What is ACC?
The Accident Compensation Corporation (ACC) is New Zealand's universal no-fault accident insurance scheme. It provides comprehensive cover for personal injury resulting from accidents, regardless of who was at fault. In exchange, New Zealanders largely cannot sue for personal injury — the scheme replaces common law claims with a statutory entitlement system.
Key Principles
No-Fault Cover
Anyone injured in an accident in New Zealand — citizens, residents, visitors — is covered. You do not need to prove someone else was at fault to receive compensation and treatment.
Comprehensive Entitlements
Cover includes: treatment costs (GP visits, surgery, physiotherapy), weekly compensation if you cannot work, lump sums for permanent impairment, rehabilitation support, and home help.
Social Contract
In return for universal no-fault cover, New Zealanders give up the right to sue for personal injury (with limited exceptions for exemplary damages). ACC levies fund the scheme — paid by wage earners, employers, and vehicle owners.
Who Pays for ACC?
ACC is funded through levies:
- Earners' levy: Deducted from wages and salaries — 1.67% of liable earnings in 2025/26 (capped at $152,790), rising to 1.75% in 2026/27 (capped at $156,641).
- Employers' levy: Paid by businesses based on their payroll and industry risk classification.
- Motor vehicle levy: Included in vehicle licensing (registration) and petrol tax.
- Self-employed levy: Self-employed people pay a combined levy covering both earner and employer components.
What ACC Covers
ACC covers personal injury caused by:
- An accident (any sudden event)
- Work-related gradual process, disease, or infection
- Treatment injury (complications from medical treatment)
- Sexual assault or abuse (sensitive claims)
- Certain occupational diseases (e.g., asbestos-related conditions)
ACC does NOT cover: gradual age-related conditions, illness or disease unrelated to work or accident, congenital defects, or injuries from self-harm (with some exceptions).
Key Legislation
The scheme is governed by the Accident Compensation Act 2001, which sets out the legal framework for cover, entitlements, and the dispute resolution process.
Current Levy Rates (2025/26 and 2026/27)
ACC is funded through four levy streams, and the rates are set three years at a time by the government. For the 2025/26 year the earners' levy is 1.67% of liable earnings (capped at $152,790, so the maximum is $2,551.59); the average work levy paid by employers is $0.66 per $100 of payroll (varying by industry risk, from around 0.16% for low-risk office work to over 3% for high-risk industries like forestry); and the average motor vehicle levy is $122.84 per vehicle. For 2026/27 these rise to 1.75% (cap $156,641, maximum $2,741.22), $0.69 per $100, and $131.94 respectively. Self-employed people pay a combined earner-plus-work levy on their liable earnings. The levies are reviewed every three years to keep the scheme fully funded while smoothing rate shocks.
The Scheme in 2026: What's Changing
ACC entered 2026 with significant administrative reform. The Turnaround Plan, launched in January 2026 after an independent review of ACC's claims management, focuses on three priorities: putting clients first with care that leads to lasting recovery, getting New Zealanders back to work and independence, and returning the organisation to its core functions. For claimants the practical effect is a renewed focus on timely decisions and rehabilitation outcomes. Separately, from 1 July 2026 the maximum weekly compensation rises by 1.97% to $2,466.20 gross per week (indexed to the Labour Cost Index), and the interest ACC pays on overdue weekly compensation falls from 5.78% to 4.413% per annum. None of this changes your cover — but it is worth knowing the scheme is actively being rebuilt around faster, fairer claims handling.
What ACC Does NOT Cover
Understanding the boundaries of ACC cover is as important as understanding its benefits. ACC covers personal injury caused by accident — but it does not cover: gradual age-related conditions (arthritis, wear and tear, most back degeneration), illness or disease unrelated to work (heart attacks and strokes are only covered in narrow work-related or treatment-injury situations), congenital defects, injuries from self-harm (with limited exceptions for mental-injury claims), and most mental injuries (except those from sexual abuse, certain work events, or as a direct physical consequence of a physical injury). Treatment injuries — harm caused by medical treatment itself, including delayed diagnosis in some cases — are covered even though they are not "accidents" in the everyday sense. If you are unsure whether your condition is covered, lodge a claim anyway: ACC makes the formal decision, and a decline comes with review rights and 3 months to exercise them.
ACC Levies for 2026/27: The Exact Rates
ACC is funded by four separate levies, and the rates change on 1 April each year. The 2026/27 year (1 April 2026 to 31 March 2027) carries the following rates, all set by regulation after a three-yearly funding review:
- Earners' levy — $1.75 per $100 of earnings (1.75%), GST-inclusive. It applies to your first $156,641 of liable earnings, so the most anyone pays is $2,741.22 a year — about $52.72 a week.
- Work levy — average $0.69 per $100 of payroll. Employers and self-employed people pay this; your exact rate depends on your industry classification (see the Work Account page).
- Motor vehicle levy — average $131.94 per vehicle, collected with vehicle registration (rego) and through petrol.
- Working Safer levy — $0.08 per $100 of earnings, paid by employers and the self-employed to fund WorkSafe New Zealand.
| Levy | 2025/26 | 2026/27 (current) | 2027/28 (forecast) |
|---|---|---|---|
| Earners' levy | $1.67 per $100 | $1.75 per $100 | $1.83 per $100 |
| Max liable earnings | $152,790 | $156,641 | $160,244 |
| Max annual earners' levy | $2,551.59 | $2,741.22 | $2,932.47 |
| Average work levy | $0.66 per $100 | $0.69 per $100 | $0.72 per $100 |
| Average motor vehicle levy | $122.84 | $131.94 | $141.69 |
The underlying regulations express the earners' levy GST-exclusive (the 2026/27 figure is $1.52 per $100), but the $1.75 rate is what is actually deducted and what IRD publishes.
What You Actually Pay: Two Worked Examples
Because the levy is a flat percentage up to a hard cap, the cost rises with income and then stops. On a $70,000 salary: $70,000 ÷ 100 × $1.75 = $1,225 a year, or about $23.56 a week — invisible inside your PAYE deduction. On a $185,000 salary you still pay only $2,741.22, because earnings above $156,641 are not liable. That cap is why high earners pay a shrinking effective rate: the levy is 1.75% at $90,000, 1.38% at $185,000, and less the higher you go.
The Accounts Behind the Scheme
ACC is not one pool of money — it is several ring-fenced accounts, and which one pays your claim determines who funded it:
- Earners' Account — non-work injuries to people earning income (the levy on your wages funds this).
- Work Account — injuries that happen at work or because of work, funded by employers and the self-employed.
- Motor Vehicle Account — injuries from driving, riding, and being a passenger or pedestrian hit by a vehicle, funded by the rego levy and fuel.
- Treatment Injury Account — injuries caused by medical treatment rather than by accident, funded from the other accounts.