2021 ACC's Experience Rating proposals > Should we raise the maximum amount levies can increase for businesses in the ER Programme?

Recommendations to the Minister

Should we raise the maximum amount levies can increase for businesses in the ER Programme?

We're proposing this to more fully account for businesses which have claims histories which are worse than the average for similar businesses in the Experience Rating Programme.

Agree

Disagree

Responses

Maximum adjustment in levy increases for businesses in the ER Programme

Any experience rating adjustment is based on an assessment of the claims history for each year in a business’s three-year levy period.

The current maximum levy increase from experience rating is 75%. We’re proposing that should be raised to 100%. This means we would more fully recognise a business which has a claims history that is significantly worse than the average for similar businesses.

These changes complement the current incentives for businesses to focus on building a safety culture and reflect our commitment to reducing workplace injuries.

The additional levy received will be used to reduce the average Work levy we charge businesses (from just under 3 cents to 2 cents per $100 liable earnings).

How it would work

We propose that from 1 April 2022, the following two changes take effect:

The maximum levy increase in the Experience Rating Programme calculation is raised from 75% to 100%.
The current 75% levy increase band is replaced with four new bands from 70%. These new bands would increase the levy in 10% increments up to 100% (i.e. 70%, 80%, 90% and 100%).

A range of experience rating adjustments (increases or discounts) are rounded to a single result – the band value. The new rounding rules would be as follows (only the experience rating adjustments that increase levies are shown):

Claim history relative to peers	Levy increase band (%)
5-15% worse	+10
15-25% worse	+20
25-35% worse	+30
35-45% worse	+40
45-55% worse	+50
55-65% worse	+60
65-75% worse	+70 (new band)
75-85% worse	+80 (new band)
85-95% worse	+90 (new band)
>95% worse	+100 (new band)

What it would mean for businesses

For most businesses, our proposal would mean they’d contribute less towards Experience Rating discounts. This is because the added cost to the average Work levy would decrease from just under 3 cents to 2 cents per $100 liable earnings.

We estimate 14% of 15,000 total businesses in the Experience Rating Programme (usually medium-sized or large businesses) would pay a higher levy as a result of this proposal. However, only 1% would move up by more than one band (i.e. have a greater than 10% levy increase).

There are currently 31 employers with claims histories that are significantly worse than the average over the last three-year period. Their current experience rating adjustment, based on their claims histories, reflect the maximum levy increase of 75%. Under our proposal:

14 of these business groups would receive an 80% levy increase
nine would move to a 90% levy increase
eight would receive the new maximum levy increase of 100%.

Our expectation is that some employers will be encouraged to focus on their workplace safety to avoid receiving a greater levy increase.

What you told us in 2018

We first consulted on this proposal in 2018.

Most people (93%) supported the proposed improvements to experience rating. The former Minister for ACC requested further work be done to better understand the impact of the proposed change to the maximum levy increase on individual businesses (as described further in this proposal). This has required further consultation to be undertaken.

1 Sep 2021

Open for feedback

Tell us what you think about our proposals.

5 Oct 2021

Consultation closes

We’ll review and consider all feedback submitted to us.

Nov 2021

Recommendations to the Minister

Taking account of what you tell us, we’ll make recommendations on levy rates to the Minister for ACC.

Dec 2021

Final decisions by Government

The Government will make the decision on final levy rates, which will take effect next year and be in place for three years.

Agree

67%

Disagree

33%

67%

Agree

67%

Disagree

33%

I think it is a lazy option. Rather than reward employers for good management, and good processes its simply penalise more with no account of whether the employer has good processes in place. I do agree in principle that any employee that dies at work through an injury should not get any discount. Whether fault or not it shouldn't apply.

Im ok with the raising of the ER.

What is very frustrating to business is the current process of a doctor categorising claims non-work related or work related. If the person doesnt have a specific trigger event when they see a GP it get put as a work related claim based on what they do for a job, if that job is physical. Im talking about claims like strains, sprains, sore shoulders or backs, etc). They always get classified as work related just because of what the do for a job. I have multiped examples of this each year. These types of injuries generally lead to a bit of time off, sometime a lot of time, and damage a companies experience rating. When ACC or the employee is challenged on this the only option is for the employee to confirm it happen outside of work by making up a trigger event out side of work. Just doesnt seem right but that is what GP's do.

For the worst employers who repeatedly fail to protect the safety of their staff then it is fair to expect them to carry their share of the risk. If 100% increase is porportiontate to the risk for these emplyers then this is fair. If it is being used as a penalty for breaches of the HASAW Act then this is Worksafe's job.
It woudl be good to see an enlarged carro t at the other end of the sclae for those businesses who consistently invest in and work hard on protecting the safety of their staff.

ACC claims are often more to do with business' employees education: the better the employee is educated by the employer, the more they claim and the longer they ride it. The employer has no say anyway and has to accept anything and for any length of time. No workplace accidents are made to be workplace accidents also

There are employers who don’t take H&S seriously. They should not be paying the same as a business who invests in staff safety.