Government confirms 2006/07 ACC levies

ACC levies for 2006/07 represent good news for motorists, no change on average for employers, and some increases for self-employed and wage and salary earners, ACC Minister Ruth Dyson said today.

Ms Dyson said that the government had adopted the levy rates recommended by ACC following public consultation. The rates have also been reviewed by the Department of Labour.

• The average composite motor vehicle levy will decrease by 8.2 per cent from $206.93 to $190.00, through a decrease in the vehicle licence fee.
• The average composite employer levy will remain the same.
• The average composite self-employed levy will increase from $3.22 to $3.54 for every $100 of earnings.
• The earner (or non-work) levy will increase from $1.07 to $1.16 for every $100 of earnings.
• All levies exclude GST.
• The levies are average rates. Individual rates for industry groups may increase or decrease based on recent experience.
• The new levies take effect from 1 April 2006, with the exception of the motor vehicle account which takes effect from 1 July 2006.

Ruth Dyson said in general, levy increases reflected upward pressures from the rising cost of healthcare, particularly for long-term claimants.

“For self-employed, their injury costs are rising while, at the same time, their leviable income has been static. If you have a flat pool of earnings to meet rising injury costs, it’s inevitable that levy rates have to rise.”

Ms Dyson said the self-employed levy rate increase also included the cost of a legislative change that improved weekly compensation for newly self-employed people whose previous earnings from paid employment can now be taken into account. This added six cents to the average levy.

The new rates will be implemented through regulations to be promulgated early next year.

Attached is a table comparing the 2005/06 and 2006/07 ACC levy rates. A background paper with more details is available at www.acc.co.nz under ‘media releases’ … or click here .