Accident Compensation Corporation (ACC) is consulting on the following 2006/2007 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. All interested parties are invited to make submissions on the proposed levies and regulations.
Summary of proposed levy rates for 2006/2007 (G.S.T. exclusive)
Who pays Levy component Current2005/2006average Proposed2006/2007average Proposedchange
Employers Levy rate for work claims in 2006/2007 $0.88 $0.86 Down $0.02
Levy rate for injury claims prior to 1999 $0.33 $0.35 Up $0.02
(these are average rates) Combined levy rate per $100.00 payroll $1.21 $1.21 No change
Self-employed people Levy rate for work claims in 2006/2007 $1.82 $2.06 Up $0.24
Levy rate for injury claims prior to 1999 $0.33 $0.35 Up $0.02
Levy rate for non-work claims in 2006/2007 $1.07 $1.16 Up $0.09
(these are average rates) Combined levy rate per $100.00 income $3.22 $3.57 Up $0.35
All earners – through Inland Revenue Levy rate per $100.00 income for non work claims in 2006/2007 $1.07 $1.16 Up $0.09
Motorists – through licensing fees and petrol levy Levy per vehicle $206.93 $190.00 Down $16.93
All amounts are shown excluding G.S.T.
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 3 November 2005 at 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 October – early November The ACC Board invites the public to make submissions on levy rate proposals and options.
The ACC Board considers the submissions.
November – December 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 the levies it collects each year and 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
Employer levies are based on their employee payroll. Employers pay:
? a levy for cover on work-related injuries to their employees in 2006/2007, and
? a levy to pay for injury claims prior to 1999.
ACC proposes:
? maintaining the combined levy rate for employers at an average of $1.21 per $100.00 of payroll by:
? decreasing the levy rate on cover for 2006/2007 work claims from $0.88 to $0.86
? increasing the levy rate for injury claims prior to 1999 from $0.33 to $0.35
? moving five individual classifications to different risk groups (or pricing pools)
? reducing the number of risk groups for cover on 2006/2007 work injuries to 127, and maintaining the existing 41 risk groups for claims prior to 1999
? introducing a levy discount scheme for small employers in five industry sectors with the highest number of work injuries.
Self-employed
Self-employed levies are based on their earnings.
Self-employed pay:
? a levy for cover on their work-related injuries in 2006/2007, and
? a levy to pay injury claims prior to 1999
? a levy on their cover for non-work injuries in 2006/2007.
ACC proposes:
? increasing the combined levy rate for self-employed to an average of $3.57 per $100.00 of earnings by:
? increasing the levy rate on cover for 2006/2007 work claims from $1.82 to $2.06
? increasing the levy rate for injury claims prior to 1999 from $0.33 to $0.35
? increasing the levy rate on cover for 2006/2007 non-work claims from $1.07 to $1.16
? moving five individual classifications to different risk groups (or pricing pools)
? reducing the number of risk groups for cover on 2006/2007 work injuries to 127, and maintaining the existing 41 risk groups for claims prior to 1999
? introducing a levy discount scheme for self-employed in five industry sectors with the highest number of work injuries.
Earners
Earner levies are based on the earnings of employees and self-employed people, and pay for cover on their non-work injuries.
ACC proposes:
? increasing the levy rate on cover for 2006/2007 non-work claims from $1.07 to $1.16 per $100.00 of earnings.
Motorists
Motorists pay for all injuries involving motor vehicles on public roads, through a combination of:
? a levy paid by motor vehicle owners through their annual vehicle licensing fee (the levy is based on the type of vehicle)
? a levy on petrol sales paid by drivers.
ACC proposes:
? reducing the levy paid by motor vehicle owners to an average of $190.00 per vehicle
? maintaining the petrol levy at the current rate of 5.78 cents per litre
? maintaining the existing nine vehicle classifications
? reducing the ACC component of the annual vehicle licensing fee for each vehicle type.