Accident Compensation Corporation (ACC) is consulting on the following 2008/09 levies:
- Work levy (self-employed people and employers combined)
- 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.
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.
This is your chance to have your say on what you pay
Summary of proposed levy rates for 2008/09 (GST exclusive)
Who pays Levy Component Current 2007/08 Proposed 2008/09 Proposed change
Self-employed people* and Employers (invoiced directly by ACC) Levy rate for work claims in 2008/09 $0.89 $0.78
Levy rate for injury claims prior to 1999 $0.43 $0.47
Combined average levy rate per $100.00 liable earnings $1.32 $1.25 down 7c
Note: These are average rates. Individual rates for industry groups may increase or decrease based on recent experience.
Employees (through PAYE) Levy rate for non-work claims in 2008/09 per $100.00 liable earnings $1.1556 $1.2444^ Up 8.88c
Motorists (through licensing fees and petrol levy) Average levy per vehicle $204.78 $254.63 Up $49.85
*Self-employed people and non-PAYE shareholders also pay the non-work claims levy.
^Proposed non-work claims levy including GST is $1.40 ($1.30 in 2007/08).
To see how the rates changes affect you and your industry, visit the ACC website for more detailed information. You will find out what your proposed rate is by visiting www.acc.co.nz/levyconsultation
Proposals for each group of levy payers
Self-employed and Employers
Employer levies are based on their employee payroll. Employers pay:
- a levy to cover work-related injuries to their employees in 2008/09; and
- a levy to cover injury claims prior to 1999.
Self-employed levies are based on their earnings. Self-employed people pay:
- a levy to cover their work-related injuries in 2008/09;
- a levy to cover injury claims prior to 1999; and
- a levy to cover their non-work injuries in 2008/09.
ACC proposes:
- decreasing the combined levy rate for self-employed people and employers to an average of $1.25 per $100 of liable earnings by:
- decreasing the levy rate to cover 2008/09 work claims from $0.89 to $0.78
- increasing the levy rate to cover injury claims prior to 1999 from $0.43 to $0.47
- decreasing the number of risk groups to cover 2008/09 work injuries to 117, 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:
- increasing the levy rate to cover 2008/09 non-work claims to $1.244 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:
- increasing the petrol levy for 2008/09 to 9.34 cents per litre and increasing the average licensing fee per petrol vehicle to $136.48 resulting in a combined average levy rate of $254.63 per petrol vehicle
- maintaining the existing nine vehicle classifications
- increasing the ACC component of the annual vehicle licensing fee for each vehicle type.
Discussion papers
The details of the proposed levy rates and regulations are set out in consultation documents. For copies of these documents, actuarial assessments and ACC's policy for funding outstanding claims liabilities, you can:
- download the documents in PDF format from www.acc.co.nz/levyconsultation
- email consultation@acc.co.nz
- write to Levy Consultation, ACC, PO Box 242, Wellington
- call ACC on 0800 ACC RATES (0800 222 7283).
Submissions
Submissions must be in writing and received by ACC no later than 5.00pm on 10 October 2007. They should be sent to Levy Consultation, ACC, PO Box 242, Wellington, faxed to (04) 918 4395 or emailed to consultation@acc.co.nz