Consultation begins on proposed ACC levy rates
ACC today released its proposed levy rates for public consultation. Our Board Chair, Steve Maharey, has outlined what's proposed
Every three years ACC sets separate levies to cover the cost of work-related personal injuries, non-work related personal injuries for workers and personal injuries involving motor vehicles on public roads.
These levies are paid by employers, self-employed people, employees and motor vehicle users.
The consultation period will run for five weeks from 1 September to 5 October.
“We’re inviting members of the public to provide feedback on the proposed changes before we make our final recommendations to the ACC Minister for a decision”, says ACC Board Chair, Steve Maharey.
“Each year ACC accepts around two million injury claims. This number has been steadily increasing over time as our population grows and ages. At the same time, healthcare costs have also been growing.
“This means the amount of money we need to support injured New Zealanders has increased – and will continue to increase into the future. The amount ACC collects in levies has not kept up with these increases."
“This means, current levies are $1.39 billion lower than what is needed to cover the lifetime cost of injuries each year. ACC has an obligation to recommend levy rates that close the funding gap to ensure we can pay for the cost of injuries and avoid pushing that cost onto future generations.
“We’re recommending a decrease to the levy rates for our Work Account (covering work injuries) as it has sufficient funds to allow this. However, we propose an increase in the levy rates for the Earners’ Account (non-work injuries for workers) and the Motor Vehicle Account (road injuries) as they don’t have enough funds for a decrease.”
The proposed changes to the accounts for the next three years are:
- a decrease in the average Work levy rate for employers and self-employed from the current rate of $0.67 per $100 of payroll to $0.63 in 2022/23, then an increase to $0.65 in 2023/24 and $0.67 in 2024/25
- an increase in the Earners’ levy rate for workers from the current rate of $1.21 per $100 wages to $1.27 in 2022/23, $1.33 in 2023/24 and $1.39 in 2024/25
- an increase in the average Motor Vehicle levy from $113.94 per vehicle currently to $120.20 in 2022/23, $128.83 in 2023/24 and $138.08 in 2024/25.
The impacts of the proposed increases can be seen in the following examples:
- A small home construction business with eight employees earning $70,000 each and a small fleet of six vehicles currently pays $192.85 per week. This would decrease to $166.05 per week in 2022/23, then go up to $171.28 per week in 2023/24 and $177.66 per week in 2024/25 (i.e. still less than the current rate).
- A family with a household income of $129,000 and three vehicles currently pays $36.36 per week. This would increase to $38.24 per week in 2022/23, $40.21 per week in 2023/24 and $42.22 per week in 2024/25.
- A family with a household income of $85,000 and two vehicles currently pays $24.11 per week. This would increase to $25.44 per week in 2022/23, $26.76 per week in 2023/24 and $28.10 per week in 2024/25.
To find out more information on the proposals and to make a submission, please go to www.shapeyouracc.co.nz
Mr Maharey says once the ACC Board has considered all the feedback, it will then submit recommendations to the Minister for ACC who will make the final decision on levy rates.
