Covid 19 coronavirus: ACC to delay $900m of levy invoices to ease cashflow burden

ACC Minister Iain Lees-Galloway. Photo / File

Accident Compensation Corp will put off sending out $900 million of invoices to firms and sole traders for three months to help tide them through the cashflow crunch caused by the Covid-19 crisis.

The state-owned workplace insurer said invoices for the 2021 financial year that are usually sent from July 1 will now go out in October. Other invoices issued throughout the year will also be on hold for three months.

ACC invoices the bulk of business customers from the start of July and most payments are received in the following three months. It estimates about 500,000 employers and sole traders are invoiced $900m in that period.

"We recognise the difficult situation many businesses are facing," head of business customer service delivery Phil Riley said in a statement.

"ACC has the ability, albeit in a limited way, to reduce the immediate impact of these problems by delaying the sending of employer levy invoices."

The move is the latest by government entities to help businesses facing zero income cope with the looming recession as the Covid-19 pandemic forces lockdowns at home and abroad. For instance, the Inland Revenue Department will write off penalties and interest for firms unable to pay taxes on time because of the outbreak.

The workplace insurer has already delayed invoicing on CoverPlus Extra accounts, and stopped proactive collections and recoveries. Staff has also been prepared to discuss Covid-19 issues, including the ability to offer payment holds.

ACC estimates the cost of delaying those invoices will be $7.5m in the 2021 financial year and $4m in following years through lost investment income.