Hefty ACC Fee Hikes From Next Year

Back a decade ago, the ACC was running a healthy surplus. In fact as recently as the 2022/23 financial year, it was in the black by almost $NZ1b. 

Not so much now, however, the government reporting an ACC deficit of $7.2b for the last financial year. And to add insult to the injury of a cost of living crisis, ACC levies are set to rise for each of the next three years. ACC blames the deficit on injury costs soaring in recent times. It reckons the cost of service and compensation to the injured rose 16 per cent in the past financial year.

The Government is essentially adopting the levy increases ACC recommended in September. The earners’ and business levies will increase by up to five per cent a year, for three years, from April 1 next year.

Minister for ACC, Matt Doocey, said that for someone on the $70k median wage, that’s an additional $42 the government will take for the 2025/2026 financial year, and an extra $140 in three years.

Motor vehicle levies will also rise, the average increasing by 7.8 per cent from July 1 to $123 per vehicle. It will increase by 7.4 per cent in each of the subsequent two years.

Motorcyclists will also pay more, a lot more. They must cover 37 per cent of the injury costs they and their passengers sustain. That’s a hike from the 28 per cent they currently pay.

The levy for a 500cc motorbike will rise by $23 next year to $321, then by another $121 the following year to $442, and by a further $91 to $533 in 2027/28.

And the government will sock it to EV owners as well. Their ACC levies will more than double to $109 next year. That’s over twice as much as the $49 petrol car owners will be charged. Why? Because EV owners don’t buy petrol which has an ACC component.

Doocey has announced an independent review of ACC because claimants are taking longer to be rehabilitated.

The review “will look at whether ACC has the right interventions and settings in place to support accident claimants…” he said.

The government wants to “achieve more targeted and cost-effective social rehabilitation services.”

ACC will be under scrutiny when Treasury releases its half-yearly fiscal update soon. The troubles at ACC may be exacerbated by a recent court ruling related to sexual assault victims. It means there could be another 100,000 people potentially eligible for ACC cover.