The Government has ordered a review of ACC and has confirmed the earners and business levy and those paid by motor vehicle owners are increasing.
The levy rises were subject to a consultation period in September and October.
"Today I am announcing that the earners and business levy is having to be increased by up to 5% a year for three years to meet the rising costs of the scheme," ACC Minister Matt Doocey said.
Examples to demonstrate new annual ACC levy payments for earner’s account. (Source: Supplied)
“For somebody on the median full-time wage of about $70,000 a year this equates to an additional $42 for the 25/26 financial year, or 80 cents a week, and an increase of $140 in three years’ time from this year’s levy rate.
"The levies paid by motor vehicle owners are also being increased by 5% plus an inflation adjustment per year for three years."
According to a fact sheet provided by Doocey, the levy for petrol car owners would increase $7.29 in 2025-26, $7.37 in 2026-27 and $7.51 the year after.
Those who own an electric car would see the levy go up $66.96 in 2025-26, followed by a $6.29 increase and then a $6.90 one.
Examples to demonstrate new annual ACC levy payments for motor vehicle account. (Source: Supplied)
Motorcycle levies are also increasing.
"I know that many Kiwis are doing it tough," Doocey said. "The staging of the increase in ACC levies reflects this."
In a statement Doocey said, "ACC’s performance has been declining for a decade".
"ACC provides critical support to New Zealanders in times of need, but I am concerned that ACC’s performance has been declining for a decade. Rehabilitation rates are down, weekly compensation costs are up and average costs per claim are up," he said.
"This review will have a particular focus on claims management.
Matt Doocey (file image) (Source: 1News)
"It will look at whether ACC has the right interventions and settings in place to support accident claimants to return to independence as quickly as possible.
"Alongside the review, I am working with the ACC Board and the Ministry of Business Innovation and Employment to strengthen performance monitoring and achieve more targeted and cost-effective social rehabilitation services.
"My priority is getting Kiwis rehabilitated and back to work and independence quickly.
"To achieve this, we must ensure ACC is set up to reduce long-term dependency and improve health outcomes, building on its 50 years of delivering injury prevention and no-fault personal injury coverage for New Zealanders.
File image of ACC branding. (Natalia Sutherland)
ACC chief executive Megan Main said more people were receiving weekly compensation and remaining on the scheme for a longer period with non-serious injuries, while the cost of rehabilitation and care services had risen significantly.
She said levies and funding of the scheme have not kept pace with these increases, meaning ACC spends around $2 billion more than it collects each year.
"The scope, cover and cost of the ACC scheme also continues to grow due to recent court cases and policy decisions, and we are also required to account for the lifetime costs of injuries that have already occurred,” she said in a media release.
"Health and social insurance schemes internationally are facing similar challenges in balancing scheme boundaries, rising healthcare costs and funding.
"The decision by Cabinet to increase levies will go some way to alleviating the pressure and ensuring the scheme is sustainable for future generations.
The new service has been three years in the making, after survivors and providers shared concerns about the limitations of the regime in place since 2014.
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Thu, Nov 28
"However, improving rehabilitation performance is a priority for ACC."
In October ACC announced a $7.2 billion deficit, compared to last year's $911 million surplus.
