ACC consults on 2009/10 levy rates

The Accident Compensation Corporation (ACC) is seeking submissions on its proposed levy rates for 2009/10.

``ACC levies can vary from year to year. The main factor is the cost of treating and rehabilitating injured people. The levies we consult on have been calculated to ensure adequate funds are available to cover the lifetime costs of our claims,’’ said ACC General Manager, Levy and Scheme Management, Dr Keith McLea.

``This year, ACC’s proposed levies have also had to take into account a number of external economic factors that were beyond our control but nonetheless impact the lifetime costs of our claims. Some examples include:
1. the advice we received about future inflation rates was higher than previously estimated. This increased our expected future ‘claims liability’.
2. increases in the prices we (and others) pay for health services, such as a 16% increase in elective surgery costs, a 17% increase in the amount paid to family carers and a 12.6% increase in the amount paid to contracted care providers.
3. new international accounting standards, which required us to value future liability higher.

All of these factors have contributed, to a greater or lesser extent, to the levies being proposed for 2009/10 and are also reflected in ACC’s financial statements for the year. In addition, again like everyone else, ACC received lower investment returns than expected due to the global credit crisis and this also had an impact on our financial statements.

The impact of these factors on individual ACC Accounts (e.g. Work, Motor Vehicle or Earners’) and their proposed levies varies depending on the previous state of each Account (e.g. the Work Account was over-funded and so can absorb some of the impact) and also depends on other issues such as how many new claims we received into each Account.

Dr McLea said that while levy rates were adjusted every year, ACC tried to keep rates as stable as possible using a variety of mechanisms.

The consultation period runs until 5pm on 8 October 2008. ACC will then consider the feedback and finalise its recommendations to the Minister for ACC. Cabinet then decides on the final levy rates that ACC will charge.

Interested parties should visit www.acc.co.nz/levyconsultation to see the relevant documents and process. You can also request a hard copy of the documents by emailing consultation@acc.co.nz or calling 0800 ACC RATES (0800 222 7283).