We’d like to explain how employees pay ACC levies, why they pay levies, how those levies are calculated and what they get in return.
What are ACC levies?
ACC collects money (called levies) to pay for the help we provide for people who are injured in accidents.
As an employee, you pay levies through your PAYE, and the amount you pay is based on how much you earn. They can be compared to insurance premiums.
Your levies, and those from other employees’, go into the ACC Earners’ Account, which funds ACC cover for people injured outside of work and not on the road – eg at home, playing sport or while taking part in recreational activities. (Self-employed people also pay the ACC Earners’ levy.)
There are four other ACC Accounts, which cover injured people who aren’t in the paid workforce, and those injured at work, in road crashes, or through personal injury caused by treatment.
You can find out more about the ACC accounts in the How we’re funded section of our website.
Why pay levies?
ACC levies are compulsory. If you’re injured in an accident, they help to ensure you’ll get the treatment and support, including financial, you need to recover and get back to normal life as quickly as possible.
Why do levies change?
In setting the levies we have to take into account a whole range of factors, including:
- the number of claims made in the past, and how many of them we’re still covering
- the number of claims we expect to receive in the current year – and how much they’ll cost in future years (especially serious injury claims)
- changes in New Zealand’s population
- accident, crash and hospitalisation rates and trends
- the costs of associated products and services, such as medical treatment and rehabilitation aids, including wheelchairs and hearing aids.
- our own financial position (for example, we’re currently trying to eliminate a $10 billion deficit from when we were pay-as-you-go) because the Government has changed our Scheme to be fully funded
- inflation rates and other economic factors
- our own operating costs (such as salaries and levy-collection costs).
We also include a ‘funding adjustment’ to allow for any surplus or shortfall in our previous estimates that could affect the current year.
When these things change, levies often have to change too.
How – and how much – do I pay?
As an employee, you pay your ACC levies through your PAYE – that is, the tax your employer automatically deducts from your pay.
The amount you pay depends on how much you earn. The current levy (which applies from 1 April 2010 to 31 March 2011) is $1.78 + GST for every $100 of your earnings ($2.04 including GST from 1 October 2010).
What are my levies used for?
When you pay your levies they go into the ACC Earners’ Account – one of five ACC Accounts that, together, pay for the services we provide to people who are injured in accidents.
The ACC Earners’ Account pays for claims made by people in paid employment who are injured outside work, such as at home, on the sports field or as part of a recreational activity. Injuries related to motor vehicle accidents on public roads are covered by the Motor Vehicle Account.
So what do I get for my money?
Your levies are used to pay for:
- injury prevention programmes, which aim to reduce the incidence and severity of injuries
- medical treatment (covering everything from doctor’s visits to major surgery) for people injured outside work
- vocational rehabilitation, which aims to help people injured outside work to get back to work or independent lives
- compensation:
- for people who can’t work because of their injuries (we cover 80% of their annual incomes after the first week)
- one-off payments to people whose injuries have left them significantly and permanently impaired
- if someone dies in an accident, help such as funeral grants, survivors’ grants and weekly compensation for their spouse or partner, children and other dependants
- social rehabilitation services, such as attendant care (for seriously injured people), childcare and help at home
- social rehabilitation-related aids and appliances, eg wheelchairs and home modifications
- the costs of managing the ACC Scheme, eg costs involved collecting levies.
How can I help reduce the costs of ACC cover?
The best way for you to reduce the levies you pay is to do your bit to reduce the injuries that are happening – at work, in our homes, while playing sports, and on our roads. By being safer, and encouraging others to be safer too, you could achieve some amazing results. The more injured people we need to support, the higher the levies.
It’s all about injury prevention – and you can start right now by keeping safe:
Can I have a say about the levies I pay?
Yes. We review all our levies every year and then make recommendations to the Minister for ACC – but before we make our recommendations to the Minister we invite New Zealanders to provide their feedback and ideas, this is what we call levy consultation. Public consultation on our proposed levies for the 2012/13 levy year has now closed. Find out more about the process and what happens next, in our Levy Consultation section.
Levy timetable 2012/13
A summary of the key stages of the levy consultation process. Find out what happens from consultation through to release of the new levy rates
What should I do if I get injured?
Find out about the first steps to get help when you’ve been injured, what to expect when you make a claim and how cover is decided.
Resolving issues
ACC aims to provide a high standard of customer service at all times. If you’re unhappy about how you have been dealt with or with a decision that has been made, please let us know.
Last updated: 16 August 2011