Accident Compensation (Earners' Levy) Regulations 2016

2016/28

Coat of Arms of New Zealand

Accident Compensation (Earners’ Levy) Regulations 2016

Jerry Mateparae, Governor-General

Order in Council

At Wellington this 22nd day of February 2016

Present:
The Right Hon John Key presiding in Council

These regulations are made under sections 218, 219, 244, and 329 of the Accident Compensation Act 2001—

(a)

on the advice and with the consent of the Executive Council; and

(b)

on the recommendation of the Minister for ACC made after complying with the consultation requirements of sections 330 and 331 of that Act.

Regulations

1 Title

These regulations are the Accident Compensation (Earners’ Levy) Regulations 2016.

2 Commencement

These regulations come into force on 1 April 2016.

3 Interpretation

In these regulations, unless the context otherwise requires,—

applicable tax year means the 2016–17 tax year or, as the case may be, a later tax year

Corporation means the Accident Compensation Corporation

earners’ levy means the levy payable to fund the Earners’ Account under section 219(1) of the Act

tax year has the same meaning as in section YA 1 of the Income Tax Act 2007 for the purposes of furnishing a return of income under the Tax Administration Act 1994.

4 Earners’ levy

(1)

The amount of earners’ levy payable for an applicable tax year is,—

(a)

for self-employed persons, except those described in paragraphs (b) and (c), $1.21 per $100 of earnings derived, or treated as being derived, in the tax year that immediately precedes the applicable tax year:

(b)

for self-employed persons to whom regulation 6 applies (but regulation 7 does not apply), the amount calculated in accordance with regulation 6(2):

(c)

for self-employed persons to whom regulation 7 applies, the amount calculated in accordance with regulation 7(2):

(d)

for other earners, $1.21 per $100 of earnings for pay periods ending in the applicable tax year.

(2)

Subclause (1) is subject to regulation 5.

5 Maximum earnings on which earners’ levy payable

(1)

The maximum amount of earnings in a tax year on which a self-employed person must pay an earners’ levy is $120,070.

(2)

The maximum amount of earnings in a tax year on which any other earner must pay an earners’ levy is $122,063.

6 Self-employed person who works more than 30 hours per week and earns less than specified amount

(1)

This regulation applies to a self-employed person who, in the tax year that immediately precedes the applicable tax year,—

(a)

worked for an average of more than 30 hours per week, whether or not as an employee; and

(b)

earned less than $30,680.

(2)

The person must pay the earners’ levy calculated using the following formula:

1.21 × [($30,680 − earnings as an employee) ÷ 100]

(3)

In the formula in subclause (2), earnings as an employee is the amount of the person’s earnings as an employee in the tax year that immediately precedes the applicable tax year.

7 Self-employed person who purchases weekly compensation

(1)

This regulation applies to a self-employed person who enters into an agreement with the Corporation under section 209 of the Act to purchase weekly compensation.

(2)

The person must pay the earners’ levy calculated using the following formula:

1.21 × [(1.25 × a) ÷ 100]

where a is the agreed level of weekly compensation purchased by the self-employed person under section 209 of the Act adjusted to an annual figure.

8 Levies exclusive of GST

The amounts of earners’ levies in these regulations are exclusive of any goods and services tax payable on the levy.

9 Amount of levies exempt from payment

(1)

This regulation applies to any invoice that—

(a)

is issued to a self-employed person for the purposes of the Act; and

(b)

includes the earners’ levy.

(2)

The relevant exempt amount for the purposes of section 244 of the Act is $40.

10 Revocation and saving

(2)

Despite subclause (1), the Accident Compensation (Earners’ Levy) Regulations 2015 continue to apply to the period starting on 1 April 2015 and ending with the close of 31 March 2016 as if they had not been revoked.

Michael Webster,
Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 1 April 2016, prescribe the earners’ levy payable by people who engage in employment (whether self-employed or not).

For self-employed people, the earners’ levy is calculated using earnings derived in the previous tax year. For all other earners, the levy is calculated using earnings in the applicable tax year.

The regulations also prescribe—

  • maximum liable earnings for all earners; and

  • a specified amount on which the earners’ levy is payable by self-employed people who, in the previous tax year, worked full-time (ie, more than 30 hours a week) but earned less than the specified amount; and

  • the rate for the earners’ levy payable by self-employed people who have an agreement with ACC to purchase weekly compensation.

The regulations revoke and replace the Accident Compensation (Earners’ Levy) Regulations 2015.

Regulatory impact statement

The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 25 November 2015 to help inform the decisions taken by the Government relating to the contents of this instrument.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 25 February 2016.

These regulations are administered by the Ministry of Business, Innovation, and Employment.