Changes confirmed by Government
Cabinet has announced what the 2019-21 levy rates will be. After reviewing your feedback and our recommendations they have decided there will be no change in the Earners’ levy, which will remain at $1.21 per $100 of liable earnings, paid by everyone in the paid workforce.
Our recommendations to the Minister
What we asked
We asked you about our proposal for the 2019 to 2021 levy period to increase the Earners Account levy from $1.21 to $1.24 per $100 of liable earnings.
What you told us
- Most submitters disagreed with our proposal. They told us current levies are too expensive and that the increase is unwarranted for those who rarely use ACC cover
- A small number of submitters supported the proposal. They told us the proposed increase is fair, and that the additional cost is a modest amount to pay for the injury cover they receive
- We received several suggestions on alternative ways to fund the increase to the Earner’s levy. This includes a higher levy for people who engage in high-risk sports and activities or to charge or exclude tourists from ACC cover.
The ACC Board recommends:
- Increasing the Earners Account levy from $1.21 to $1.24 per $100 of liable earnings.
We acknowledge the feedback received about the affordability of the levy increase, however, we're required to recommend levy rates that are consistent with the Government's funding policy. To address long-term cost pressures in the scheme, and avoid large levy increases in the future, we need to increase levy rates to maintain a fully funded scheme.
We acknowledge the proposed feedback regarding a higher levy for people who engage in high-risk sports and activities. The Earners’ levy is collected through the PAYE system which, while providing an efficient collection mechanism for employees only, allows for a flat fee to be charged to all employees.
Feedback was also received regarding the fairness of cover for tourists visiting New Zealand.
Most tourists contribute to levies via the petrol levy and those on a working visa contribute through their wages. We only pay treatment costs for tourists while they're in New Zealand and they're not eligible for weekly compensation for lost earnings. In return, overseas visitors forgo the right to sue if they're injured in New Zealand.
We'll have a decision from the Government on our recommendations in December.
Our original proposal
Most people earning a living in New Zealand pay an Earners' levy. This money covers claims for accidents that happen during everyday non-work activities such as DIY at home, or while out on the sports field.
Almost half of the money collected for the Earners' levy pays for weekly compensation. The rest pays for services such as surgery, rehabilitation, and preventing injuries from happening.
Calculate how much extra you might pay
Over the past two years, the number of accidents during everyday activities such as playing sport or doing DIY at home has increased. So too has the number of people that need weekly compensation.
These increased costs mean the levies we collect also need to increase. We want to make sure we have enough money to care for those that need our help.
If you want more detail on this topic and the reason we proposed this, see our full consultation document.