New ACC levy - more for less - Govt
Cabinet gave the green light to the new ACC average premium for employers today – delivering Government's promise of cheaper accident insurance levies.
Accident Compensation Minister Michael Cullen said Cabinet approved an average risk weighted premium of $1.16 for every $100 of wages, slightly higher than the $1.12 proposed by the Accident Compensation Corporation and lower than the $1.20 average premium on offer by private insurers.
"We have said all along that with increased efficiencies, better rehabilitation and claims management, a single state owned provider can offer lower rates than private insurance companies who are required to return a profit for their overseas owners.
"I am confident the new average levy is sustainable and prudent. The Accident Compensation Corporation will be under instruction to manage the coming year below the $1.16 per $100 of wages to create a small buffer which will smooth away some of the excesses of the current scheme.
"The overall average premium could be as low as $1.10 with discounts available to employers through observed conditions and good health and safety practices.
"Detailed costings of the Government's proposed changes to the Accident Insurance Act 1998 – the second Bill - to be introduced to the House later this year, are not yet complete but I expect the $1.16 to pretty much cover them. Expected changes include new lump sum payments and expanding the definition of accidents and coverage."
"As well as lowering the average cost weighted premium, the Accident Compensation Corporation has been able to slash the cost of long term claimants, called the "tail", from 67c to 40c per $100 of wages. The cost of funding long-term claims is continually falling through improved rehabilitation practices and claims management. The Inland Revenue Department currently collects long-term claim costs separately at the end of the year." Dr Cullen said.