Government to maintain current ACC levies for two years to 'help ease financial pressures of COVID-19'

ACC Minister Iain Lees-Galloway.
ACC Minister Iain Lees-Galloway. Photo credit: Newshub

The Government is maintaining current ACC levy rates for the next two years to "help ease the financial pressure of COVID-19", ACC Minister Iain Lees-Galloway has announced. 

He said New Zealanders and businesses are facing "unprecedented financial pressures" because of COVID-19 and the Government is taking "practical steps to support levy payers" through the difficult times. 

"The economic outlook is uncertain, so holding levy rates is a prudent decision. It provides some certainty to businesses and other levy payers and gives ACC more time to reliably assess the impact of COVID-19 on its finances."

Lees-Galloway said ACC is also delaying invoices normally sent in early July. These will be issued in October to give firms more time and flexibility in making their payments. Other invoices issued this year will also be on hold for three months.

Everyone who works or owns a business in New Zealand pays levies to the Accident Compensation Corporation (ACC), the Crown entity responsible for administering the country's no-fault accidental injury compensation scheme.

The current earners' levy is a flat rate, currently $1.21 per $100 - excluding GST - of your liable income.

It's paid for by employers and those who do not pay ACC can be liable for significant penalties. Most employees are automatically covered and the levies are an employer cost - they cannot be deducted from your wages or salary.

The amount of levies you pay each year depends on factors such as what work you do and whether it's considered to be a risky profession. 

Lees-Galloway said the Government is also working on ensuring levies reflect the true costs of accidents and minimising long-term impacts on levy payers.

Levies will stay the same until 31 March 2022 for work and earners' levies, and 30 June 2022 for motor vehicle levies. There is no indication what will happen after that at this stage.