Have your say on ACC levies

We're keen to hear your views on proposed new levies, so tell us what you think during this consultation.
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Business owner
Do you own a business and employ people? You pay an ACC Work levy. Take a look at the proposed changes and give us your feedback.
Employee
Are you employed by someone and paid wages? You pay an ACC Earners' levy. Take a look at the proposed changes and give us your feedback.
Motorcyclist
Do you own a motorcycle? There are some proposed changes that are likely to impact you - take a look.
Self-employed or contractor
Do you own your own business or pay your own ACC invoices? Some of our proposed changes might impact you.
Vehicle owner
Whether you own a passenger vehicle, a business fleet or a motorcycle, there are some proposed changes that might impact you - take a look.
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Recommendations to the Minister

What do you think of our proposed changes to levy rates?

We're proposing changes to the levy rates in each of our Accounts (motor vehicle, work and earners') after looking at how much funding they each have and the expected costs of injuries.
Recommendations to the Minister

Should we increase the average levy for road injuries?

The number of road accidents and costs of treatment/rehabilitation are rising. We propose to increase the average Motor Vehicle levy to reflect these costs.
Recommendations to the Minister

Should we decrease the average levy for work injuries?

Costs of covering injuries sustained at work have gone down more than expected, so we’re proposing to decrease the average work levy paid by employers.
Recommendations to the Minister

Should we increase the levy for non-work injuries?

The number of accidents happening during everyday activities and those who need our support is growing. We propose increasing the levy employees pay for non-work injuries.
Recommendations to the Minister

Should we increase the maximum and minimum earnings we levy?

We propose increasing the threshold for maximum and minimum earnings people pay levies on to align with changes to labour costs and minimum wages.
Recommendations to the Minister

What do you think of our proposed levy changes for accredited employers?

We're proposing changes to fees for the Accredited Employer Programme and discounts under its Partnership Discount Plan.
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1 Sep 2021
Open for feedback

Tell us what you think about the proposed changes to levies.

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5 Oct 2021
Consultation closes

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

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Nov 2021
Recommendations to Minister

We'll provide your feedback to the Minister for ACC, alongside our recommendations on levy rates.

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Dec 2021
Government decisions

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

Levy consultation

We're recommending changes to levy rates over the next three-year period.

ACC must consult levy payers before recommending changes to levy rates. 

The deadline for submissions is Tuesday 5 October 2021. After considering the feedback we receive, we then present our recommendations to the Minister for ACC. The Government has asked for these recommendations to cover the next three years to provide you with certainty on future levies. 

The Government makes the final decision on the levy rates to be set for the next three years.  

 



ACC's levy rate proposals

All these proposals are available in full under the 'Open for feedback' tab above. 

The role of ACC

World leader for no fault accident compensation

ACC is the world’s only 24/7, no-fault, comprehensive accident compensation scheme. Each year we manage approximately two million claims. 

We use levies to fund a range of services to help injured people. These services include:  

  • treatment and rehabilitation costs  
  • compensation for loss of earnings if a person cannot work due to their injury  
  • childcare support 
  • home help 
  • transportation costs to and from appointments as required. 

                  This visual illustrates what levy funding is spent on. There is a big circle with a small circle containing a dollar sign in the middle of it. The big circle is made up of three wedges. The top left wedge shows images of a man with a broken arm in a sling and a doctor attending to another person sitting down, with the words ‘Treatment and rehabilitation costs’ above these images. The top right wedge shows an image of dollar sign in an arrow pointing down, with the words ‘Compensate loss of income’ above this image. The bottom wedge shows images of a man vacuuming, a taxi and a woman holding a child’s hand, with the words ‘Childcare, home help and transport costs’ below these images.                  

The levies not only provide peace of mind for workers through compensation for lost earnings, they allow employers to keep operating by freeing up funds to pay for temporary staff who cover for any injured workers.  

How levy rates are set

We calculate the recommended levy rates in three steps:

  • Forecasting the cost of future injuries. This is the New Year Claims Cost. 
  • Calculating the average levy rate to pay for the forecast injuries. This is the New Year Rate. 
  • Then making adjustments based on whether we have too much or too little funding for past claims, and whether we need to limit any increase to levies, to determine our recommended levy rates.

 This visual illustrates how ACC calculates levy rates. It shows a column at left with three parts and blue circles next to each part of the column. The top part states ‘Forecasting the total cost of future injuries’ with a magnifying glass icon above the words. The circle next to it states ‘New Year Claims Cost’. The part below the top step states ‘Calculating the average levy rate to pay for the forecast injuries’ with a calculator icon above the words. The circle next to it states ‘New Year Rate’. The bottom part states ‘Adjusting the levy rates’ with a spanner icon above the words. The circle next to it states ‘ACC’s recommended levy rates’.

Step 1: Forecasting the cost of future injuries - the New Year Claims Cost

We know a lot about injuries, such as how and when they happened, from over 40 years of collecting data.

We combine this knowledge with trends in the population and then estimate how many injuries and what type of injuries we expect to support each year.  

We also use our experience in supporting injured people to estimate the types of support which will be needed and for how long. We can then calculate how much this support will cost. This cost is called the New Year Claims Cost.

Step 2: Calculating the average levy rate - the New Year Rate

Once we’ve forecast the cost of supporting injuries, we then calculate the levy rate required to cover those costs.  This is the amount we need to charge each levy payer and is called the New Year Rate. 

Injuries are grouped into different Accounts.

  • The Motor Vehicle Account pays for injuries to people in/on motor vehicles travelling on public roads. This is collected through vehicle licensing fees (registration) and in the price of petrol.
  • The Work Account pays for injuries to workers that happen at work. This is collected from employers and self-employed people through an annual levy, based on the risk of their main business activity (i.e. the risk of getting injured a business’s type of work has on workers) and the size of their business.
  • The Earners’ Account pays for non-work injuries. This is collected from employees in their tax deductions and self-employed people in their annual levy payment.  This levy also contributes to the Treatment Injury Account.
  • The Non-Earners’ Account pays for injuries to people who don’t work (children, people not in the workforce e.g. retirees and the unemployed) and visitors to New Zealand. It is funded by the Government from taxes.
  • The Treatment Injury Account pays for injuries to people that occur while receiving medical treatment. This is funded by workers through the Earners’ Account and by the Government from taxes.

Step 3: Our recommendations for the levy rates

In this final step, we consider whether each Account has sufficient funds to pay for the support of injuries that have already occurred before the new levy rates apply.   

We can then adjust levy rates to return towards the funding target of 100% i.e. where funds in the Accounts are equal to the lifetime costs of injury, over ten years. This approach helps to avoid large changes in levies.

  • If there's more than we need (a surplus of funds), then we set levies at a level lower than required to fund the new year claim cost.
  • If the Account doesn't have sufficient funds to support existing injuries (a deficit of funds), we need to collect additional levy to make up the shortfall. 

Funding Policy Statement

Accident compensation is by nature a long-term activity with costs of supporting injuries (liabilities) that stretch over decades. In setting levies, it’s necessary to consider the long-term nature of the claims they will fund as well as provide levy payers with reasonable stability of levy rates over time.  

In 2016, the Government introduced the funding policy statement (later updated in 2021) to govern the funding of ACC’s levied Accounts. The statement is intended to improve: 

  • transparency around funding decisions, by making it clear how today’s funding decisions will impact the ACC scheme over future periods 
  • consistency and stability in decisions about levies over time by having a longer-term focus.

In 2019, the Government updated the Funding Policy Statement to: 

  • remove the use of a risk margin when assessing the lifetime cost of injuries (applying a risk margin increases the estimate of the lifetime cost of injuries)  
  • lower the targeted funding position to 100% (the funds we have in the Accounts should equal the assessed lifetime cost of injuries).  

This is the first levy consultation since the Funding Policy Statement was updated.

Funding Policy Statement in Relation to the Funding of ACC's Levied Accounts

We want to hear from you

ACC levies are currently set $1.38 billion below the true cost ($4.63 billion) of injuries each year.  

Continuing to collect levies below the cost of injuries is not sustainable over the long-term.  

Although ACC is recommending small adjustments to levy rates over the next three years, the proposed levy increases would still be set up to 43% below the cost of supporting injuries each year. 

                                           This visual illustrates that proposed levies are still below the cost of supporting injuries. There is a blue box at left showing an image of a broken arm in a sling with the words ‘Cost of supporting injuries each year’ below this image. To the right of this box is a shorter pink box with the words ‘Proposed levies’. Above this box is a pink bubble stating ‘Up to 43% below’. To the right of this bubble is an arrow, pointing up, with the words ‘Gradual levy adjustments’ across it. At the top of the visual are the words ‘Not sustainable long-term’. 

We’d like to hear your thoughts on these recommendations. Have a look at the topics that interest you and let us know what you think through the Feedback form on each page or by emailing ShapeYourACC@acc.co.nz.

Last updated: 6 October 2021