ACC $1,300 to $2,000 a year
December 11th, 2009 at 11:00 am by David FarrarAs expected, the increase in ACC levies is less than proposed, but are enough to stop the unfunded liabilities increasing.
What I find interesting is that the average worker now pays $1,300 a year in ACC levies. That is a huge amount of money. If workers paid it directly, I suspect there would be far far more support for reducing the costs of ACC. But workers pay it in three ways – through the employee PAYE levy, petrol tax and vehicle registration levels.
On top of that is the employer levy. Ultimately workers pay for this also, through lower wage levels. Employers factor the total cost of employment into decisions on staffing and wage levels. This is another $700 a year
So the average worker has $2,000 paid to ACC. The average after tax income is around $40,000 so ACC consumes around 5% of take home pay.
Over a worker’s life, they pay a huge amount of money into ACC. Are they getting value for money? I have my doubts. Of course it is the nature of accidents that some will be injured more than others, and need more support. But I suspect for 95% of levy payers, the benefits they get from ACC are miniscule compared to their lifetime contributions.
The Government has started off in the right direction by trimming some of Labour’s expansions to the scheme. I hope they continue to trim.I’m all in favour of families not being left starving when an income earner is unable to work due to an accident. I am more sceptical about ACC funding the myriad of providers of different medical services from counselling to physio. I’d rather we fund them through Vote Health for low income families rather than have someone on $100,000 get free phsyiotherapy for their skiing injury.
Tags: ACC
December 11th, 2009 at 11:30 am
Did we not have a politician who campaigned on the issue of ‘ongoing tax cuts’?
What happened to that guy?
Vote:December 11th, 2009 at 11:51 am
David, I don’t understand why you are taking this adversarial approach regarding ACC. ACC is the jewel in NZ’s crown, and what sets us apart from those unenlightened countries such as our neighbours across the Tasman. Whether or not the bulk of ACC levy payers are getting real value for money is a blatant right wing dog whistle. You know very well that ACC is a lifeline for the most vulnerable in our community, particularly physiotherapists and psychologists specialising in repressed memory syndrome. You are clearly agitating on behalf of your National paymasters to pave the way for privatisation so National’s rich prick insurance mates can swoop in and make huge profits.
December 11th, 2009 at 11:51 am
the benefits they get from ACC are miniscule compared to their lifetime contributions.
In a way I think i’d rather not get a full return on my payments, as that would mean getting injured and all that.
Vote:December 11th, 2009 at 11:55 am
Finally I have worked out why we have 4 new hearing centres in our neighbourhood, I thought there was some awful virus spreading that is causing the loss of hearing. You can get FREE hearing attention if you can blame it on work which unless you operated a jack hammer for 40 years (or sat next to Trevor Mallard at question time) is just plain ridiculous.
Vote:December 11th, 2009 at 11:56 am
TightyRighty at the the standard pointed out that you can have full deluxe health cover and subsidised dental for $1100 bucks a year from southern cross. he estimates to that accident cover on top would cost an extra $200-$300. that seems a bit light, but even given being out by 30% that still only takes it to $1500 a year for full health, surgical and accident, with dental. so how can a government monopoly be justified?
Vote:December 11th, 2009 at 12:00 pm
GMDI, not everyone can afford expensive private health insurance. Posting facts like yours is unhelpful.
Vote:December 11th, 2009 at 12:00 pm
Your dead right here, I considered myself reasonably in touch with news, politics, current events and finance and earn a pretty reasonable salary many times the average wage, yet I didn’t know that part of the PAYE which I paid there was an ACC levy, I knew about the employer one, but not that there is an employee one as well – they should make it mandatory for A) Payslips – my employer doesn’t give them – you have to log into a site. and B) a breakdown of the tax amount and what it is made up of, currently its just one line. Tax. Based on what I have now read , me an my wife are paying over $5000 a year in ACC levies, + the 2 cars and we haven’t made an ACC claim for at least 5 years ( so where’s our no claim bonus?), Yeah that sounds fair.. where is the opt out button im sure given we would have to be in the low risk category we could self insure for far less than this!
Vote:December 11th, 2009 at 12:29 pm
I wasn’t keen on the private cover moves National introduced – I was in business then and it added to admin and costs (initially at least). But since then the costs have soared, it’s now ridiculous. I can’t understand why National are continuing the current trend and not making drastic changes.
Earner Premium (ACC deducted alongside PAYE is calculated separately and it is up to the employers to provide separate totals if required. IRD will separate the totals. I’ve looked back at rates:
1997 0.7% maximum 556.26 on 79466
Vote:2000 1.3%
2001 1.1%
2004 1.2%
2006 1.3%
2008 1.4%
2009 1.7% maximum 1810.04 on 106473
2010 2.0%
December 11th, 2009 at 12:30 pm
DPF wrote:
“rather than have someone on $100,000 get free phsyiotherapy for their skiing injury.”
So if you earn good money (usually through hard work, huge personal risk and years of sacrifice to get there), pay a shit load of tax, and more tax on tax etc then you shouldn’t be covered for recreation?
A bit lefty there Dave!
[DPF: Not at all. The left support universal coverage. Righties tend to say lets help cover those who are not well off, but leave those who are comfortable to cover their own costs]
Vote:December 11th, 2009 at 1:13 pm
Right Now “GMDI, not everyone can afford expensive private health insurance. Posting facts like yours is unhelpful.”
Did you even read the post?
Apparently we are paying already close to this amount each under the current ACC scheme.
So I suggest we can afford it.
If the Govt raises ACC to $2000 per person, per year, I suggest that Private Medical becomes a lot more attractive.
Rufus
Vote:December 11th, 2009 at 1:15 pm
What would private coverage actually cost? No matter how poor I might be, if the govt gave me a choice between:
– government provided insurance coverage, one size fits all, no rating for risk, poor service, or
– private insurance that provides the same coverage at a same or lower cost
I know I’d always take the private. If it makes the lefties happier, we could wash the money through the govt coffers – you could keep paying through the tax system, but just choose which provider you were going to use.
Vote:December 11th, 2009 at 1:16 pm
RightNow
And that is why we have welfare… let me guess, it’s just not fair that one size won’t fit all. FFS – Nobody said that people should be sent home from hospitals to die (like happens now) because they don’t have insurance. There is always a need to prop up the bottom end of the equation and that is no different under ACC than any other method of funding cover.
Only a complete twat would think that the only way to provide cover for low earners is to shoe-horn everyone into the same system. Grow up ya loopy socialist twat. ACC is a crock – we all know it.
Vote:December 11th, 2009 at 1:18 pm
“Did we not have a politician who campaigned on the issue of ‘ongoing tax cuts’? What happened to that guy?”
It was all a ruse, a big con on the NZ electorate.
The “guy” you mentioned never existed. In fact, Key and his National government are nothing but Labour in drag, neo-socialists. You could count with the fingers in one hand the “reforms” Key, the empty suit, has carried out.
Why National’s inaction and timidity on ACC? Can’t Smith be instructed (told) to open it up to competition as soon as possible, instead of wasting his time attending the talk-fest in Copenhagen?
Vote:December 11th, 2009 at 1:38 pm
Oh FFS Rufus, burt and whoever else took my post as serious, I know it’s Friday but could you sharpen up your sense of humour?
Vote:December 11th, 2009 at 1:40 pm
RightNow, or RightNever, i didn’t advocate scrapping acc altogether. douche bag. i asked why the government needs a monopoly. and as Rufus helpfully pointed out, a lot of people are paying it already. i think that those who genuinely can’t afford it should be helped. but those who can should be given the option, no, made to to choose whether to pay the government to provide, or pay a private provider to do so. change your name to wrongonthisone. dick, jokes are usually funny.
Vote:December 11th, 2009 at 1:40 pm
I do not see why the “Jolly Walkers’ Club” should have to shell out money for the inevitable large ACC consumption that arise out of every motorcross meet.
All due respect the government have lacked balls in targeting high user groups. It failed to distinguish motorcross riders from road motorcyclists for a start.
Vote:December 11th, 2009 at 1:42 pm
I’ll tell you what’s a crock: no ACC-type system and these kind of car insurance rates. [pdf file: in case you don't want to download it, the average cost of insurance for 17-21 year old in the UK is £1,700]
Illegal to have no insurance in the UK, but it costs a fortune. For everyone.
Why? Because you have to factor in the medical costs from an accident if you don’t have an ACC type system. It’s the same with workplace accident insurance. No ACC type system, no government bar set, that means that the premiums only have to be competitive up to the point of their competitors. Read: anti-trust, etc.
If you don’t have ACC, you end up paying the same kinds of costs privately to cover the same kinds of risks. It’s not like not having ACC, opening it out to competition, privatising parts of it, using PPP for service delivery, or whatever, will free up money in your pockets. It’ll take more money out of it and put it through a different insurer.
And yes, you’ll have choice, but it’s the thin end of the wedge: eventually the insurers will start lobbying on the grounds that ACC makes them uncompetitive, and ACC charges will have to rise or ACC will have to go.
You won’t save money by having no ACC – in fact, for those of you with high powered vehicles, your private insurance without ACC would skyrocket.
Vote:December 11th, 2009 at 1:46 pm
And Chris, you think it’s OK that those of us without high powered vehicles should subsidise those who do? And that’s a good idea?
Vote:December 11th, 2009 at 1:50 pm
Well, ACC isn’t just car insurance, so that’s not everything, is it. For every car driver with a 6l V6 engine, there’s a snowboarder who doesn’t drive.
In the case of the snowboarder, the risk will either have to be pushed onto private insurance, or it’ll have to be pushed onto the public healthcare system.
Cost are always displaced, never eliminated.
Vote:December 11th, 2009 at 1:56 pm
GMDI, settle down, I agree with your position. I had meant my comment to be analogous to warmist’s not allowing facts that were unhelpful to get in the way of their cause, but clearly I was too obtuse.
Vote:December 11th, 2009 at 1:58 pm
RightNow: Brilliant! I was scroll-reading waiting for someone to cotton on there.
‘Not everyone has the willpower to budget a set amount of their income each pay day into a private insurance scheme, some low income people need the deduction made at source.’
Vote:December 11th, 2009 at 2:03 pm
Oh, and I should add: no fault means no fault.
There will be fault with private insurers. It’s how they avoid costs.
There will be a price paid for claims under private insurers. It’s either monetary, or a refusal to cover you for pre-existing conditions.
Vote:December 11th, 2009 at 2:15 pm
Chris C
OMG, that is terrible, imagine a system where the high risk individuals pay more. Oh no, The UK need a system like NZ…
WHY IS INSURANCE MORE EXPENSIVE FOR THAT DEMOGRAPHIC – BECAUSE THAT DEMOGRAPHIC HAS MORE ACCIDENTS….
Hell we can’t have that can we. May I suggest that you find out the cost for insuring the car you drive were it to be insured for an 18 year old male with a drink driving conviction.
Take that cost and pay the difference between that cost and your current insurance to your nearest charity – you will feel better than your own costs are set to the lowest (or highest) common denominator – it is simply not fair that you have a no claims bonus on your car insurance just because you haven’t claimed for years when other accident prone drivers don’t get the same benefits you do.
Oh, my grandmother’s cardigan won’t fit me either – shall I make her loose some weight and have her tits cut off or should I add some weight and get some breasts bolted onto my chest so one size fits all.
Vote:December 11th, 2009 at 2:19 pm
Thanks Master Hogwash. I never thought I’d be mistaken for a socialist but perhaps this lousy summer is dampening everyone’s sense of humour.
Vote:December 11th, 2009 at 2:33 pm
Chris C (197) Says:
December 11th, 2009 at 1:50 pm
Well, ACC isn’t just car insurance, so that’s not everything, is it. For every car driver with a 6l V6 engine, there’s a snowboarder who doesn’t drive.
In the case of the snowboarder, the risk will either have to be pushed onto private insurance, or it’ll have to be pushed onto the public healthcare system.
Cost are always displaced, never eliminated.
maybe we could privatise the cost of snowboarding by adding an extra levy to every season pass, or charging a levy on every snowboard bought. it is a rather elite sport, so maybe they could pick up their own tab?
Vote:December 11th, 2009 at 2:36 pm
I’ll give you a perfect example why ACC is such a mess. I broke my ankle a few months back, did the 6 weeks in a cast and when that was over started physio. Physio was/is making a massive difference to range of movement strength and pain etc. 6 weeks after getting out of the cast I had a meeting with the hospital fracture clinic where they discharged me to my GP. (IE: all OK – move on).
During that meeting I asked if I could have some more ACC funded physio and the Dr scribbled on a form for me to give my physio, which I did.
But what did the form say; it said ‘physio required’.. The physio can use that form to apply for more treatment if they think it is required. So this is how it works.
The person with the most knowledge of my injury (The hospital specialist) delegates the decision to spend public money to a person with the most vested interest (my physio).
It is no wonder that the system is being rorted – the key driver for a monopoly provider takes control again – make life simple for the administrators – it’s only public money.
Vote:December 11th, 2009 at 2:45 pm
GMDI
Excellent idea, add it to the season pass. Lets face it – people who can afford the gear, the time and the lift pass should be required to cover the risk – rather than socialise the cost with the karori ladies knitting club.
Vote:December 11th, 2009 at 2:45 pm
Chris C:
1. Cost can be eliminated if people change their behaviour. In the absence of price signals, people may snowboard more than they would if they paid the full price of their snow boarding. Funny how the market works.
2. Why would allowing private insurers mean removal of the no fault system? It didn’t last time we allowed private insurers. Are you sure you’re not frantically creating straw men to argue with?
Vote:December 11th, 2009 at 2:51 pm
Yes, but there’s no alternative. That’s the point. Instead of being forced to give your premiums to ACC, you’re forced to give a higher premium to a private insurance company. By law. So going from a situation where the government forces you to give to ACC, to a system where the government forces you to give to a private company.
And don’t kid yourself that premiums for other driver groups aren’t affected by the actions of other drivers, and don’t kid yourself that you’re guaranteed to get treatment or that the insurance company is going to pay out. Their primary duty is toward their shareholders, not the insured.
That’s partly why the argument about feeling better… charity… blah blah blah… huge non sequitur. It’s nothing to do with fairness, it’s the fact that “gutting” ACC isn’t going to solve the problems of paying out insurance, the cost, or the claims. Removing the public sector price control is going to cost you more, and you’re going to be forced to buy insurance, fault or no fault, no matter what happens. If the private sector insurance option was so great, then it wouldn’t be the number one motoring complaint in Europe. Okay, number two. Cyclists win.
You’re right, and herein lies the problem. In combination with burt’s experience above, I don’t see the fault as lying in ACC in terms of ACC’s existence, I see the fault as lying in the processes and procedures within ACC. As far as getting people fit and healthy in terms of short term injuries, and in comparison to a public health system or what you might get from a private insurer, ACC demonstrably works. What’s missing is an adequate set of controls to prevent the rort.
Although why someone would go to physio just because they wanted it is beyond me. If the doc and physio are recommending it without it being needed, then that’s a serious problem. If you tell the doc you think you need more, then it’s available, so why shouldn’t the doc give it to you if you ask? It’s contrary to a system where you’re allocated blocks of treatment that you get and it ends regardless of whether the problem is fixed or not.
Vote:December 11th, 2009 at 2:54 pm
Chris C: not sure that ACC does demonstrably work. Unless your definition of working covers:
Vote:– don’t care about cost effectiveness to those paying
– don’t care about incentivising people to stop working
– don’t care about disassociating people from consequences of their choices – bad employers pay the same as good employers
December 11th, 2009 at 2:58 pm
1. Costs can be eliminated if people change their behaviour. But why should we work on a system where we change behaviours to eliminate costs? Costs would be eliminated if we banned snowboarding altogether, or refused to pay out on any injury that wasn’t accidental as a result of a normal working day. That doesn’t mean it’s sensible or practical to do it.
2. Because private insurers are there to find fault. That’s what they do. They’re not providing a no fault system. They’re looking for someone to pass the costs on to. That’s why you exchange insurance details and your car sits in the shop for five weeks while they argue between themselves about whose fault it was. And if it’s your fault, then you pay because you lose your no claims and your premium goes up.
And may I suggest that you’re wrong – last time they screwed around with ACC, the number of claims dropped off dramatically, largely because the private insurance ethos had started to find… yes, fault.
Uh, it’s a no-fault system.
And I have to say, they’re all very subjective… who says that ACC disincentivises people to work? Evidence please.
Although I won’t be here to read it – I have a weekend of risky behaviour planned.
Vote:December 11th, 2009 at 3:07 pm
Chris C.
It is a pity you are not ‘the Govt’. You would put in place a system where all insurance for everything is thru one single govt run monopoly. Everyone would pay the same irrespective of weather they own a house, car, motorbike etc.
Hell some people own a house so it is only fair that we all pay for that becuause it would not be fair if people needed to pay for their individual choices, immagine if big house owners needed to pay more insurance than people who can’t afford a house… not fair… Hell my mountain bike costs thousands so why shouldn’t other people who can’t afford a mountain bike help me cover the risk of riding it.
I can see why you like ACC, like me you have a weekend of risky behaviour planned, unlike me you expect other people to underwrite it for you.
Vote:December 11th, 2009 at 3:13 pm
Chris C.
When was it made illegal to not own a car ?
Choices…. if young people want to drive high powered vehicles then there is a cost… what is so wrong with that? What is wrong with encouraging use of public transport and why should everyone else share the cost of the risky activities some people choose to get involved in ?
Vote:December 11th, 2009 at 3:15 pm
“I have a weekend of risky behaviour planned.”
Unprotected gay sex maybe?
Vote:December 11th, 2009 at 7:35 pm
Manolo: the fact that’s the first risky behaviour that comes to your mind……..
I assumed mountain biking, seeing as it’s summer. Maybe drinking to excess then mountain biking with a hangover.
Vote:December 12th, 2009 at 1:05 am
Hmm, the Goverment used to own Telecom. Do you think you’re paying a fair price for your line rental and calls now?
And what about electricity. Used to be dirt cheap when the Government owned all that too.
So, would you rather your ACC levies were raised, or that the entire system was changed, opening the doors for foreign corporate interference and having to fork out three times the current amount for half the coverage.
Vote:December 12th, 2009 at 7:35 am
“..opening the doors for foreign corporate interference and having to fork out three times the current amount for half the coverage. ”
A xenophobe has spoken.
Vote:Where are the facts to support your statement? What proof do you have that would be the case? Show us the data, not trite comments.
December 12th, 2009 at 11:10 am
Arent we missing something here.
Firstly the ACC levies DPF talks about are the employer and employee premiums. Car levies are entirely additional to this.
Secondly I can get health insurance for around $40 to $80 a month depending on plan. Lets go crazy and say thats $1200 a year for a pretty good package without waiting lists.
However ACC also covers loss of earnings insurance. I have no idea how much that would be, but lets say another 1000 a year.
This suggests that for about $2400 I can get first class medical and earnings insurance.
I am currently already paying $2000 for ACC levies. On top of which I have to register two cars and a couple of motorbikes. Most families have 2 cars, so thats another $600 in compulsory taxes.
Tell you what. I will undertake to pay $2000 in insurance premiums. and you can opt me out of ACC altogether.
Sound fair?
The fact is that government has its hand so far down my pocket, that its got to the stage that I at least expect a token reach around in exchange.
Vote:December 12th, 2009 at 11:47 am
“Hmm, the Goverment used to own Telecom. Do you think you’re paying a fair price for your line rental and calls now?”
Yep, dont have either of those with Telecom.
I dont know how people in this day and age continue to believe and spout this nonesense. We have real world examples, North and South Korea, East and West Germany. Free markets work (not that either Korea or Germany are perfect examples mind) and state ownership and control doesnt. Its not a thought experiment we have real world experience.
Vote:December 12th, 2009 at 3:56 pm
noskire
Either you are young and believe what anyone tells you or your memory is terrible. Before deregulation the cost of toll calls in NZ was OTT and international calls were extortionate. These rates dropped extremely rapidly when Clear introduced competition. Getting a phone hooked up could take months. It was a classic monopoly and we all paid for the tens of thousands of people employed doing stuff all in a govt intervention scheme to hide unemployment.
Vote: