Introduction

Scheme funding

Section 0. Introduction

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Scheme Funding

When employers and earners pay their ACC premiums, and drivers pay for petrol and their annual relicensing fees, they are essentially buying insurance cover from ACC.

Premiums paid, as well as the injury costs, were assigned to one of seven accounts:

  1. The Residual Claims Account, for all work-related injuries prior to 1 July 1999. The account is funded from employers’ premiums. Non-work earners’ injuries before 1992 are also met from this account.
  2. The Self-Employed Work Account, for work-related injuries to those self-employed people who chose to keep their accident insurance cover with ACC in the period 1 July 1999 to 30 June 2000. Since 1 July 2000 all work-related claims to the self-employed are paid from this account.
  3. The Earners’ Account, for people in the workforce (including self-employed covered by ACC) for injuries arising from accidents outside the workplace (often injuries resulting from accidents in the home or in sport or recreation).
  4. The Motor Vehicle Account, for all injuries involving motor vehicles on public roads. The account is funded from a tax on petrol sales and a component of the annual vehicle relicensing fee.
  5. The Non-Earners’ Account, for injuries to people who are not in the paid workforce. This account is funded by a direct payment from the government through general taxation.
  6. The Treatment Injury and Patient Injuries Account, for injuries that result from error by medical practitioners or from rare and severe outcomes of medical or surgical procedures. The account is funded from the Earners’ and Non-Earners’ Accounts.
  7. The Employers’ Account, for those work-related injuries for employees covered by ACC after 31 March 2000. Since 1 July 2000 all work-related claims to non self-employed people are paid from this account.

Under previous legislation, employers were required to take out accident insurance cover with private insurers for the period from 1 July 1999 to 30 June 2000. The Accident Insurance Amendment Act 2000 reinstated ACC as the default insurer for workplace accidents after 31 March 2000. Most private insurance contracts expired on 30 June 2000, but ACC provided cover for workplace accidents from 1 April 2000 for:

  • employees whose employer elected to cancel private insurance and return to ACC,
  • employees whose employer commenced business after 31 March 2000; and
  • employees whose employer had failed to take out private insurance.

© 2008 Accident Compensation Corporation

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