Accident Compensation Corporation (ACC) is consulting on the following 2007/2008 levies:
? Employers work levy
? Self-employed work levy
? Pre-1999 claims levy (residual claims levy)
? Earners levy
? Motor vehicle levy.
The ACC Board invites all interested parties to provide input on its levy proposals prior to making recommendations to the Minister for ACC.
This consultation is required under section 331 of the Injury Prevention, Rehabilitation, and Compensation Act 2001.
Summary of proposed levy rates for 2007/2008
Who pays Levy component Current2006/2007average Proposed2007/2008average Proposedchange
Employers Average levy rate for work claims in 2007/2008 $0.86 $0.67 Down $0.19
Average levy rate for injury claims prior to 1999 $0.35 $0.54 Up $0.19
Average combined levy rate per $100.00 payroll $1.21 $1.21 No change
Self-employed people Average levy rate for work claims in 2007/2008 $2.03 $1.74 Down $0.29
Average levy rate for injury claims prior to 1999 $0.35 $0.54 Up $0.19
Levy rate for non-work claims $1.16 $1.16 No change
Average combined levy rate per $100.00 income $3.54 $3.44 Down $0.10
All earners through Inland Revenue Levy rate per $100.00 income for non?work claims $1.16 $1.16 No change
Motorists – through licensing fees and petrol levy Average levy rate per vehicle $190.00 $204.78 Up $14.78
All amounts are shown excluding GST.
To see how the rates changes affect you and your industry, visit the ACC web site for more detailed information. You will find out what your proposed rate is by visiting www.acc.co.nz/levyconsultation
Discussion papers
The details of the proposed levy rates 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/levyconsultation
? 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 11 October 2006 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 September to early October The ACC Board invites the public to make submissions on levy rate proposals and options.
October 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.
What’s in it for you?
Compensation for injuries resulting from accidents was introduced in 1974 so New Zealanders wouldn’t have to go to court to seek compensation if they were injured.
New Zealand is the only country in the world with an accident compensation scheme that covers every one of its citizens
(and visitors to the country) for personal injuries, 24 hours a day, seven days a week.
When an injury happens, ACC will help with:
? medical costs
? loss of earnings compensation – of up to 80% of your earnings
? rehabilitation costs
? support needed for you or your employee to return to work or independence as soon as possible.
This is your chance to have your say on what you pay.
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 2007/2008; 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 2007/2008 work claims from $0.86 to $0.67
? increasing the levy rate for injury claims prior to 1999 from $0.35 to $0.54
? moving three individual classifications to different risk groups (or pricing pools)
? maintaining the number of risk groups for cover on 2007/2008 work injuries to 127, and maintaining the existing 41 risk groups for claims prior to 1999.
Self-employed
Self-employed levies are based on their earnings.
Self-employed pay:
? a levy for cover on their work-related injuries in 2007/2008;
? a levy to pay injury claims prior to 1999; and
? a levy on their cover for non-work injuries.
ACC proposes:
? decreasing the combined levy rate for self-employed to an average of $3.44 per $100.00 of earnings by:
? decreasing the levy rate on cover for 2007/2008 work claims from $2.03 to $1.74
? increasing the levy rate for injury claims prior to 1999 from $0.35 to $0.54
? maintaining the levy rate on cover for non-work claims at $1.16
? moving three individual classifications to different risk groups (or pricing pools)
? maintaining the number of risk groups for cover on 2007/2008 work injuries to 127, and maintaining the existing 41 risk groups for claims prior to 1999.
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:
? maintaining the levy rate on cover for non-work claims from $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 vehicle users.
ACC proposes:
? maintaining the petrol levy for 2007/2008 at 5.78 cents per litre and increasing the average licensing fee per petrol vehicle to $130.84, resulting in a combined average levy rate of $204.78 per petrol vehicle
? maintaining the existing nine vehicle classifications
? increasing the ACC component of the annual vehicle licensing fee for each vehicle type.