ACC to pay back $100m

AUCKLAND: The Accident Compensation Corporation will refund more than 300,000 business customers $100 million plus accrued interest after overcharging them for 15 years.

Between 2002 and March 2017, when the error was discovered, the stateowned workplace insurer overcharged about 106,000 people in the first year of being selfemployed by a total of $34 million.

Over the same period, 200,000 businesses were overcharged $64 million on provisional invoices.

ACC uncovered the issue when preparing to introduce a new levy system and has started tracking down customers to repay them.

Phil Riley, head of business customer service delivery, said ACC regretted and apologised for the mistake and urged people to update their contact details with the insurer to help the process.

‘‘We expect it may take until April next year to complete the refund process,’’ he said.

‘‘We will begin refunding customers this month.’’

ACC has a provision for the refunds in its 2018 annual accounts, due to be tabled in Parliament next week.

Mr Riley said the refund had been factored into its latest levy consultation and accounted for a 1c increase in the work account, where a reduction was proposed, and less than 1c for the earner’s account, where a 2.5% increase was proposed. That would spread the funding impact over 10 years.

Mr Riley said ACC will pay the 90day bank bill rate at the year the invoice was due with monthly compounding interest, but would not speculate on how large that bill might be. The rate was 4.88% at the start of 2002, rising as high as 8.11% in 2008 and has since dropped to 2.84%.

The number of affected customers was relatively consistent in each of the years, he said.

The refunds for selfemployed people will average about $340 excluding GST and $415 for firms’ provisional payments.

ACC did not inform the minister until last December and Mr Riley said the previous administration was not informed.

The Crown entity will seek feedback on whether to adopt payments in arrears from the selfemployed, matching the way they pay income tax.

❛ We expect it may take until April next year to complete the refund process Phil Riley