✨ Accident Compensation Levy Report
NEW ZEALAND GAZETTE, No. 22 — 11 MARCH 2016
| 2026/27 | 0.88 | 1,087 | 956 | 369 | 0.69 | 0.27 | 10,628 | 9,710 | 918 |
| 2027/28 | 0.88 | 1,124 | 990 | 380 | 0.69 | 0.27 | 10,905 | 10,014 | 891 |
The table above presents the projected levy and funding path after applying the Board’s funding policy. The table below summarises the key assumptions underlying these projections.
Work Account Key Assumptions
| Year ending 31 March | Claim numbers (entitlement claims) | Growth in average claim cost |
|---|---|---|
| Standard inflation (Labour Cost Index (LCI)) | ||
| ---------------------- | ----------------------------------- | ----------------------------------------------- |
| 2015/16 | 21,628 | 1.9% |
| 2016/17 | 22,058 | 1.9% |
| 2017/18 | 22,399 | 1.9% |
| 2018/19 | 22,669 | 1.9% |
| 2019/20 | 22,911 | 1.9% |
| 2020/21 | 23,146 | 1.9% |
| 2021/22 | 23,380 | 1.9% |
| 2022/23 | 23,610 | 1.9% |
| 2023/24 | 23,840 | 1.9% |
| 2024/25 | 24,066 | 1.9% |
| 2025/26 | 24,288 | 1.9% |
| 2026/27 | 24,494 | 1.9% |
| 2027/28 | 24,553 | 2.0% |
The following table compares the components of the 2016/17 prescribed average levy rate with those applied in 2015/16. The 2015/16 components are shown both as applied to set the levy rate in 2014 and as applied to set the levy rate for 2016/17.
Trend in underlying costs
| Levy excl. GST per $100 liable earnings | Initial 2015/16 (last year’s assessment) | Current 2015/16 (this year’s assessment) | Prescribed 2016/17 |
|---|---|---|---|
| Work Levy: | |||
| To fund the cost of new claims during the new levy year | $0.57 | $0.63 | $0.64 |
| To fund administration costs | $0.26 | $0.27 | $0.27 |
| Funding adjustment | -$0.25 | -$0.31 | -$0.11 |
| Current levy portion | $0.59 | $0.59 | $0.80 |
| Residual levy portion | $0.31 | $0.31 | $0.00 |
| Total average Work Levy rate | $0.90 | $0.90 | $0.80 |
The current estimate of claim costs for 2015/16 has increased reflecting higher volumes of new claims than anticipated. In addition, projections for claim durations have been increased to reflect recent trends in rehabilitation performance. 2016/17 claim costs are projected to increase compared with the current 2015/16 estimate because of medical and rehabilitation cost inflation (above the Labour Cost Index (LCI)).
The total average Work Account levy rate for 2016/17 includes a negative funding adjustment. While the total average Work Account levy collected in 2015/16 is sufficient to fund new year claims, a funding adjustment of -$0.11 for 2016/17 is required to move the Work Account towards its funding target.
Appendix B: Earners’ Account
Earners’ Account Long-term Projections
| Year ending 31 March | Levy rates excl. GST ($ per $100 liable earnings) | Earners’ Account and the earners’ portion of Treatment Injury Account |
|---|---|---|
| Levy ($m) | Lifetime cost of new year claims ($m) | |
| ---------------------- | ------------ | ------------------------------------------ |
| 2015/16 | 1.26 | 1,477 |
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NZ Gazette 2016, No 22
✨ LLM interpretation of page content
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Report in Relation to Rates of Levies Prescribed in the Accident Compensation (Work Account Levies) Regulations 2016 and the Accident Compensation (Earners' Levy) Regulations 2016
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🏥 Health & Social WelfareLevy rates, Accident Compensation, Work Account, Earners' Account, Financial projections, Funding policy, Levy stability, Funding stability, Claims experience, Investment returns, Risk-free interest rates, Economic conditions, Funding ratios, Work Account levy rates, Earners' Account levy rates