The Minister for ACC has announced that the Government is considering introducing ‘experience rating’ and ‘no claims discounts’ in the Work Account. (A recent amendment to the Accident Compensation (AC) Act 2001 has enabled these changes to be made). The changes would be aimed at providing a financial incentive to prevent injuries, encourage appropriate return-to-work programmes, and to make levies fairer for the businesses which pay them.
What does performance pricing mean?
Performance pricing means that the levy/premium each customer pays for their cover may in part be determined by their particular workplace performance (as measured through workplace injuries and return-to-work outcomes).
It is proposed that performance pricing will be applied in different forms, depending on the size of the customer’s business. The following options are being considered:
- An ‘experience rating’ modification could be introduced for customers who pay $10,000 or more annually in ACC levies – this would take into consideration a number of factors, including the customer’s performance in terms of claim frequency and duration, relative to others in their industry risk group. Customers with proven good health and safety and claims management behaviour could be rewarded with a discount on their levies, and those with poor claims histories could receive a ‘loading’ (ie a levy increase).
- Customers who pay less than $10,000 annually in ACC levies, could be given a ‘no claims discount’ if their workplace generated no weekly compensation claims, or a ‘loading’ (ie, a levy increase) if they exceed the maximum limit of weekly compensation claims.
For more detail on performance pricing, including experience rating, please see the Performance pricing frequently asked questions and answers (PDF73K).
Injury reduction through financial incentives
The proposed changes are intended to encourage a greater commitment to workplace safety and rehabilitation. Many of the financial incentives we’re looking to introduce will be dependent on customers engaging in improved return-to-work practices and reducing their work injury rates.
Public consultation
ACC will publicly consult on the proposals to introduce experience rating over the coming months. The dates are still to be confirmed; we’ll post more information to the news area of our website once it is available - please check in regularly.