ACC Levy Confirmation 2022

The ACC has confirmed the levy rates for the next three years commencing from 1 April 2022.  

Scheme performance across all accounts is deteriorating and has been for a significant amount of time.  

Last year we collected $3.24 billion, but the total costs of injuries that happened in 2020 are expected to be $4.62 billion.

- Steve Maharey, ACC Board Chair

Employers will see significant cost increases

The average ACC Work levy rate is reducing from $0.67 to $0.63 per $100 of liable earnings. For employers, ACC claims costs are increasing because employees are having more injuries requiring longer time off work, resulting in significant days of lost productivity.

In the last five years the average duration of each claim (weekly compensation) has increased from 96.1 to 105.2 days off work. Frequency and durations are likely to continue to increase, and employers are struggling to access the ACC system to discuss return to work for their people. ACC is one of the few insurances where cover to accept claims is made without any discussion with the premium/levy payer, the employer.   

Changes to ratings discounts and loadings

Another major change is experience rating discounts and loadings. This currently sits at 50% discounts and 75% loadings. The ACC is wanting to amend this and increase the loading to 100%. Given that the experience rating is heavily reliant on ACC performance, some employers will see a significant increase to their overall levy.

Employers in ACC’s Accredited Employer Programme (AEP) are also affected as their risk is slightly increased but this is offset by the fact they are exempt from experience rating and importantly their return to work results have been significantly better than standard ACC. 

In summary

The headline messaging from ACC is that the levy rates are reducing despite the worsening performance. Looking closer, it is clear that the scheme performance is not sustainable and this can only mean significant future levy rises on current claim trends. It seems obvious that the change to experience rating is designed to offset the current losses and will have a significant impact on employers.