The Government has approved big cuts to Accident Compensation Corporation levies for employees and their bosses next year which may save them more than half a billion dollars, ACC Minister Nick Smith has announced.

Dr Smith said the Government had approved for consultation a levy reductions of 17 per cent for employees and 22 per cent for employers for the year beginning April next year.

That would save households $340 million and employers $247 million he said.

\”These significant levy reductions are good news for families and businesses and are affordable because of the prudent management of ACC’s finances,\” said Dr Smith.

\”We have reversed ACC’s large deficits of $2.4 billion in 2007/2008 and $4.8 billion in 2008/2009 with surpluses of $2.5 billion in each year since.\”

The Earners’ Account levy which is paid by salary and wage earners will fall from $2.04 per $100 of taxable income to $1.70 saving a worker on $50,000 a year about $3.27 a week or $170 a year.

The average Work Account Levy which is paid by employers and the self employed will fall from $1.47 per $100 of income to $1.15.

A typical small business employing seven people on a salary of $50,000 each would save about $1120 less a year in ACC levies.

A self employed person earning $80,000 a year who pays both levies stands to save about $528 a year.

Dr Smith said ACC’s finances had turned around because of claim costs were not growing as fast and rehabilitation rates had improved.

By Adam Bennett

Reference: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10737796