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Companies to get discounts and loadings on ACC levies

Wednesday 2nd March 2011

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A business with a good safety record will be able to decrease its ACC levies by as much as 50% under changes to the worker insurance scheme that start on April 1.

The new experience rating system, signalled late last year, gives discounts on levies for employers with a better claims history, similar to no claims discounts offered by private insurers, and puts loadings on those with a poor safety record.

"Experience rating is all about encouraging better workplace safety and getting people safely back to work after an accidental work injury. That's good for employers, it's good for ACC, and most importantly of all, it's good for the employees," Keith McLea, ACC general manager insurance and prevention services, said.

About 6670 businesses will be affected by the experience rating programme. Very large employers essentially self-insure via a partnership programme with ACC and a no claims discount programme will operate for smaller businesses or self-employed people with levies of less than $10,000 a year.

For businesses paying ACC levies of $10,000 or more, the levy will take into account the number of claims made by employees for work-related injuries, with medical costs of $500 or more over the previous three-year period, the length of time employees receive weekly compensation, and any fatal injury claim.

Levies can increase or decrease by up to 50% under the experience rating system.

Currently employers pay the same levy as others in the same industry, even though their safety record may be better.

They will receive a discount of 10% provided they have had no weekly compensation or fatal injury claims over the previous three years.

There will be no change for businesses or self-employed people generating between one and 70 weekly compensation days paid. A loading of 10% will be applied for businesses that generated more than 70 weekly compensation days paid or any fatal injury claim.

Last year there were 222,000 new workplace injury claims and ACC paid out $669 million for workplace injuries.

Employers will start seeing discounts in this year's invoice, many of which are sent in June.

By reducing the number of injuries now they can affect the experience rating for the following year.

"Even though experience rating starts on April 1, it will look at your claims history, which means that what you do right now matters. If you can improve workplace safety now, and reduce your claims, it will have a direct impact on the levies you pay later," McLea said.

"Business are very possible about it. They see it is a fairness thing," he said.

The amount collected overall will not change.

The scheme provided an incentive for high risk industries to improve their record.

Commenting on the Christchurch earthquake, McLea said the ACC minister could declare an adverse event which exempted businesses from experience rating changes from that event.



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