Levy rates for personal injury cover are reviewed and set every year. The review results in recommendations for levy rates to apply from the following year. Levy payers can comment on the proposed rates during a consultation period. The recommendations, with any changes resulting from the consultation, are submitted to the Minister for ACC. The Minister passes them on to the Government, which sets the final levy rates.
What are levies?
All payments to ACC by employers, self-employed people, earners, and motor vehicle owners and users for personal injury cover are called levies. Levies are set each year.
A small portion of levies collected are used to fund ACC’s numerous injury prevention initiatives and to operate the scheme.
Annual levy rates review
ACC is required to ensure that the levies collected are sufficient to cover all the costs of current and past injuries. The levies collected must be fair and kept as steady as practicable. This means that ACC must try not to collect too much or too little to cover the expected cost of injuries. We also try to avoid big changes in the levy rates.
Rates of injury, the mix of injury types and the cost of treating those injuries are changing constantly. Because of this, the levy rates must be reviewed to ensure that they are collected at the correct rate.
Each year, in July and August, we review injury numbers and costs to the Scheme. Recommendations for levy rates to apply from the following April are based on this review. We then manage a consultation period, usually four to six weeks long, in which levy payers can comment on the proposed rates.
Consultation on levy rate proposals
All levy payers are welcome to comment on the proposed levy rates and the ACC Scheme generally during the consultation period. This usually happens some time between 1 August and 31 October each year. There is a simple process for having your say:
- Get a copy of the consultation documents
- Read the documents carefully then decide what you want to say
- Make your comments in writing.
For more information, see Levy consultation.
We send a considered response to everyone who has made a submission during the consultation period.
Setting annual levy rates
We consider all submissions received during the consultation process. Not all submissions result in changes to the recommended levy rates. Some of the reasons for not making changes suggested in submissions are:
- we have submissions with opposite views
- the suggestion may create unfairness to a group of levy payers
- the suggestion may be too expensive to act on.
The ACC Board makes recommendations to the Minister for ACC based on the original review and the feedback received. The Minister then seeks advice from advisers (eg the Department of Labour) and recommends final levy rates to the Government.
These rates are passed into law by Regulations introduced under the Accident Compensation Act 2001. This happens in February or March and the new rates come into effect from 1 April for the Work, Earners’ and Residual Claims Accounts, and 1 July for the Motor Vehicle Account.
Last updated: 15April2009