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.

Have your say on proposed ACC levy rates for 2022-2025 

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

The proposals below describe how we manage our funding pressures and what’s driving our proposed changes. We’re seeking your feedback on these proposals.

Levy  Current 2021/22 levy rates  Proposed levy rate  Net change over 3 years 
2022/23  2023/24  2024/25 
Average Motor Vehicle levy rate per vehicle $113.94 per vehicle  $120.20  $128.83  $138.08  Increase of $24.14
Earners’ levy rate $1.21 per $100 wages  $1.27  $1.33  $1.39  Increase of $0.18
Average Work levy rate $0.67 per $100 of payroll  $0.63  $0.65  $0.67 No change
Examples of the impacts of the proposed increases 
  • A family with a household income of $129,000 and three vehicles (currently paying $36.36 per week in levies) would pay $38.24 per week in 2023; $40.21 in 2024; and $42.22 in 2025. 
  • A family with a household income of $85,000 and two vehicles (currently paying $24.11 per week in levies) would pay $25.44 per week in 2023; $26.76 in 2024; and $28.10 in 2025. 
  • A small home construction business with 8 employees earning $70,000 each and a small fleet of six vehicles (currently paying $192.85 per week in levies) would pay $166.05 per week in 2023; $171.28 in 2024; and $177.66 in 2025. 

                This image shows three boxes in a row illustrating current levy costs and the proposed costs in the next three levy years for different scenarios. The first box portrays a household with $129,000 income (shown in a yellow bubble) and owning three cars (these sit in front of a house). Above the bubble and the house/cars are three calendars. The first calendar states '2023' and the levy cost per week for that year ($38). The second calendar states '2024' and the levy rate for that year ($40). The third calendar states '2025' and the levy rate for that year ($42). Above the calendars is a line reading 'Current levy cost per week is $36'.The second box in the row portrays a household with income of $85,000 (shown in yellow bubble) and ownership of two cars (shown in front of house). Above the bubble/house are three calendars. The first calendar states '2023' and the levy cost per week for that year ($25). The second calendar states '2024' and the levy rate for that year ($27). The third calendar states '2025' and the levy rate for that year ($28). Above the three calendars is a line saying 'Current levy cost per week is $24'. The third box in the row portrays a small business with paying $70,000 average income (shown in yellow bubble) to eight employees (shown working on a house) and a fleet of six cars. Above the bubble/house are three calendars. The first calendar states '2023' and the levy cost per week for that year ($166). The second calendar states '2024' and the levy rate for that year ($171). The third calendar states '2025' and the levy rate for that year ($178). Above the three calendars is a line saying 'Current levy cost per week is $193.

We’ll review all feedback received and then make our recommendations to the Minister for ACC. The Government will make the final decision on any levy changes.   

Your views can influence the final rates set by the Government and inform future proposals to improve the levy system. This is your opportunity to have your say.  

Why we collect levies

ACC is unique in the world. No other country provides a 24/7 no-fault, comprehensive accident compensation scheme. Each year we manage approximately two million claims costing nearly $5 billion. Levies are critical in allowing us to provide New Zealand with this world-class scheme that helps protect our way of life.  

                                              This visual illustrates approximately how many claims we manage each year and what the cost is to support injuries claimed for. There is blue box at left stating ‘2 million claims’, then a grey connector line to a teal circle with an image of a New Zealand map in white. Another grey connector line links that circle to a yellow circle which states ‘$5 billion cost’.

We collect levies to cover the cost of supporting people who have been injured in an accident or are the victims of sexual and physical abuse. This includes treatment and rehabilitation, as well as income support if an injury prevents a person from working.  

For most people, this support lasts until they’ve recovered. For others, our support will continue for the rest of their lives.  

Current levies are below what's required to cover costs

Last year, ACC collected $3.24 billion through levies, but the total costs of that year’s injuries are expected to be $4.63 billion. Continuing to collect levies which don’t meet the cost of injuries each year is not sustainable over the long-term.  

                This visual illustrates that the levies we collect are below the cost required to support claims for injuries. At left is a blue circle stating ‘Levies collected $3.24 billion’. Just above this, to the right, is a pink circle stating ‘$1.39 billion shortfall’. Just below this, to the right, is a yellow circle stating ‘Expected cost of injuries $4.63 billion’.

As an example the average motor vehicle levy - which comes from vehicle licensing (rego) and petrol - is currently $117 lower than what we expected to need to cover the full cost of supporting people expected to be injured in road accidents this year when we set the levies in 2018.

Proposed changes to levy rates

As part of managing a successful Scheme for accident prevention, care and recovery, ACC must consider the long-term nature of funding some claims (i.e. supporting injuries that impact people for a long time). We also need to provide levy payers with reasonable stability of levy rates over time.

Government guidelines for calculating levies

To support this, the government has set a funding policy statement which defines how ACC should calculate levies.

  • This starts with calculating the full cost of supporting people to recover from their injuries.
  • An adjustment to levy rates is then made based on whether we have too much or too little funding for past claims and whether we need to limit any levy increase (average increases can’t be more than 5%, in addition to an allowance for expected inflation for the Motor Vehicle Account).

Provide your feedback

ACC would like your feedback on our recommended changes to levy rates in the 2021 Levy Consultation. 

You can provide your feedback now, or consider the more detailed proposals linked below.

Earners' Account: Should we increase the levy for non-work injuries?

Work Account: Should we decrease the average levy for work injuries?

Motor Vehicle Account: Should we increase the average levy for road injuries?

ACC is also consulting on further improvements to experience rating for our medium and larger business customers, and the Minister for ACC is consulting on proposals to change specific classification units for businesses and to update the rate of credit interest payable.

Submissions for these three consultations close on Tuesday 5 October 2021.

Proposals for experience rating

Minister's proposals for classification units and credit interest

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.