Accident Compensation Corporation (ACC) is consulting on the following 2005/2006 levies:
? Employers work levy.
? Self-employed work levy.
? Pre-1999 claims levy (residual claims levy).
? Non-work levy.
? Motor vehicle levy.
As required under section 331 of the Injury Prevention, Rehabilitation and Compensation Act 2001, the ACC Board requests your input on its levy proposals before making recommendations to the Minister for ACC in October 2004. All interested parties are invited to make submissions on the proposed levies and regulations.
Summary of proposed levy rates for 2005/2006 (G.S.T. exclusive)
Who pays Levy component Current 2004/2005 average Proposed 2005/2006 average Proposed change
Employers Composite Levy (for every $100.00 of payroll)* $1.21 $1.21 No change
Which consists of a:
Work levy $0.91 $0.88
Pre-1999 claims levy $0.30 $0.33
Self-employed people Composite Levy (for every $100.00 of earnings)* $3.10 $3.19 + 2.9 %
Which consists of a:
Work levy $1.73 $1.79
Pre-1999 claims levy $0.30 $0.33
Non-work levy $1.07 $1.07
All earners - through Inland Revenue Non-work levy (for every $100.00 of earnings) $1.07 $1.07 No change
Motorists - through annualvehicle licensing fee and levy on petrol Motor vehicle levy (per motor vehicle) $197.50 $197.50 No change
*These are average rates. Individual rates for industry groups may increase or decrease based on recent experience.
Discussion papers
The details of the proposed levy rates and regulations are set out in consultation documents. For copies of these documents and the actuarial assessments, you can:
? download the documents in PDF format from www.acc.co.nz
? email consultation@acc.co.nz
? write to Levy Consultation, ACC, P.O. Box 242, Wellington
? call ACC on 0800 ACC RATES.
Submissions
Submissions must be in writing and received by ACC no later than 16 September 2004 by 5.00 p.m. They should be sent to Levy Consultation, ACC, P.O. Box 242, Wellington, or emailed to consultation@acc.co.nz
An overview of reviewing the levies
Each year, ACC reviews the levies it charges.
From August - early September The ACC Board invites the public to make submissions on levy rate proposals and options
September The ACC Board considers the submissions.
October The ACC Board makes recommendations to Government, via the Minister for ACC, about any changes to the levy rates for the following levy year.
1 April The regulations and new levy rates come into effect (except the motor vehicle levy).
1 July The regulations and new motor vehicle levy rate come into effect.
Why do levies change?
ACC meets the ongoing cost of claims from:
1. the levies it collects each year; and
2. the interest it earns by investing any unspent levies or reserves.
There are a number of factors that affect levy rates. These include the forecast trends in injury and death rates, the duration and cost of claimants' rehabilitation or compensation, and economic factors such as inflation and interest rates. Rising interest rates increase the future earnings expected from ACC's investments and decrease ACC's liability for past injuries and, as a result, reduce the levy rates. The opposite is true when interest rates reduce.
Proposals for each group of levy payers
Employers
Employers pay a composite levy that includes both a work levy and a pre-1999 claims levy.
The work levy meets the costs of workplace injuries to employees that occur after 1 April 2000, and not covered by private insurance.
The pre-1999 claims levy pays for work injury claims before 1 July 1999 plus non-work injury claims before 1 July 1992.
Employer levies are based on the payroll of their employees.
ACC proposes to:
? maintain the 2005/2006 average composite employer levy at the current rate of $1.21 for every $100.00 of payroll, consisting of:
? the average work levy decreasing from $0.91 to $0.88; and
? the average pre-1999 claims levy increasing from $0.30 to $0.33.
? maintain the current 129 risk groups (or pricing pools) for the work levy and also maintain the current 41 risk groups for the pre-1999 claims levy.
? amend the Framework for the Accredited Employers Programme to improve the description of how the discount is calculated. Two options are presented. Option 1 is to revise the detailed description in the framework. Option 2 is to remove the detailed description, but maintain the general approach to calculating the discount.
? change three individual classifications to match recent claims experience.
? re-name one individual classification to clarify coverage.
Self-employed
Self-employed pay a composite levy that includes a work levy, a non-work levy and a pre-1999 claims levy.
The work levy meets the costs of workplace injuries to self-employed that occur after 1 July 1999, and not covered by private insurance.
The non-work levy is to cover the cost of their non-work injuries.
The pre-1999 claims levy pays for work injury claims before 1 July 1999 plus non-work injury claims before 1 July 1992.
Self-employed levies are based on their earnings.
ACC proposes to:
? increase the 2005/2006 average composite self-employed levy by 2.9% from $3.10 to $3.19 for every $100.00 of earnings, consisting of:
? the average work levy increasing from $1.73 to $1.79;
? the non-work levy remaining at the current rate of $1.07; and
? the average pre-1999 claims levy increasing from $0.30 to $0.33.
? maintain the current 129 risk groups (or pricing pools) for the work levy and also maintain the current 41 risk groups for the pre-1999 claims levy.
? change three individual classifications to match changing market conditions.
? rename one individual classification to clarify coverage.
Earners
The non-work levy covers the cost of non-work injuries to earners and self-employed people.
ACC proposes to:
? maintain the 2005/2006 non-work levy at the current rate of $1.07 for every $100.00 of earnings.
Motorists
The motor vehicle levy covers the cost of all injuries involving motor vehicles on public roads.
Motorists pay for motor vehicle injuries through an average motor vehicle levy made up of an annual vehicle licensing fee levy and a petrol levy.
ACC uses a vehicle classification system based mostly on vehicle type. Motor vehicle owners pay a levy based on the type of vehicle owned.
ACC proposes to:
? maintain the 2005/2006 average motor vehicle levy at the current rate of $197.50 per vehicle.
? maintain the current nine classifications and their rates for 2005/2006.
? maintain the petrol levy at the current rate of 5.08 cents per litre.
? maintain the ACC component of the annual vehicle licensing fee for each vehicle type at their current rates.
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