Self-employed A.C.C. levy to rise

Press, 4 October 1979, Page 3

Self-employed A.C.C. levy to rise

PA Wellington Accident compensation levies payable by self-employed will rise from March next year, the Minister of Labour (Mr Bolger) said yesterday. The levy will rise from $1 to $1.07 a $lOO of leviable earnings.

The increase, the first since accident compensation was introduced five years ago, means self-employed people will pay the same levy as the average paid by employers throughout industry. This rose from an average of $1 to $1.07 for every $lOO of earnings from April 1 this year.

Mr Bolger said levies paid by the self-employed were accounted for in a separate account from those paid by employers. The self-employed account was insufficient to meet the future estimated coSts of compensation, he said. The commission belived $l5 million should be held in reserve to meet payments, but only $3 million was available, he said. The main reason for the rise was the “unexpectedly

high” cost of compensation for leisure-time accidents which had also caused the over-all increase in levies on employers. This was one of the topics being considered by the Accident Compensation Review Committee.

Out of each $1 of levy paid by self-employed people, 42c was spent on non-work accidents. But the short-fall in reserves for the self-employed was proportionately greater than that for the earners’ fund as a whole.

‘‘When accident compensation was introduced in 1974, no scheme existed (other than personal accident insurance) to cover accidents to the self-employed: nor was there any cover for accidents happening away from work,” Mr Bolger said.

“Only the commission’s work experience could determine the true cost of these accidents. The Woodhouse report had originally estimated a likely cost of $1 per $lOO of taxable income. While not far out, experience had shown that this figure needs some upward adjustment if current benefits are to be maintained.”