What you don’t know about acc levy rates might not hurt you, but it will cost you a lot of money which is still painful. Imagine your money is your blood and your bank account is your body. As you profusely bleed you lose consciousness until you reach the terminal end. What a horrifying representation of what ignorance on ACC levy rates might lead you to. But as the saying goes, ‘’The truth will set you free’’, so continue reading this article and be enlightened. Let’s tame the beast that caused you to bleed while we still can, shall we?
How claims history affects your ACC levy rates
Everybody wants to work in a safe working environment, right?
As a business owner setting up a very strict precautionary measure is one of the biggest things you might consider since it plays a huge role in inviting future investors for business expansion plan or attracting the best employees to work with you.
Well, let me tell something. It is not only the investors and best employee applicants that recognise your effort in making your workplace safe. Your claim history affects your ACC levy rates as ACC give recognition to those company that are promoting safety by reducing the ACC levy rates. For those companies that have a good reputation in their ACC claims over the last 3 years, this one is for you.
If you are paying ACC levies of less than $10,000, you will be entitled to receive a 10% discount if there has been no weekly compensation days and no accidental death claim for the last 3 years under the No Claims Discount programme. ACC will conduct a review on how your company performed in the last 3 years in terms of claims and levy payments.
What will happen to you then if there are some claims for the last 3 years, will you still be eligible for this programme?
Unfortunately, no. If there has been any weekly compensation claim ranging from 1-70 days and there is no accidental death, your ACC levy rates will stay the same.
ACC reward those who take care of their team members but they also punish those who are not paying attention to safety in their workplace. If there has been any accidental death or weekly compensation claim of more than 70 days, your ACC levy rates will increase by 10%.
Now let’s take this to the next level. Say you own a massive company, paying ACC levies of more than $10,000 a year. Under the Experience Rating Programme, you will get up to 50% discount. Heard that? Up to 50% discount on your ACC levy rates. It will be the same process as the earlier mentioned programme, ACC will conduct the claims history and levy payment check over the last 3 years and they will decide how much will be your discount based on weekly compensation number of days, accidental deaths and number of your employees claims that is more than $500. However, like the other programme, if you have been performing horribly in your ACC claims for the last 3 years, ACC may also load your ACC levy rates by the percentage that ACC will decide on.
So, the choice is yours. Will you keep your workplace safe and get discount or will you not and get loadings? It’s actually a no brainer isn’t it?
How to reduce ACC levy rates by being the majority shareholder of more than one company
You wake up one day, look at the mirror and you say to yourself, “you are born an entrepreneur, and you will die an entrepreneur”. From that day, your drive to build up your business empire becomes relentless, so you ended up starting business after business.
Being the major shareholder of these businesses you became better in your time and resource management to keep up as they grow bigger and bigger and workload is more demanding. The country recognise your passion in making this a better place to live.
The first in line to give you the reward is ACC.They have a programme that will help you reduce your ACC levy rates based on the claims performance of all your business for the last 3 years. They will group all your business together and determine what percentage of discount they will give to you based on the performance of the grouped businesses as a whole. Whatever discount they will decide on, it will apply to all of your individual businesses.
Now you might be thinking, my several businesses fall under different ACC levy rates. Some businesses are more prone to hazard and some are purely office jobs, how will they assess them?
This actually becomes your advantage, they will review all your business as one group, and so the good claims reputation of purely office jobs business(less accidental risk) will help to paint a better picture for your building business (more prone to accidents). If after the assessment ACC decide to give you a discount this will be applicable for your building and office jobs businesses, in which you can take advantage of the savings on your building business since it has a higher ACC levy rates.
But, the not so good part of it is, if ACC found out that in the last 3 years your business is not doing so fantastic due to numerous accidents in your building businesses they will load the ACC levy rates with the percentage determined by ACC that will also reflect to all your business. This could be a disadvantage for the office jobs businesses since they will also carry the burden of paying loaded ACC levy rates.
Your businesses are tied together, whatever ACC will decide on, they will share the same consequences. They will take the pleasure of having the ACC levy rates discount or they will suffer the same pain of paying the loadings.
What your ACC Levy Rates pay for
You might be wondering why am I required to pay ACC levies? Shouldn’t it be an option for me to decide if I will cover myself and my business with accident only cover or I go with a customised full cover?
The answer is, not everyone is like you who is proactive in thinking about insurances. Most of the people will not care to take an insurance cover for the sake of saving money and not knowing that without a protection plan in place they are putting themselves in a more money hemorrhaging situation.
Government is thoughtful enough to think of your well-being, that is why they made ACC. On their page at what ACC Levies pay for, they mention it is built for the sole reason of protecting you from accidents. Accidents from the workplace, from doing your daily and recreational activities and even accidents that happen in a public road. Yes, you heard it right even if you are this innocent bus passenger that has been caught up in an accident, ACC will cover you for medical costs.
The ACC levies that you are paying will be distributed in five different ACC accounts. Each account is assigned to fund specific types of injuries. There is the Work Account, Earner’s Account, Motor Vehicle Account, Non-Earner’s Account and Treatment Injury account.
Now, since most of us here are business owners, let’s focus on the accounts that greatly concerns us which are the Work Account and Earner’s Account.
If you are an employer that is not working directly in the business, i.e. non shareholder employee, your ACC levy rates will be paying for 2 accounts. The Work Account and the Working Safe Levy(to support the Work Safe New Zealand Programme which focuses on projects that will help reduce the risk of having accidents). This will cover for all injuries or accidents that happens at work or any workplace related accidents. The higher accident risk rate your business activities have the higher ACC levy rates will be charged to you.
If you are an employer and you are also working in the business you will be paying ACC levy rates for 3 accounts. The Earner’s Account, Work Account and the Working Safe Levy accounts. The Earner’s Account will fund your claims from the accidents that might happen to you outside of the workplace. This may include accidents while you are skateboarding or when you slipped in the bathroom. This account also fund the Treatment Injury Account for any claim from any injuries related while you are having a medical treatment. The Work Account and the Working Safe Levy account were discussed earlier in the article.
As we all know, ACC only cover accidents. So, what will happen to you then if you are unable to work due to an illness? The answer my friend is you will need to recover at your own cost, because ACC will not be there for you – don’t worry somebody is there to save you. There’s a ton of ways on how to save ACC levies for self-employed and allocate the savings to get yourself and your business covered in the event of an illness and accident. To know more about it, give me a call. JD Life is empowered by the best ACC specialists and offer free consultation. You’ve got nothing to lose actually, only benefit from professional advice at absolutely no cost.
Now, you are about to reach the end of this article. If you think this information is still not enough, there is a lot of ACC specialists who can provide you more details, like JD Life ACC Specialists. There is no such thing as a stupid question so go ahead and have a chat with them. Ask questions.
Ignorance is a killer.
Till next time. Cheers.
Jaz Dosanjh
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