Information about 2009/10 ACC levy rates for Levy Risk Group 465 Store and Non-store retailing

Transcription

1 Information about 2009/10 ACC levy rates for Levy Risk Group 465 Store and Non-store retailing Antique and used goods retailing Floor covering retailing Furniture retailing Garden supplies retailing Hardware and building supplies retailing Houseware retailing Non-store retailing Personal accessories retailing (not elsewhere classified) Retail commission-based buying and/or selling Store-based retailing (not elsewhere classified)

2 Introduction This document contains information specifically for the levy risk group 465 (Store and Non-store retailing), including the levy rates for 2009/10, the number of injuries and the costs of claims (which is a key driver of your rates) for your industry. Having your say This document will help you understand more about what you pay to help fund the Scheme and how we work that out. If you have any questions about the information in this document, you can talk to your ACC account manager (if you have one) or contact us at: business@acc.co.nz freephone for employers freephone for self-employed freephone for agents Accident Compensation Corporation 1

3 Levy rates for 2009/10 Your annual levies provide no fault cover for injuries arising from accidents. In this document you will find the 2009/10 ACC levy rates for employers and self-employed people in the following groups: Antique and used goods retailing Floor covering retailing Furniture retailing Garden supplies retailing Hardware and building supplies retailing Houseware retailing Non-store retailing Personal accessories retailing (not elsewhere classified) Retail commission-based buying and/or selling Store-based retailing (not elsewhere classified) The rates quoted are per $100 of wages or earnings: if you re an employer, the levy rate is charged on your payroll for the 2009/10 tax year, subject to a maximum for any one employee if you re self-employed, the levy rate is charged on your earnings from self-employment (excluding earnings from things like investments) for the 2008/09 tax year, subject to a maximum. Merging of Employers and Self-Employed Accounts into Work Account From 1 April 2007 the Employers and Self-Employed Work Accounts were combined into one Work Account. The intention of this is that employers and self-employed people in the same industry group will pay the same work levy rate. The work levy rates for employers and self-employed people are being moved together over a period of three years. Until that time, the work levy rates for employers and self-employed people in the same industry group may be different. At the time of merging, the Employers and Self-Employed Work Accounts had different funding positions. The 2008/09 work levy rates charged to employers included a rebate to compensate for the funding imbalance of the two Accounts. The 2008/09 Work levy rates for self-employed people had a corresponding loading to ensure the Work Account received the required levy amount. In 2009/10, the loading/rebate has been removed and the only difference between the work levy rates for employers and self-employed people for a particular classification unit is the legislative requirement to cap any increase or decrease at 25% of the 2008/09 levy rate. Accident Compensation Corporation 2

4 Employers ACC levies for employers are based on the wages of their employees (ie payroll) for the levy year. Employer levies are made up of two parts: Levy for 2009/10 work claims - funds the lifetime cost of work injuries that occur between 1 April 2009 and 31 March 2010, plus any adjustment for over- or under-funding of claims in the period from 1 July 1999 to 30 June Levy for pre-1999 claims funds the ongoing costs of claims that occurred prior to 1 July 1999, when the ACC Scheme changed to a full funding basis (this levy will cease after 2014 see page 7 for further information). The table below shows the 2009/10 work claims levy rates for employers compared to last year s rates. The levy rates shown are the dollar amounts you would pay for each $100 of wages. All rates shown exclude GST. Work levy rates for Employers Classification unit Rate for 2009/10 Rate for 2008/09 Description Number Base rate for 2009/10 Rebate Capping impact (Note A) Rate for 2009/10 Base rate for 2008/09 Rebate Capping impact (Note A) Rate for 2008/09 Furniture retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Floor covering retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Hardware and building supplies retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Houseware retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Antique and used goods retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Garden supplies retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Personal accessories retailing (not elsewhere classified) $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Store-based retailing (not elsewhere classified) $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 $0.02 $0.59 Non-store retailing $0.69 $0.00 -$0.01 $0.68 $0.63 -$0.06 -$0.01 $0.56 Retail commissionbased buying and/or selling $0.69 $0.00 -$0.09 $0.60 $0.63 -$0.06 -$0.09 $0.48 Accident Compensation Corporation 3

5 Note A Where classification rate changes have not been limited by the +/-25% cap, the impact on the rate will be to cover the net funding shortfall or surplus caused by capping levy rate changes. Accident Compensation Corporation 4

6 Self-employed people ACC levies for self-employed people are based on their earnings from self-employment in the previous tax year. Your self-employed levies have three parts: Levy for 2009/10 work claims - funds the lifetime cost of work injuries that occur between 1 April 2009 and 31 March 2010 plus any adjustment for over- or under- funding of claims from 1 July 1999 to 30 June Earner levy for non-work claims - funds the lifetime cost of non-work injuries that occur between 1 April 2009 and 31 March 2010 plus any adjustment for over- or under- funding of claims from 1 July 1999 to 30 June This is known as the Earner levy. Levy for pre-1999 claims funds the ongoing costs of claims that occurred prior to 1 July 1999, when the ACC Scheme changed to a full funding basis (this levy will cease after 2014 see page 7 for further information). The table below shows how the 2009/10 work claims levy rates for self-employed people compares to last year s rate. The levy rates shown are the dollar amounts payable for each $100 of earnings from self-employment. All rates shown exclude GST. Work levy rates for Self-employed Classification unit Rate for 2009/10 Rate for 2008/09 Description Number Base rate for 2009/10 Loading Capping impact (Note B) Rate for 2009/10 Base rate for 2008/09 Loading Capping impact (Note B) Rate for 2008/09 Furniture retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Floor covering retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Hardware and building supplies retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Houseware retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Antique and used goods retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Garden supplies retailing $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Personal accessories retailing (not elsewhere classified) $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Store-based retailing (not elsewhere classified) $0.69 $0.00 $0.15 $0.84 $0.63 $0.35 $0.13 $1.11 Non-store retailing $0.69 $0.00 $0.03 $0.72 $0.63 $0.35 -$0.02 $0.96 Accident Compensation Corporation 5

7 Retail commissionbased buying and/or selling $0.69 $0.00 $0.03 $0.72 $0.63 $0.35 -$0.02 $0.96 Note B Where classification rate changes have not been limited by the +/-25% cap, the impact on the rate will be to cover the net funding shortfall or surplus caused by capping levy rate changes. For self-employed people the levy for non-work claims (the Earner levy) is charged at a flat rate. For 2009/10 the rate is $1.511 (excluding GST) per $100 of earnings from self-employment. This is the same as that paid by employees, including shareholder-employees, albeit paid through PAYE tax deductions made by their employers. Accident Compensation Corporation 6

8 Levy for pre-1999 claims (Residual levies) ACC still needs to collect levies to pay for the on-going costs of claims that occurred before 1999, to cover the lifetime cost of these claims. Prior to 1999 ACC was required to operate under a pay-as-you-go funding regime, where levies had to cover only the claim costs expected to be paid in that year. From 1 July 1999 onwards, ACC was required to operate on a full funded basis, which meant that levies had to cover the lifetime costs of injuries that occurred in each year. At the time of this change however, there was no reserve of funds to pay for the on-going costs of pre-1999 claims. Parliament set up a separate Account (the Residual Claims Account) to ring fence these claims and employers and self-employed people were charged a separate levy to pay the on-going costs of these claims (employers and self-employed people pay the same rate). Each year, ACC sets the levy rate for pre-1999 claims so that by 30 June 2014 it is expected that sufficient funds will have been built up to meet all the future cost of claims that occurred before 1 July After 30 June 2014 the separate levy for pre-1999 claims will cease. In 2005 an amendment to the Injury Prevention, Rehabilitation, and Compensation Act 2001 changed the funding rules regarding which ACC Accounts fund the costs of gradual process claims. This resulted in a significant increase in the number of gradual process claims now being funded from the pre-1999 claims levy. The table below shows how the levy rate for pre-1999 claims to be charged in 2009/10 have changed compared to last 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 description and number Rate for 2009/10 Rate for 2008/09 Furniture retailing $0.57 $0.54 Floor covering retailing $0.57 $0.54 Hardware and building supplies retailing $0.57 $0.54 Houseware retailing $0.57 $0.54 Antique and used goods retailing $0.57 $0.54 Garden supplies retailing $0.57 $0.54 Personal accessories retailing (not elsewhere classified) $0.57 $0.54 Store-based retailing (not elsewhere classified) $0.57 $0.54 Non-store retailing $0.32 $0.31 Retail commission-based buying and/or selling $0.50 $0.48 Is there anything else I have to pay? Employers and self-employed people also pay a Health and Safety in Employment (HSE) levy. This levy pays for the operation of the occupational safety and health services of the Department of Labour. ACC collects this levy on behalf of the Department of Labour. The HSE levy is charged at a flat rate. For 2009/10 the rate is to remain at $0.05 (excluding GST) per $100 of Accident Compensation Corporation 7

9 wages or earnings from self-employment. What is the total value of my ACC levies for 2009/10? Do you want to work out how much your ACC levies for 2009/10 are likely to be? Use the worksheets overleaf. Accident Compensation Corporation 8

10 Employer levy calculation worksheet Wages calculation Estimate your employees wages for the year 1 April 2009 to 31 March 2010, divide by 100 and write the result in Box A A Work cover levies calculation Refer to the Work Account levy rates for employers for 2009/10 on page 3. Look up the relevant work levy rate for your industry, multiply by Box A, and write the result in Box B B Other levies Pre-1999 claims levy Look up the relevant pre-1999 claims levy rate for your industry on page Error! Bookmark not defined., multiply by Box A, and write the result in Box C Health & Safety in Employment levy Multiply Box A by 0.05, and write the result in Box D C D Total ACC levies Add boxes B, C and D, and write the result in Box E E Notes: 1. These levies exclude GST. 2. Non-PAYE shareholder-employees will also need to pay non-work Earner levy. 3. If you use more than one industry description (Classification Unit), complete a separate worksheet for each using the appropriate wage amounts and levy rates. Accident Compensation Corporation 9

11 Self-employed levy calculation worksheet Earnings calculation Estimate your taxable earnings for the year 1 April 2008 to 31 March 2009, and write the result in Box A A Is Box A over $102,922? Yes write $ in Box B No divide Box A by 100, and write the result in Box B B Work cover levies calculation Refer to the Work Account levy rates for self-employed people for 2009/10 on page 5. Look up the relevant work levy rate for your industry on page 5, multiply by Box B, and write the result in Box C C Non-work cover levy Multiply Box B by 1.511, and write the result in Box D D Other levies Pre-1999 claims levy Look up the relevant pre-1999 claim levy rate for your industry on page 7, multiply by Box B, and write the result in Box E Health & Safety in Employment levy Multiply Box B by 0.05, and write the result in Box F E F Total ACC levies Add boxes C, D, E, and F, and write the result in Box G G Notes: 1. These levies exclude GST. 2. Your levies may be different if you: have earnings from self-employment and wages as an employee had no earnings as a self-employed person between 1 April 2008 and 31 March 2009 had earnings from full-time self-employment that were less than $23,400. Accident Compensation Corporation 10

12 What your levy covers The biggest part of your levy goes to covering the cost of claims. The rest of the levy covers ACC operating and injury prevention expenses. So how do we estimate the cost of claims? We forecast the likely medical treatment, compensation and rehabilitation costs based on trends from the past, and make an allowance for expected investment returns. The cost of claims is the lifetime cost of claims for injuries that happen in the levy year. We need to revise our forecasts each year because: the actual cost of claims almost always changes from year to year for example, because clients are receiving weekly compensation for longer we may have received a lower or higher than expected return on investments for example, due to interest rate changes. Why do rates change? Each year, we have to work out how much money we will need to cover the lifetime costs of injuries that will occur in the coming year. Some changes to levy rates are usually required to cover any increases or decreases in these expected costs. We have to set new levy rates every year because of changes in: the number of employers and self-employed people in each levy risk group* (including any classification units moving into or out of the group) the wages paid by employers and earnings of self-employed people in each levy risk group the expected number of claims the expected cost of claims, including treatment, rehabilitation and weekly compensation costs. *ACC groups businesses with similar business activities and similar risks into groups large enough to obtain statistically credible data for levy calculations and injury prevention initiatives. These are called levy risk groups, and there are 117 of them. Accident Compensation Corporation 11

13 The table below shows how claim numbers and costs have changed for levy risk group 465 (Store and Non-store retailing) over the past four years. The number of claims includes only entitlement claims (claims that had entitlements paid (e.g. weekly compensation or social rehabilitation costs) other than just medical treatment costs). These numbers include an allowance for unallocated claims (claims reported but not assigned to a valid classification unit). The total cost of claims includes entitlement and non-entitlement costs as well as an allowance for incurred but not reported claims and an allowance for reopened claims. Note: ACC s Partnership Programme is a self-management option for organisations with their own injury management and rehabilitation capability and sufficient financial resources to deal with work injuries to their own employees. These organisations pay medical treatment and rehabilitation costs as well as entitlements (e.g. weekly compensation) on ACC s behalf. When standard employers and self-employed people represent a small proportion of the total workforce in a levy risk group the earnings and claim cost data from Partnership Programme employers are included for levy setting purposes. 2007/ / / /2005 Self-Employed and Standard Employers (ie not in the Partnership Programme) Number of Claims Claims per $ million Wages Total Cost of Claims $5.31 m $6.71 m $5.37 m $4.94 m Employers in the Partnership Programme Number of Claims * * 8 16 Claims per $ million Wages * * Total Cost of Claims * * $0.09 m $0.10 m Note: * indicates that the figures cannot be provided for confidentiality reasons as there are two or less levy payers in one of the categories. The table below shows how the total earnings or wages for your levy risk group 465 (Store and Non-store retailing) has changed over the past four years. Self-Employed and Standard Employers (ie not in the Partnership Programme) Number of Self-Employed and Employers 2007/ / / / ,060 10,992 10,540 10,150 Wages $1, m $1, m $1, m $ m Employers in the Partnership Programme Number of Employers Wages * * $29.18 m $32.55 m Note: * indicates that the figures cannot be provided for confidentiality reasons as there are two or less levy payers in one of the categories. Accident Compensation Corporation 12

14 Setting a fair levy rate The 2009/10 levy rates shown in this document are based on a forecast about 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. To make this judgement we take into account: changes in the total wages and earnings of levy payers in your levy risk group changes in the number and cost of injuries in your levy risk group changes that are not unique to your levy risk group, such as treatment costs and investment returns. Firstly we convert claim costs into a cost per $100 of wages and 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. Then by plotting the claims to earnings ratio for each year on a graph, we make a judgement about the direction of the future trend and estimate the claims to earnings ratio for 2009/10. That estimate translates into a levy rate that will be needed to cover the expected cost of claims in 2009/10. We then add an allowance for operating and injury prevention expenses plus any adjustment for over- or underfunding of claims in the period from 1 July 1999 through 30 June The graph below shows the trend in the ratio of claims to wages and earnings for employers and self-employed people in this levy risk group. $0.70 Cost of claims per $100 of wages for Employers and Self-Employed $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $ / / / / / / /2010 Actual 2009/10 forecast Accident Compensation Corporation 13

15 What can I do to reduce rates? Everyone can contribute to lower levy rates. Lower injury rates are the key to reducing your levy rate. So if you want to pay a lower levy rate, you can help to reduce it by: keeping yourself safe keeping your workers safe learning from others in your levy risk group to find ways to reduce injuries in the group overall. Another way to help lower the costs of injuries is by assisting injured people back to work more quickly. ACC offers discount programmes that can reduce the levies you pay if your business can demonstrate acceptable workplace safety practices. For more information see: if you are an employer if you are self-employed. If you need some advice on how to make your work and workplace safer, please contact us at 0800 THINKSAFE ( ). How can I have my say? We consult every year on our levy rates for the next levy year. It s an important way of making sure levy payers and interested groups provide feedback on the way we run the ACC Scheme. The ACC Board considers all submissions before making a recommendation to Government, through the Minister for ACC. If you have any questions about the information in this document, you can talk to your ACC account manager (if you have one) or contact us at: business@acc.co.nz freephone for employers freephone for self-employed freephone for agents Accident Compensation Corporation 14