ACC Consults on 2011/12 Levy Rates and Experience

ACC Consults on 2011/12 Levy Rates and Experience Rating



The Accident Compensation Corporation (ACC) is seeking submissions on its proposed levy rates for 2011/12 and on the implementation of experience rating in the Work Account.

Background

“2010 sees ACC in a more positive financial position than 2009, and so our proposed levy increases are much more modest this year,” said ACC Chairman John Judge.

“However, the ACC Board believes that small levy increases are necessary, and may be for the next few years. It’s important to remember that ACC has a significant deficit (currently $10.3 billion) and so there’s still some catching up to do. We’re mandated to have ACC fully funded by 2019 and achieving that goal becomes more problematic without the increases we’re proposing.”

“Levy increases are never welcome but I believe that if people can see the rationale for them and the ‘light at the end of the tunnel’ then they become much more palatable,” Mr Judge said.

“Given the Board’s view that changes to levies are required we are legislatively bound to publicly consult on those proposed changes and then make recommendations to the Minister for ACC, who will make the final decisions”.

What changes are proposed?

In the Work Account (paid by employers and self-employed people) ACC is proposing no increase at all this year in the average combined levy, although individual industries may see small rises or falls. The future plans for work levies anticipate no significant rises in foreseeable years.

For motor vehicles, an average 2.5 percent levy increase is proposed. That is the equivalent of forecast long-term inflation. Very small increases are also forecast for the next two years, again at the rate of inflation, but thereafter no significant rises are anticipated.

In the Earners’ Account (paid by all earners) the proposed increase is 6.7 percent this year. The increase is necessary because reserves are more depleted in this Account, but again the plan is that this will be followed by several years with no increases.

Experience rating

This year ACC is also consulting on the implementation of experience rating in the Work Account. Experience rating would see a business’ levies based partly on its claims history. Experience rating will ensure levies are fairer and will also provide an incentive for businesses to improve their injury prevention and injury management performance.

The process

The consultation period will run for one month, from 1 October to 29 October 2010.

While the consultation will be of most interest to levy payers anyone can have a say on the proposals.

Interested parties should visit www.acc.co.nz/consultation to see the relevant documents. Hard copies can be obtained by emailing levyconsultation@acc.co.nz or ERconsultation@acc.co.nz or by calling 0800 222 7283.

Once the consultation period has closed ACC will consider the feedback and finalise its recommendations to the Minister for ACC. The Minister will then decide the final levy rates.

ENDS

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