ACC OSH Audit and Experience Rating System

As of April 2011 the ACC are changing the way they reward New Zealand businesses for having a working OSH system. The approach currently is to assess a business’s OSH system and then reward the company with a discount on their ACC levy, in the order of 10, 15 or 20%. However, what the ACC were finding is that 2 businesses in the same industry may both be receiving the maximum 20% discount, but 1 business may have a low accident rate compared to the other. That is, the results are completely different, which really was the aim of providing a discount – to encourage better outcomes. In theory, an approved OSH system in place would lower the accident and injury rate, but there was little financial incentive (from the ACC) to do more than pass the ACC audit.

OSH and the Experience Rating

So the ACC are halving the discount programs (now a max of 10%) and adding in an experience rating. The idea is to encourage a business to have an OSH system in place (passing the audit), but to further reward or even penalise a business if they have poor results. The actual detail behind the scheme can be found in this link, but in a nutshell if you are a business currently paying <$10k in annual levies, you will be assessed for a non-claims bonus. Just like you are for any other insurance product. If you are a big business paying more than $10k in annual levies, you will be compared to other business in your industry group, and the levy will be reduced OR increased by as much as 50%.

What to do with your OSH system then?

Whatever size your business it is clear then there are direct rewards and incentives for having an OSH system in place. And as the ACC have telegraphed the levies will steadily increase over the decade, it’s important to get the OSH system reviewed, working and in place immediately.