Notice Type
Departmental
Consultation on Proposed Changes to the Residual Claims Levy ACC is responsible for managing the Residual Claims Account, which pays for the immediate and ongoing costs of treating and rehabilitating people who were injured in the workplace before 30 June 1999 and suffered non-work injuries prior to 1 July 1992. These prior year claims were previously funded on a pay-as-you-go system, therefore insufficient reserves exist to fund their total ongoing costs. The unfunded liability of these prior year claims is estimated at $1.9 billion. Employers will continue to pay a levy to ACC for up to 15 years, or until reserves are sufficient to cover the total claim liability (whichever comes first). Recent performance of the ACC scheme means that the levy can be reduced (the current levy is an average 67 cents per $100 dollars of wages). ACC invites interested people to make submissions on the residual claims levy rate 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 Residual Claims Levy options: Option 1: Maintain the levy at its current average rate, thereby reducing the time period estimated for meeting the costs of all residual claims to 8 years. Option 2: Reduce the levy to an average $0.56, thereby reducing the time period estimated for meeting the costs of all residual claims to 10 years. Option 3: Reduce the levy to an average $0.39, and maintain the 15 year funding maximum time period set in the Accident Insurance Act 1998 for meeting the costs of all residual claims. All rates expressed are G.S.T. exclusive. Full details of the options are set out in the consultation paper. ACC invites premium payers to make submissions on the above proposals. A discussion paper (including the proposed regulations) and a copy of the actuarial advice on which these assessments are based are available by writing to: Residual Claims 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.
Publication Date
26 Aug 1999

Notice Number

1999-go6235

Page Number

2420