Recommendation with Minister

Should we decrease the average Work Account levy?

Costs in the Work Account went down more than expected, so we’re proposing to decrease the average Work Acount levy.

Our recommendations to the Minister

What we asked

We asked you about our proposal for the 2019 to 2021 levy period to decrease the average Work Account levy from $0.72 to $0.67 per $100 of liable earnings.

What you told us

  • There was overwhelming support to decrease the average Work Account levy. Submitters told us the levy is a significant cost to their business, and they welcomed a reduction
  • Submitters who opposed the proposal believe the Work Account levy should be left as is with the additional funds used to improve our services
  • Some submitters were concerned how a reduction in the levy for 2019-21 could impact the ability for us to remain fully funded and/or provide full coverage in the future.

We also received a range of suggestions on how to reduce the number of work accidents in the future. These included:

  • more training
  • changing workplace safety culture
  • reducing workplace stress
  • and providing financial incentives to business.

Our recommendation

The ACC Board recommends:

  • Decreasing the average Work Account Levy from $0.72 to $0.67 per $100 of liable earnings.

We acknowledge the support received for decreasing the average Work Account levy. We also note that the presence of surplus assets allows the levy to be so low, despite increasing cost pressures and claims in the Work Account.

We've embarked on a significant change programme that will improve the:

  • services provided to injured people
  • professionals working with them while they recover
  • businesses that are being impacted by the loss of a worker.

The projected solvency ratio of the Work Account as at 1 April 2019 is 118%. As this is above the funding target of 105%, we're using some of the excess funds to subsidise the cost of claims for businesses.

 

We'll have a decision from the Government on our recommendations in December.

Our original proposal

All employers and self-employed people working in New Zealand pay an average Work Account levy. We use this money to pay for injuries caused by accidents that happen at work or are work-related.

In the Work Account, various factors have contributed to costs going down, so we're proposing to decrease the average Work Account levy. The average levy is the rate that all employers and self-employed people in New Zealand would pay if we charged a flat levy rate.

Calculate what the Work levy changes could mean for you
Estimate how much your business levies will be for the year, so that you know what to expect when your invoice arrives. Due to high demand, this calculator may be slow. Please bear with us while we fix it.
Step 1 of 3
What type of work do you do?
helper iconEnter a keyword or your business industry description
Step 2 of 3
Your business structure
Are you a sole trader?
You work for yourself as a freelancer, contractor or as your own business.
Do you employ staff?
You or your business has staff that you employ.
Are you a shareholder employee?
You own part of a business and also work for that same business.
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Step 3 of 3
Your income and payroll
$
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Do you work full-time?
This field is required
helper iconFull-time is more than 30 hours a week on average over a tax year.
$
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$
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Sole trader

What you are currently paying:
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{{userInput.structure.soleTrader.WL.v | dollarize}}
{{userInput.structure.soleTrader.EL.l}}: {{userInput.structure.soleTrader.EL.v | dollarize}}
{{userInput.structure.soleTrader.WSL.l}}: {{userInput.structure.soleTrader.WSL.v | dollarize}}
{{userInput.structure.soleTrader.GST.l}}: {{userInput.structure.soleTrader.GST.v | dollarize}}
Total: {{ userInput.structure.soleTrader.levyTotal | dollarize }}
What we propose you pay:
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{{userInput.structure.soleTrader.P_WL.v | dollarize}}
{{userInput.structure.soleTrader.P_EL.l}}: {{userInput.structure.soleTrader.P_EL.v | dollarize}}
{{userInput.structure.soleTrader.P_WSL.l}}: {{userInput.structure.soleTrader.P_WSL.v | dollarize}}
{{userInput.structure.soleTrader.P_GST.l}}: {{userInput.structure.soleTrader.P_GST.v | dollarize}}
Total: {{userInput.structure.soleTrader.P_levyTotal | dollarize}}
Difference:
{{userInput.structure.soleTrader.WL.l}}
{{userInput.structure.soleTrader.WL_Difference | dollarize}}
{{userInput.structure.soleTrader.WL_Difference_Text}}
{{userInput.structure.soleTrader.EL.l}}: {{userInput.structure.soleTrader.EL_Difference | dollarize}}
{{userInput.structure.soleTrader.WSL.l}}: {{userInput.structure.soleTrader.WSL_Difference | dollarize}}
{{userInput.structure.soleTrader.GST.l}}: {{userInput.structure.soleTrader.GST_Difference | dollarize}}
Total: {{userInput.structure.soleTrader.levyTotal_Difference | dollarize }}
What’s driving our thinking

Over the last two years, people returned to work quicker than expected after a workplace accident. This means we’ve had less weekly compensation to pay than forecast. We've also had other costs go down in the Work Account so we're proposing to decrease the average Work Account levy.

The average levy is the rate that all employers and self-employed people in New Zealand would pay if we charged a flat levy rate.

However, some businesses will see less of an increase than others, and some will see a proposed increase. This is because some industries have reported a higher number of accidents over the past two years, which increases the levy for businesses operating in those industries.

Your details:

Industry: {{userInput.bic.text}}

Structure: Sole trader

Projected income: {{userInput.structure.soleTrader.amountParsed | dollarize}}

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Your projected income may be impacted by the full time minimum, or a threshold known as the Liable Earnings maximum. Read our liable earnings proposal for more information.

Shareholder

What you are currently paying:
{{userInput.structure.shareholderEmployee.WL.l}}
{{userInput.structure.shareholderEmployee.WL.v | dollarize}}
{{userInput.structure.shareholderEmployee.EL.l}}: {{userInput.structure.shareholderEmployee.EL.vgst | dollarize}}
{{userInput.structure.shareholderEmployee.WSL.l}}: {{userInput.structure.shareholderEmployee.WSL.v | dollarize}}
{{userInput.structure.shareholderEmployee.GST.l}}: {{userInput.structure.shareholderEmployee.GST.v | dollarize}}
Total: {{userInput.structure.shareholderEmployee.levyTotal | dollarize}}
What we propose you pay:
{{userInput.structure.shareholderEmployee.P_WL.l}}
{{userInput.structure.shareholderEmployee.P_WL.v | dollarize}}
{{userInput.structure.shareholderEmployee.P_EL.l}}: {{userInput.structure.shareholderEmployee.P_EL.vgst | dollarize}}
{{userInput.structure.shareholderEmployee.P_WSL.l}}: {{userInput.structure.shareholderEmployee.P_WSL.v | dollarize}}
{{userInput.structure.shareholderEmployee.P_GST.l}}: {{userInput.structure.shareholderEmployee.P_GST.v | dollarize}}
Total: {{userInput.structure.shareholderEmployee.P_levyTotal | dollarize}}
Difference:
{{userInput.structure.shareholderEmployee.WL.l}}
{{userInput.structure.shareholderEmployee.WL_Difference | dollarize}}
{{userInput.structure.shareholderEmployee.WL_Difference_Text}}
{{userInput.structure.shareholderEmployee.EL.l}}: {{userInput.structure.shareholderEmployee.EL_Difference | dollarize}}
{{userInput.structure.shareholderEmployee.WSL.l}}: {{userInput.structure.shareholderEmployee.WSL_Difference | dollarize}}
{{userInput.structure.shareholderEmployee.GST.l}}: {{userInput.structure.shareholderEmployee.GST_Difference | dollarize}}
Total: {{userInput.structure.shareholderEmployee.levyTotal_Difference | dollarize}}
What’s driving our thinking

Over the last two years, people returned to work quicker than expected after a workplace accident. This means we’ve had less weekly compensation to pay than forecast. We've also had other costs go down in the Work Account so we're proposing to decrease the average Work Account levy.

The average levy is the rate that all employers and self-employed people in New Zealand would pay if we charged a flat levy rate.

However, some businesses will see less of an increase than others, and some will see a proposed increase. This is because some industries have reported a higher number of accidents over the past two years, which increases the levy for businesses operating in those industries.

Your details:

Industry: {{userInput.bic.text}}

Structure: Shareholder employee

Projected income: {{userInput.structure.shareholderEmployee.totalAmountNotCapped | dollarize}}

helper icon

Your projected income may be impacted by a threshold known as the Liable Earnings maximum. Read our liable earnings proposal for more information.

Employer

What you are currently paying:
{{userInput.structure.employer.WL.l}}
{{userInput.structure.employer.WL.v | dollarize}}
{{userInput.structure.employer.WSL.l}}: {{userInput.structure.employer.WSL.v | dollarize}}
{{userInput.structure.employer.GST.l}}: {{userInput.structure.employer.GST.v | dollarize}}
Total: {{userInput.structure.employer.levyTotal | dollarize}}
What we propose you pay:
{{userInput.structure.employer.P_WL.l}}
{{userInput.structure.employer.P_WL.v | dollarize}}
{{userInput.structure.employer.P_WSL.l}}: {{userInput.structure.employer.P_WSL.v | dollarize}}
{{userInput.structure.employer.P_GST.l}}: {{userInput.structure.employer.P_GST.v | dollarize}}
Total: {{userInput.structure.employer.P_levyTotal | dollarize}}
Difference:
{{userInput.structure.employer.WL.l}}
{{userInput.structure.employer.WL_Difference | dollarize}}
{{userInput.structure.employer.WL_Difference_Text}}
{{userInput.structure.employer.WSL.l}}: {{userInput.structure.employer.WSL_Difference | dollarize}}
{{userInput.structure.employer.GST.l}}: {{userInput.structure.employer.GST_Difference | dollarize}}
Total: {{userInput.structure.employer.levyTotal_Difference | dollarize }}
What’s driving our thinking

Over the last two years, people returned to work quicker than expected after a workplace accident. This means we’ve had less weekly compensation to pay than forecast. We've also had other costs go down in the Work Account so we're proposing to decrease the average Work Account levy.

The average levy is the rate that all employers and self-employed people in New Zealand would pay if we charged a flat levy rate.

However, some businesses will see less of an increase than others, and some will see a proposed increase. This is because some industries have reported a higher number of accidents over the past two years, which increases the levy for businesses operating in those industries.

Your details:

Industry: {{userInput.bic.text}}

Structure: Employer

Projected income: {{userInput.structure.employer.amountParsed | dollarize}}

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More information

If you want more detail on this topic and the reason we proposed this, see our full consultation document.

ACC levy proposals for the 2019 to 2021 levy period
PDF 3.8 MB
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27 Sep 2018
Open for feedback

We were open for feedback from 27 September to 25 October 2018.

25 Oct 2018
Closed for feedback

We've reviewed your feedback. Thanks for telling us what you think!

Nov 2018
Recommendation with Minister

We've reviewed your feedback and based on what you've said we've made recommendations to the Minister. 

Dec 2018
Changes confirmed

Based on your feedback and agreement from the Minister, we've now confirmed our changes. Have a look at the topic to see what we've agreed.