ACC and Wages

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semigeek

1606 posts

Uber Geek

#105499 5-Jul-2012 12:24

If anyone knows, can someone explain the whole ACC and wages thing. I know that ACC will pay 80% of your wage after two weeks, but what is the deal when you go back to work part time due to a non work related injury?

As I was told ACC would top up to the normal employers wage for an employee.

i.e if an employee normally made $2000 a fortnight, but was only bringing in $600 a fortnight due to restricted hours, ACC would then pay the other $1400.

Is that correct or not? Does anyone know?

nutbugs

269 posts

Ultimate Geek

Lifetime subscriber

#651218 5-Jul-2012 12:38

Looks like that is what they say on their website

http://www.acc.co.nz/PRD_EXT_CSMP/groups/external_claims_care/documents/publications_promotion/wpc086820.pdf

minimoke

750 posts

Ultimate Geek

#651257 5-Jul-2012 13:15

A few things:
You get 80% of your taxable weekly earnings - not just your wage from one employer. If you have a couple of jobs its 80% of the aggregate earnings from those jobs.

Earnings are the PAYE taxed ones. If you're getting paid under the table you’re out of luck.

ACC compo kicks in after one week.

ACC may deduct any earnings after you return to work from your weekly compo. Either way you still bring in around 80% of your earrings at the time of your injury.

You still get your holidays when you return to work. On your anniversary date you get another 4 weeks arguably at your full time rate of pay. I guess this means you are getting more than your 80% when you take yoru holidays so theoretically you may end up owing ACC if you are still on compo then.

ACC sees itself as the primary tax payer - they will tax your compo at your normal tax rates. If you return to work your employer essentially becomes a secondary employer and you get taxed at whatever the secondary income tax rate is - forget what it is now, something like 33%(?)

gzt

17104 posts

Uber Geek

Lifetime subscriber

#651517 5-Jul-2012 21:06

Secondary tax rates are fairly close to the main tax rates:

http://www.ird.govt.nz/how-to/taxrates-codes/earning-income-secondary-special-codes.html

bazzer

3438 posts

Uber Geek

Trusted

#651747 6-Jul-2012 10:53

The reason the secondary tax rate is higher is simply because it's taxing the second job at your marginal rate. So, if you expect to earn over $70k from all sources then you would expect to pay 33% on the earnings at the top end (i.e. your secondary job).

At the end of the year, your tax is only calculated on your total income, and takes no account of how many jobs you had so it's not as if you are penalised for having a secondary job (even if taxed initially at what seems like a higher rate).

Request a Personal Tax Summary at the end of the year and make sure you paid the right amount of tax, you'll probably get a refund but if it results in an underpayment then you'll have to pay it. To be on the safe, they have a calculator on the IRD website that lets you work out the correct amount of tax you should have paid. If it's a refund, request a PTS. If it's an amount to pay, and you don't need to request a PTS and you don't request a PTS you won't have to pay it, although you should. ;)

jtbthatsme

937 posts

Ultimate Geek

Trusted

#651766 6-Jul-2012 11:21

Also if your on a benefit whilst receiving the ACC then this is deducted (or should be) at a dollar for dollar deduction of the Net amount. So have a accident at work, go off work and end up on a benefit whilst waiting for ACC to kick in when it does chances are you will have been overpaid by W & I.

In some instances this may be corrected automatically by ACC reimbursing directly to W & I with you getting any excess (as in gett $500 ACC and $200 on a benefit they'll pay W & I $200 and you get the other $300). However often this is not the case so if you find yourself in that situation it's best to advise W & I at application time you've applied for ACC and of the amount you're expecting if you can.

Also some employers (eg Govt Dept's not sure if this is all) will pay the top up of your wages 80% ACC and the rest paid by your employer to 100%. This topup possibly comes off your leave entitlement. Never used it (thankfully) but that's what I've been led to believe by others who have.

Alternatively avoid getting injured and get your full pay.