The residual levy rate calculation was based on old injury rates which have become out-dated, going back 10 years or more. The residual levies themselves were a kind of catch up to make sure there were enough funds set aside to pay for ongoing claims predating 1999.

Now, all businesses will have their levies calculated on the most recent data around injuries and the likelihood of injury in their particular industries. Hence, while most will pay less, some will pay more.

The removal of residual levies alone would have seen decreases in their ACC contributions for around 53 per cent of Kiwi businesses, while 47 per cent would be paying more.

Levy reductions

The Government has agreed to the following changes to levies in 2016/17:

• 11% reduction to the average work levy taking it to 80 cents per $100 of liable earnings
• 4% reduction to earners’ levy, taking it to $1.21 per $100 of liable earnings
• 33% reduction to combined average motor vehicle levies (the petrol levy and annual licence levy), from an average of $194.25 currently, to $130.26 per vehicle

However, with other levy reductions (see above), the number of businesses paying more may come down to around 21 per cent. We’ll keep you updated.