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Double Charging By ACC: Government Theft

Thursday 15th Mar 2001 Ken Shirley Media Release -- Economy

ACT Deputy Leader Ken Shirley is calling on Michael Cullen to direct ACC to review all double charging and repay the aggrieved parties.

“It is known that upwards to $100 million may have been collected by ACC through double charging premiums for those businesses who changed their structure between 31st March 1980 and 30th June 1999.

“Businesses that registered with ACC prior to the 31st March 1980 are known as “first scheme” and businesses registering subsequently are classified as “latter scheme”. First scheme employers paid their annual ACC premiums in advance while latter scheme employers paid annual premiums in arrears.

“A problem arose in 1999 with the movement to competitive provision of workplace accident insurance and it became necessary for a reconciliation of payments with all employers required to make what was termed “final” ACC payments for the 1998/1999 year. These final payments should have recognised the difference between arrears and advanced payers, with arrears payers owing 12 months premium and advanced not owing a premium.

“The confusion arose when ACC reclassified a significant number of advanced paying employers as “arrears” payers forcing them to pay a second time for the 1998/1999 year. These changes in classification were based on the business having changed structure at some time between 31st March 1980 and 30th June 1999. Often the change amounted to no more than a sole trader becoming a partnership or vice versa, with no change in the essential nature of the business or workplace accident risk.

“The law passed in 1980 had a clear objective of redressing the difference of payment status when businesses ceased. However, subsequent Governments and Inland Revenue have demonstrably failed to put in place measures to ensure that this occurred thereby triggering the huge inequity in 1999.

“ACC has been telling those employers that it reclassified that they should have applied for a cessation adjustment at the time of restructuring. A cessation adjustment lodged with Inland Revenue effectively provides employers with one years’ ACC premium holiday and changed them from ‘advanced’ to ‘arrears’ payers.

“ACC has been telling employers that it is now too late to apply for a cessation adjustment whereas IRD, who administer the cessation adjustments, often failed to process cessation adjustments when they should have and has even stated that some employers that would have not been eligible for cessation adjustments in any event.

“The net result is that a significant number of employers have paid twice for the same year and the ACC monopoly is effectively demanding a double payment for the same service. No private sector company would be able to charge a client twice for the same service and only a statutory monopoly would arrogantly refuse to address the injustice.

“The arrogance of ACC in claiming this $100 million windfall stolen from employers is intolerable and it requires urgent intervention by the Minister to demand that ACC review all cases and make the appropriate repayments” concluded Ken Shirley.

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