NEW ZEALAND Accident Compensation Fees to Rise

New Zealand‘s ACC Releases Proposals for Increase to Levies

The Accident Compensation Corporation (ACC) of New Zealand has unveiled proposals to increase accident levies as part of its annual levy setting process.

The proposals relate to three ACC levies:
1. Work levy rates providing coverage for work-related personal injuries.
2. Earners’ levy rates providing coverage for non work-related personal injuries, e.g., at home or at sport).
3. Motor vehicle rates providing coverage for personal injuries involving moving motor vehicles on public roads.

John Judge, ACC chairman, said the need to increase levies was influenced by several factors. He said an increase in the number of claims received annually, rising health costs and Scheme extensions were major contributors to the need to increase levies to cover the current costs of the Scheme. Private health insurer Southern Cross also cited rising claim numbers and healthcare costs increasing well above the rate of inflation as key drivers for their deficit reported.

“We are also taking a more realistic approach to estimating future costs and liability. Other factors such as the global recession have had a compounding effect,” Judge said.

Judge noted ACC is required to develop its levy proposals under existing legislative provisions. However, the Minister for ACC is introducing amendments to the ACC legislation designed to have an impact on the final levy rates set for 2010/11 — in particular extending the date by which the Scheme must be fully funded. In addition, ACC is also undertaking a number of initiatives which may reduce the need for levy increases in the order it is proposing.

“The ACC Board appreciates there’s a limit to how much New Zealanders should be expected to pay in ACC levies, and that many will view the prospect of levy increases at this time with dismay,” Judge added. “We wish to stress that levy increases are not seen as the only answer to the challenges confronting the ACC Scheme – the focus must be on other ways to make the Scheme more sustainable and affordable in the long run.” (workersxzcompxzkit)

Further information, including consultation documents and actuarial reports relating to setting levy rates and the estimated outstanding claims liability, is available from www.acc.co.nz/consultation. Alternatively, call 0800 ACC RATES (0800 222 728) or send an email with your request to [email protected].

Author Robert Elliott,executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers’ comp issues.