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Bonuses and penalties planned for levy-paying businesses

Contributor:
Fuseworks Media
Fuseworks Media
Nick Smith
Nick Smith

Wellington, July 14 NZPA - Businesses will receive up to 50 percent discounts or penalties on their ACC workplace levies from April next year, depending on their claims records, the Government has announced.

ACC Minister Nick Smith said today the changes were being made to provide stronger incentives to improve workplace safety and to make levies fairer.

There would be consultation with employer and employee groups on the details of his proposals over the next few months.

"The Government's ambition with these changes is to reward excellence in workplace safety and achieve a stronger focus on reducing injuries at work," he said.

"New Zealand's workplace safety does not compare well internationally with more than one worker killed and another 600 injured each week."

Dr Smith said employers paying more than $10,000 a year in ACC workplace levies would be eligible for a discount, or a penalty, of up to 50 percent based on their claims history over the previous three years.

That covered about 5000 employers with 690,000 employees.

For smaller businesses there would be a simple system of no-claims bonuses and high-claim loadings.

The proposal is that if no claim for weekly income compensation has been lodged in the preceding three years, the employer will receive a 10 percent no-claim bonus on their levies.

Penalties will apply where there has been more than four weekly income compensation claims in the last three years.

Dr Smith said it was expected that 220,000 small businesses would receive a discount while about 1000 would pay a high-claim loading on their levies.

He said the current system of averaging out levy payments meant businesses with good workplace safety were carrying the cost of those that were less safe.

"This detracts from the incentives for improving safety," he said.

"The new system of accident experience rating will reward those businesses that have safer work and return to work practices."

Dr Smith said he expected that businesses hit with penalty payments on their levies would quickly want to take up ACC's safety programmes and improve their record.

ACC chief executive Jan White, who was with Dr Smith at a press conference today, said the savings for big companies would be significant.

She gave as an example a big meatworks which paid levies of about $1 million each year. A 50 percent discount on that would make a real difference.

Accident experience rating was provided for in the ACC legislation from 1972 but it was repealed in 2000 by the previous government.

The statutory provision for it to be reinstated was in legislation passed in February this year and Dr Smith said officials were "fast at work on the detailed regulations and consultations to implement the new system on April 1, 2011".

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