ACC residual levies to go next year
ACC residual levies will be removed from next year, it's been confirmed.
ACC Minister Nikki Kaye says while residual levies were always going to be removed, it's still a "significant milestone" for the scheme.
"We will now have fairer work levies based on industries with the greatest injury costs paying their true share of those costs," she said.
Residual levies were introduced in 1999, when ACC moved from a pay-as-you-go basis to a fully funded basis.
That change meant ACC had to collect sufficient levies each year to meet the anticipated lifetime costs of all claims received that year.
The residual levies were needed to build up sufficient funds to meet the anticipated lifetime costs of claims received before 1999.
"Removing residual levies will have a redistributive effect, which will see an increase in work levies for businesses in some industries, and a decrease for others," Ms Kaye said.
"This is because instead of, on average, around one third of work levies being based on historical injury costs, and two thirds based on more recent injury costs, 100 percent of the levy will now reflect recent injury costs."
Removing residual levies will mean around 47 percent of businesses will receive a work levy increase, while the rest will receive a levy decrease.
However, if the removal of the residual levies coincides with other levy reductions, the extent of levy increases can be lessened.