ACC levies frozen for two years

Businesses, the self-employed and motorists will have extra money in their pockets for the next two years after the Government decided to freeze hikes to ACC levies.

Businesses, self-employed workers and motorists pay a fee to ACC to contribute to the investment fund it uses to cover claims for the cost of accidents.

The Government made the announcement yesterday afternoon, saying it had decided to halt any price hikes to reduce financial pressure on people and businesses feeling the strain from Covid-19.

ACC Minister Iain LeesGalloway said the freeze gave businesses certainty.

‘‘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 Covid19 on its finances.’’ Businesses and self-employed people pay levies on their income to ACC to cover the cost of treatment for accidents and income support for people off work because of an accident.

Motorists also pay for ACC through a levy on petrol, currently

6 cents a litre, or through a levy

‘‘The economic outlook is uncertain, so holding levy rates is a prudent decision.’’

Iain Lees-Galloway

ACC Minister

charged on vehicle licences. These will also be frozen.

Lees-Galloway said ACC had already been helping by delaying invoices for businesses.

‘‘ACC is also helping businesses by delaying invoices normally sent in early July. These will be issued in October to give firms more time and flexibility in making their levy payments. Other invoices issued this year will also be on hold for three months.’’

The Government said ACC could afford the levy cut by changing its funding target from 105 per cent solvency for the levied accounts to 100 per cent solvency.

Lees-Galloway said this was ‘‘appropriate given ACC’s unique position as a mandatory, sole provider and Government-supported social insurance scheme’’.

He said the levies would stay the same until March 31, 2022, for work and earners’ levies, and June 30, 2022, for motor vehicle levies.