent performance in scheme management means this prior claim levy can be reduced from the current rate of $0.17 (G.S.T. exclusive) per $100 of liable earnings. In addition, a reduction in the current rate of accident compensation premium of $1.0744 (G.S.T. exclusive) for every $100 of liable earnings is possible as a result of sustained support and success of injury prevention and injury management initiatives. ACC invites interested people to make submissions on both the setting of the premium, and levy before a recommendation is made to the Minister for Accident Insurance. The new rates will take effect from 1 April 2000. ACC is proposing the following 2000/01 funding options (below) for the Earners' Account. As the composite premium and levy is collected by IRD, it must be a multiple of 10 cents on a G.S.T. inclusive basis in order for the composite rate to be incorporated into the PAYE tables. Full details of the options are set out in the consultation paper. ACC invites earners to make submissions on the above proposals. A discussion paper (including the proposed regulations) and a copy of the actuarial advice on which the levy and premium assessments are based are available by writing to: Earners' Account Consultation ACC P.O. Box 242 WELLINGTON or by contacting the ACC Business Service Centre on 0800 222 776. Copies may also be obtained from ACC's website: www.acc.co.nz. Submissions close on Friday, 24 September 1999. [tn,6] Option Prior Claim Levy Accident Compensation Premium Rounding to nearest 10c Multiple Composite (G.S.T. Exclusive) Composite (G.S.T. Inclusive) Rounded to nearest 10 Multiple [tn,6] Current Rates $0.1700 $1.0744 - $1.2444 $1.40 [tn,6] 1. Continue current levy rate which would reach the full funding target within 6 years $0.1700 $0.9550 $0.0305 $1.1555 $1.30 2. Levy rate reduced to reach full funding target within 10 years $0.1100 $0.9550 $0.0017 $1.0667 $1.20 3. Levy rate reduced to meet maximum 15 years timeframe to reach full funding target $0.0700 $0.9550 -$0.0472 $0.9778 $1.10 [tn,6]