Information about the 2015/16 levy
rates for Levy Risk Group 673:
Property development and operation
Non-residential property operators and developers (excluding
construction)
Residential property operators and developers (excluding
construction)
Contents
Introduction........................................................................................ 4

The levy setting process........................................................................... 4

About this document................................................................................. 4
Levy components .............................................................................. 5

Employers ................................................................................................ 5

Self-employed people............................................................................... 5

Why do levy rates change? ...................................................................... 6
Work levy rates .................................................................................. 7

What are the 2015/16 Work levy rates? ................................................... 7

Capping the changes to Work levy rates – current portion ....................... 7

Levy for pre-1999 claims – residual levy portion ...................................... 7

How can I work out my ACC levies for 2015/16? ..................................... 8

What is experience rating? ....................................................................... 8
Levy risk groups ................................................................................ 9

What is the claims trend in this levy risk group? ....................................... 9

How are levy risk groups structured? ..................................................... 10

What is the earnings trend in this levy risk group? ................................. 10

How does ACC set levy rates? ............................................................... 10

What does this mean for setting the levy rate? ...................................... 11
Workplace injury prevention ............................................................ 12

What can I do to reduce rates? .............................................................. 12
2

Workplace safety incentive programmes and injury management
resources ............................................................................................................ 12
More information.............................................................................. 13

Where can I get more information? ........................................................ 13
Glossary of ACC terms .................................................................... 14

Accredited Employer Programme (AEP) ................................................ 14

Business industry description code (BIC) ............................................... 14

Classification unit (CU) ........................................................................... 14

Current levy portion ................................................................................ 14

Experience rating ................................................................................... 14

Levy........................................................................................................ 14

Levy consultation ................................................................................... 15

Levy risk groups (LRGs)......................................................................... 15

No-Claims Discount Programme ............................................................ 15

Residual portion of the Work account levy ............................................. 15
3
Introduction

The levy setting process
The annual levy setting process is divided into three parts:
Consultation: The proposed rates are made public and feature in the New Zealand
Gazette (the official newspaper of the New Zealand Government), the major metropolitan
newspapers, and under Consultation Documents on www.acc.co.nz.
All interested parties have a period of 28 days to make a written submission on the
proposals. The ACC Board will then consider all feedback and finalise their
recommendations on the levy rates and submit these to the Minister for ACC.
Indicative: Once the levy rates are approved by the Cabinet they become indicative. The
drafting of the levy regulations takes place in preparation for the regulations coming into
force on 1 April of the following year. During this time the rates are a true ‘indication’ of
what they will be for the following year and this is why they are considered indicative only.
Final: On 1 April the levy regulations will come into force and the rates that have been
approved by the Cabinet are effective. These rates are now final and will be used for levy
calculations for that levy year.

About this document
This document provides information specifically for the Levy Risk Group 673 (Property
development and operation), including the Work levy rates for 2015/16 and the number of
injuries and cost of claims (which is a key driver of your rates) for your industry.
4
Levy components

Employers
Employers pay a Work levy to cover work-related personal injuries affecting your
employees. The amount of the Work levy is based on how much you pay in wages (your
payroll) and what type of industry your business is in (your classification unit or CU).
The levy rate is charged on your payroll for the 2015/16 year, subject to the maximum
liable earnings limit of $120,070 for any one employee.
The employer Work levy is made up of two parts:

1.
Levy for 2015/16 work claims – current portion
Funds the lifetime cost of work-related injuries that occur between 1 April 2015
and 31 March 2016 plus any adjustment for over or under-funding of claims in the
period from 1 July 1999 to 31 March 2015.
2.
Levy for pre-1999 claims – residual portion
Funds the ongoing costs of work-related injury claims that occurred prior to 1 July
1999, when the Scheme changed to a full funding model (this levy will cease after
2019).
Self-employed people
You pay a Work levy to cover your own work-related personal injuries. You also pay a
non-Work levy to cover your non-work personal injuries, except where you are paid
income that is subject to PAYE.
The levy rate is charged on your earnings from self-employment (excluding earnings
from income such as investments) for the 2014/15 tax year, subject to the maximum
liable earnings of $118,191, and is also based on the type of work you do (your CU).
Your self-employed levies have three parts:
1 & 2. The employer Work levy
This is made up of two parts as outlined above.
3.
Earners’ levy for 2015/16 non-work claims
This is also made up of two parts as detailed below:
a.
The residual levy portion, which covers ongoing costs for non-work-related
injuries to earners between 1 July 1992 and 30 June 1999.
b.
The current levy portion that funds the costs of non-work injuries that are
expected to occur during the 2015/16 year and any adjustments to funding
requirements for claims that occurred in prior years.
For 2015/16 the Earners’ rate is $1.26 (excluding GST) per $100 of earnings from selfemployment.
5

Why do levy rates change?
The 2015/16 levy assessment is not done in isolation. To work out what we need to
collect, we look back at the claims we’ve received in the past from each levy risk group.
Using this information we predict how many claims we’ll get in the next year and what
they’ll cost (not just in the next year but until each claim is closed). We can also include a
‘funding adjustment’ to allow for any surplus or shortfall in our previous estimates of the
ongoing costs of claims for injuries that happened after 1999.
The overall aim is to ensure the Scheme continues to be funded adequately and to
manage levy stability and smoothing over time.
ACC also takes into account changes in:
•
the number of employers and self-employed people in each levy risk group
(including any CUs moving into and out of the group)
•
the wages paid by employers and earnings of self-employed people in each levy
risk group (referred to as simply ‘earnings’ below)
•
the expected number of claims
•
the expected cost of claims.
6
Work levy rates

What are the 2015/16 Work levy rates?
The table below shows the 2015/16 Work levy rates (current portion) for employers and
self-employed people compared to last year’s rates.
The levy rates shown are the dollar amounts you would pay for each $100 of wages or
earnings from self-employment. All rates shown exclude GST.
Work levy rates (current portion)
Classification unit (CU)

Rate for 2015/16
Number
Description
Rate for
2014/15
Change
due to
previous
year’s
capping
77110
Residential property
operators and
developers
(excluding
construction)
$0.44
$0.00
-$0.04
$0.00
$0.40
$0.00
$0.40
77120
Non-residential
property operators
and developers
(excluding
construction)
$0.44
$0.00
-$0.04
$0.00
$0.40
$0.00
$0.40
Average
rate
change
impact
Impact
of
change
in
relativity
Base
rate for
2015/16
Capping
impact 1
Rate
for
2015/16
Capping the changes to Work levy rates – current portion
To smooth the financial impacts of annual levy changes, we cap the current portion of the
Work levy for each individual CU. In the 2014/15 year the cap prevented levies from
changing by more than 25% in addition to any decrease in the average work levy.
For the 2015/16 levy year the capping rules will be maintained as follows:
• increases will be capped at +25% or 4 cents (whichever is the greater)
• decreases will be capped at -25% in addition to the change in the average rate.
However, we still have to ensure that the Scheme can fund the overall expected costs, so
any net shortfall caused by the cap is funded by all other Work Account levy payers.

Levy for pre-1999 claims – residual levy portion
The Accident Compensation Amendment Act 2010 changed the way the residual portion
of the Work Account levy was calculated:

1
Where classification rate changes have not been limited by capping, the impact on the rate will be to cover the net funding
shortfall or surplus caused by capping levy rate changes.
7
• 31 March 2019 was set as the final date for paying off the estimated ‘unfunded
outstanding liability’ associated with residual claims
• the final amount to be funded by the residual levy portion as at 30 June 2009
was calculated and has been ‘locked in’ (it is not recalculated each year as was
done previously).
The average residual levy for 2015/16 will remain at $0.31 per $100 of liable earnings,
as this is the rate required to collect the remaining residual amount by 2019.
The table below shows the levy rates for pre-1999 claims to be charged in 2015/16
compared to this year’s rate. The levy rates shown are the dollar amounts employers and
self-employed people pay for each $100 of wages or earnings. All rates shown exclude
GST.
Classification unit (CU) number and description

Rate for 2014/15
Rate for 2015/16
77110
Residential property operators and developers
(excluding construction)
$0.28
$0.28
77120
Non-residential property operators and
developers (excluding construction)
$0.28
$0.28
How can I work out my ACC levies for 2015/16?
If you would like to work out how much your ACC levies for 2015/16 are likely to be, go to
www.acc.co.nz/Calculator and use our online levy calculators.

What is experience rating?
Experience rating is a system for modifying the current portion of a business’s Work levy
based on its claims history. Experience rating means employers that have better-thanaverage injury and return-to-work rates will receive a discount on the current portion of
their Work levy, while those with worse-than-average claims experience will receive a
loading on the current portion of their Work levy. For more information on experience
rating, how it works, and how it might apply to you please visit: www.acc.co.nz/er.
Some businesses and self-employed people are exempt and their levies will continue to
be calculated as usual.
The Experience Rating Programme applies to businesses and business groups whose
current portion of the work levy is greater than or equal to $10,000. A discount of up to
50% and a loading of up to 75% may be applied to their Work levy (current portion) as a
result of their claims history.
The No-Claims Discount Programme applies to businesses and self-employed people
(including non-PAYE shareholder employees and self-employed people) that pay an
annual Work levy of less than $10,000 (current portion). Under this programme a
discount or loading of 10% may be applied to their Work levy as a result of their claims
history.
8
Levy risk groups

What is the claims trend in this levy risk group?
The table below shows how claim numbers and costs have changed for Levy Risk Group
673 (Property development and operation) over the past four years. Note that:
•
The number of claims includes entitlement claims (claims that had entitlements
paid such as weekly compensation or social rehabilitation costs) and includes an
allowance for unallocated claims (claims reported but not assigned to a valid CU).
•
The total cost of claims includes all entitlement and non-entitlement costs, as well
as an allowance for incurred (but not reported) claims and reopened claims.
•
Claim costs for all years have been inflated to values consistent with projected
costs for claims occurring during the 2015/16 accident year. This means that
changes seen from year to year are not impacted by normal cost inflation and are
reflective of real changes in experience for the industry/levy risk group.
For levy setting purposes, where standard employers and self-employed people
represent a small proportion of the total workforce in a levy risk group, we include the
earnings and claim cost data from employers who are participants in the Accredited
Employer Programme (AEP).
2010/2011
2011/2012
2012/2013
2013/2014
Number of entitlement claims
100
121
115
96
Self-Employed and
Number of entitlement claims
Standard Employers
per $ million earnings
(ie not in the AEP)
0.13
0.14
0.14
0.12
$3.36 m
$3.20 m
$2.79 m
$3.59 m
Number of entitlement claims
1
7
5
0
Number of entitlement claims
per $ million earnings
0.02
0.14
0.11
N/A
$0.01 m
$0.11 m
$0.09 m
$0.00 m
Total cost of all claims
Employers in the AEP
Total cost of all claims
Note: The Accredited Employer Programme (AEP) is a self-management option for
organisations with their own injury management and rehabilitation capability and
sufficient financial resources to handle work injuries to their own employees.
(For more information about the Accredited Employer Programme (AEP) see the
Glossary of ACC terms at the end of this document.)
9

How are levy risk groups structured?
Levy risk groups for the ‘current portion’ of the work levy combine the nature of
businesses or trades into larger groups to accurately estimate the cost and frequency of
future injury claims.
There are 41 levy risk groups for the pre-1999 claims (the residual portion of the work
levy). The relativities for the residual levies were ‘frozen’ to ensure that those industries
that created this previous liability will fund the liability out to 2019.
For 2015/16 we will be:

•
maintaining the number of levy risk groups for the ‘current portion’ at 143
•
maintaining the number of levy risk groups for the ‘residual portion’ at 41.
What is the earnings trend in this levy risk group?
The table below shows how the total earnings for Levy Risk Group 673 (Property
development and operation) have changed over the past four years. Earnings have been
inflated to values consistent with expected earnings paid for the 2015/16 year, which is
more reflective of real changes in the industry.
Number of Self-Employed and
Self-Employed and Employers
Standard Employers
(ie not in the AEP)
Earnings
Number of Employers
2010/2011
2011/2012
2012/2013
2013/2014
16,669
20,134
19,503
16,071
$782.56 m
$837.56 m
$801.32 m
$790.04 m
4
4
4
3
$45.35 m
$51.63 m
$45.71 m
$17.40 m
Employers in the AEP
Earnings

How does ACC set levy rates?
The 2015/16 levy rates in this document are based on a forecast of what will happen in
the future. We look at trends from past years and make a judgement about whether those
trends are likely to continue in the future for claims in the Work Account.
To allocate the average 2015/16 Work levy rate between levy risk groups, a weighted
average of the past seven years of claim costs and earnings is used.
These weighted average claim costs and earnings are then converted to a cost per $100
of earnings for your levy risk group (called the claims to earnings ratio). These are
credibility-adjusted if there is insufficient information in your levy risk group. This
translates into a levy rate that will be needed to cover the expected cost of claims in
2015/16.
10

What does this mean for setting the levy rate?
The graph below shows the trend in the ratio of claims to earnings for employers and selfemployed people in this levy risk group, and the weighted average used to set the
2015/16 levy rate.
Claims Costs per $100 of earnings for
Employers and Self-Employed
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016
Actual
2015/2016 forecast
We then add allowances for operating and injury prevention expenses plus adjustments
for the over or under funding of claims in the period from 1 July 1999 to 31 March 2015.
11
Workplace injury prevention

What can I do to reduce rates?
Everyone can contribute to lowering levy rates. Lower injury rates are the key to reducing
your levy rate. ACC can reward you for safe workplace practices by discounting your
levies. Programmes have been designed to meet the needs of differing business types.
So if you want to pay a lower rate, you can help reduce it by:
•
keeping yourself safe
•
keeping your workers safe
•
assisting injured people back to work more quickly
•
learning from others in your levy risk group to find ways to reduce levies in the
group overall
•
establishing and maintaining effective workplace health and safety systems and
practices as appropriate to the scale of your business activity and the level of risk
evident
•
maintaining proactive and regular contact with ACC.
Find out more about injury prevention by going online to: www.acc.co.nz/preventinginjuries

Workplace safety incentive programmes and injury management
resources
ACC offers incentive programmes that reduce the levies you pay if your business can
demonstrate acceptable workplace safety practices. We also have resources to assist
employers to help get injured staff back to work sooner. For more information about these
programmes and resources go to:
Employers
www.acc.co.nz/for-business/small-medium-and-large-business/how-to-pay-less
www.acc.co.nz/for-business/small-medium-and-large-business/managing-employeeinjuries
Self-employed
www.acc.co.nz/for-business/self-employed/how-to-pay-less
12
More information

Where can I get more information?
If you have any questions about the information in this document, you can talk to your
ACC Relationship Manager (if you have one) or contact us at:
•
business@acc.co.nz
•
Employers 0800 222 776
•
Self-employed 0508 426 837
•
Tax agents 0800 222 991
13
Glossary of ACC terms

Accredited Employer Programme (AEP)
A programme that allows an employer to act on behalf of ACC, managing workplace
injuries for their employees and providing entitlements (e.g. weekly compensation) under
the Accident Compensation (AC) Act 2001. These organisations pay medical treatment
and rehabilitation costs as well as entitlements. For more information go to:
www.acc.co.nz/for-business/small-medium-and-large-business/how-to-pay-less.

Business industry description code (BIC)
Description of the nature of business or trade. You must provide the business industry
description when registering for GST and when completing the IR3, IR4 or IR7. The
Inland Revenue Department will provide the business industry description to ACC and
we will convert the BIC to a CU.

Classification unit (CU)
Business activities are classified, or grouped, so that the cost of work injuries is
distributed fairly amongst those businesses with similar characteristics. The CU is the
business activity classification.

Current levy portion
Funds the lifetime cost of work-related injuries that occur between 1 April 2015 and 31
March 2016, plus any adjustment for over or under-funding of claims in the period from
1 July 1999 to 31 March 2015.

Experience rating
Experience rating is the method of modifying levy rates for large employers based on
an individual employer’s claim experience. The large employer’s levy is adjusted
depending on whether their experience rating is better or worse than the average of
the other employers in their industry group.

Levy
Term used to describe amounts charged to cover past, current and future costs of
claims for work-related, non-work-related and motor vehicle injuries. Previously
referred to as ‘premiums’.
14

Levy consultation
The period of public consultation when businesses, communities and individuals
throughout New Zealand are invited to provide a submission, i.e. feedback and ideas
on our levy recommendations and other plans for the coming year.

Levy risk groups (LRGs)
ACC combines business industry CUs into larger ‘levy risk groups’ to accurately
estimate the cost and frequency of future injury claims.

No-Claims Discount Programme
Applies to customers (including non-PAYE shareholder employees and self-employed
people) that pay an annual work levy (current portion) of less than $10,000. Under this
programme a discount or loading of 10% may be applied to their Work levy as a result
of their claims history.

Residual portion of the Work account levy
Funds the long-term claims of the Scheme and covers the cost of treating and
rehabilitating workers who were injured in the workplace before 1 July 1999 or
suffered non-work-related injuries prior to 1 July 1992.
15