12 Oct 2009

ACC funding deadline to be deferred

8:08 am on 12 October 2009

A deadline for accident compensation to be fully funded by ACC by 2014 is being put on hold.

Cabinet will on Monday discuss a change to the law, to extend the date by which ACC must become fully funded.

The deadline is to be extended by five years to 2019.

ACC Minister Nick Smith says the Government has been unnerved by the scale of increases in levies being considered by the board of the corporation.

Dr Smith says delaying the date is to relieve some of the financial pressure on the corporation and help keep levy increases down.

Proposed levies for next year will also be discussed on Monday by the cabinet. Details are to be issued for public consultation on Wednesday. They will take effect next April.

ACC chair John Judge says levy increases will be substantially more than 10%.

$12.8 billion shortfall

On Friday, ACC issued figures showing claim liabilities - that's the future cost of existing claims - have grown to $23.8 billion.

It has net assets of $11-billion - leaving a shortfall of $12.8 billion.

ACC will make its final recommendation to the Government on next year's levies later this year.