ACC Levy Review 2022-2024Last updated: August 16, 2021
ACC Levy Review 2022-2024
Published: August 16, 2021
Submitting To: Accident Compensation Corporation (ACC)
Issue for Business: ACC Levy Review for the Work, Earners and Motor Vehicle Accounts for 2022-2024 impacts on levy payers.
Action: ACC will be consulting on their proposed levy rate changes for the Work, Earners and Motor Vehicle Accounts in early September this year. While BusinessNZ has not received a pre-consultation briefing on the proposed levies, it is likely that there is the potential for significant levy rises across the 3 accounts, for two fundamental reasons. Firstly, most of the accounts were in a position of being significantly above the “full-funding” requirements under the ACC Act at the time of the last review (2018), hence levies were generally set below the level required to provide for full-funding in order to reduce the significant surpluses which had built up within each account. Second, with interest rates having dropped significantly over the last 2-3 years for a variety of reasons (including as a response by Government to try and reduce the impact of Covid on the economy), it has meant that discount rates that ACC and other insurance schemes use to assess liabilities and/or assets over time are also affected. Given the impact of annual levies on employers (around $800 million per annum), it is important that BusinessNZ monitors proposed levy decisions from ACC and ultimately the Minister for ACC to ensure transparency in the schemes funding and to minimise any issues which may arise in respect to cross-subsidisation between levy payers within each account.
Outcome: BusinessNZ has submitted on the ACC Levy Consultation Papers 2022-24 (Oct 21). Awaiting finalised positon on ACC levies to be made public by ACC (likely late Nov) before final levy announcements are made by the Minister of ACC (likely mid-Dec). Recently (mid-Dec) the Minister for ACC made an announcement on the ACC levies which will apply from next year.