Accident Compensation (Earners’ Levy) Regulations 2019

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2019/36

Coat of Arms of New Zealand

Accident Compensation (Earners’ Levy) Regulations 2019

Patsy Reddy, Governor-General

Order in Council

At Wellington this 25th day of February 2019

Present:
Her Excellency the Governor-General 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—

(i)

after having regard to the principles of financial responsibility in section 166A of that Act; and

(ii)

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 2019.

2 Commencement

These regulations come into force on 1 April 2019.

3 Interpretation

(1)

In these regulations, unless the context otherwise requires,—

applicable tax year means, as the case may be,—

(a)

the 2019/20 tax year; or

(b)

the 2020/21 tax year; or

(c)

any later tax year

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

(2)

Any term or expression that is defined in the Act and used, but not defined, in these regulations (for example, earner, earnings, employee, self-employed person, tax year, and weekly compensation) has the same meaning as in the Act.

4 Earners’ levy

(1)

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

(a)

for all earners, except those described in paragraphs (b) and (c), $1.21 per $100 of earnings (which means, for self-employed persons, earnings derived or treated as being derived, and for other earners, earnings paid or treated as paid) in 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).

(2)

Subclause (1) is subject to regulation 5.

5 Maximum earnings on which earners’ levy payable

(1)

The maximum amount of earnings, for the purposes of calculating the earners’ levy for the 2019/20 tax year on which an earner must pay an earners’ levy, is $128,470.

(2)

The maximum amount of earnings, for the purposes of calculating the earners’ levy for the 2020/21 tax year, or for any later tax year, on which an earner must pay an earners’ levy, is $130,911.

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 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 $36,816.

(2)

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

1.21 × [($36,816 − a) ÷ 100]

where a is the amount of the person’s earnings as an employee in 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 2017 continue to apply to the period starting on 1 April 2017 and ending on the close of 31 March 2019 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 2019, prescribe the earners’ levy payable by people who engage in employment (whether or not as an employee) for the period comprising—

  • the tax year starting on 1 April 2019 and ending on the close of 31 March 2020; and

  • the tax year starting on 1 April 2020 and ending on the close of 31 March 2021; and

  • any tax year starting on or after 1 April 2021.

Under the Accident Compensation (Earners’ Levy) Regulations 2017, the earners’ levy for self-employed people was calculated using earnings derived in the previous tax year (see regulation 6(2), (4), and (5) of those regulations). However, these regulations change that, and provide that the earner’s levy for self-employed people is calculated using earnings in the applicable tax year (see regulation 6), as is done for all other earners (see regulation 4).

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 applicable 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; and

  • the amount of levies exempt from payment for the purposes of section 244 of the Act.

The regulations revoke and replace the Accident Compensation (Earners’ Levy) Regulations 2017.

Regulatory impact assessments

The Ministry of Business, Innovation, and Employment produced regulatory impact assessments on 29 November 2018 to help inform the decisions taken by the Government relating to the contents of this instrument.

Copies of these regulatory impact assessments can be found at—

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 28 February 2019.

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