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Learn about the intricacies of weekly compensation, employer responsibilities, and client entitlement in the New Zealand payroll system. Explore different schemes, abatements, and reimbursements to optimize compensation processes.
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Presentation to New Zealand Payroll Practitioners Association 20th Sep 2013.
Our Team • I am Technical claims manager in the Weekly Compensation Team. • We deal with weekly compensation matters only. • We make the initial assessment of a client’s entitlement to weekly compensation. • We extend incapacity. • We assess abated weekly compensation i.e post incapacity earnings.
Our Team • We send ACC03 Earnings Certificates to employers to gather pre-incapacity earnings. • Some times we also send ACC038 post incapacity earnings. • ACC072 reimbursement forms in case of ERA claims. • ACC05 Previous employee earnings in case of employments not held at commencement of incapacity.
Different Schemes • There are three different schemes that cover an employee client. • Partnership Programme. • Only work accidents are covered under the partnership programme. • Employer is responsible for all weekly compensation payments for the specified period. • If the entitlement goes beyond the specified period then the claim is transferred to ACC.
Different Schemes • Employer Reimbursement Agreement. • The employer can choose which particular claim is covered under the agreement. • First week to be paid by employer if it is a work accident. • Employer continues to pay the employee during incapacity. • ACC reimburses the employer the full gross entitlement. • Abatement to apply if returned to partial work.
Different Schemes. • If employer is part of neither partnership programme nor ERA then Acc pays the client directly. • Employer liable to pay first week entitlement if it is a work injury. • Employer can pay a top up subject to maximum of 20% of pre-incapacity earnings. • ACC can’t reimburse employer directly any amounts.
First week payment. • ACC is not liable to pay first week. • First week starts from the Date of First Incapacity. • Each injury has only one Date of First Incapacity and one First Week. • Subsequent incapacities resulting from the same injury do not have First Week stand down. • Employers not required to pay First week on subsequent incapacity.
First Week Payment • The compensation payable is 80% of the amount of earnings as an employee lost by the employee, as a result of the incapacity, during the first week of incapacity. • For the purposes of this section, there is a presumption that the earnings the claimant loses as a result of the incapacity is the difference between— • (a) the claimant's earnings in the 7 days before his or her incapacity commenced; and • (b) the claimant's earnings in the first week of incapacity. • The presumption can be rebutted by proof to the contrary.
First Week Payment • The employer in whose employment the claimant suffered the work-related personal injury or the motor vehicle injury is liable to pay all the first week compensation to which the claimant is entitled. • An employer who fails to comply commits an offence.
Post Incapacity Earnings • Some clients return to light duties. • ACC has to reduce entitlement to ensure that clients are not earning more than their pre-incapacity average earnings. • No reduction in entitlement up to 20% of pre-incapacity average earnings. • Earnings more than 20% of pre-incapacity average results in equal reduction in the compensation that ACC can pay. Ensuring that the total post incapacity earnings are equal to pre-incapacity average earnings.
Post Incapacity Earnings • To determine correct abated entitlement due to client, ACC needs the earnings details. • Form ACC038 is sent to employers for completion. • All earnings information during the incapacity period needs to be provided on the form. • Amount paid for light duties performed, annual leave or sick leave paid if any, top-ups paid and any other taxable earnings like bonus, commission etc. • If you would like to top-up, please confirm with ACC the exact amount that can be paid as top-up as the 20% that ACC calculates may not be the same that you have calculated.
Reinstatement of leave • An employee on ACC need not avail annual or sick leave during the incapacity period. • Some clients have to use leave if ACC payments are delayed. • The leave amount paid has to be abated by ACC resulting in reduced entitlement. • Alternately the leave balance can be reinstated by employer after recovering amount from the employee. • ACC can’t reimburse the employer directly if you do not have ERA.
Payments during incapacity • Any amounts paid during incapacity, unless they are for work done during a specific period prior to incapacity ( within the same financial year ) are considered earnings and are abated resulting in reduced entitlement. • Payment of one off payments like bonus can be postponed until the end of incapacity if possible, so that the entitlement doesn’t get reduced. • Any one off payment or payment pertaining to previous financial years is considered as income for the week in which the amount is actually paid.
Completing ACC03 • The form can be completed on line or we can email you a PDF version. • Faxes are not encouraged. • While completing the form keep the situation as existed one day prior to Date of First Incapacity in view, specially the permanent / non-permanent question. • All amounts to be advised have to be gross before tax. • If in doubt call the ACC staff who sent the form for clarification.
