What is self-employed for ACC purposes?
If you work as a sole trader, in a partnership, or have withholding or schedular payments deducted from your earnings instead of PAYE tax, you are considered a self-employed person for ACC purposes.
ACC provides injury cover as soon as you start self-employment. You automatically get ACC CoverPlus, but have the option of ACC CoverPlus Extra. Your levy is calculated from the information in your IR3 tax return. If you are injured you can claim for help with treatment costs, medical expenses and loss of earnings compensation.
What you need to do when newly self-employed
In your first year of self-employment you should note the following:
- Begin self-employment:
- You are automatically covered by ACC CoverPlus.
- Consider applying for ACC CoverPlus Extra. It gives you an agreed amount of lost earnings compensation. The compensation you get under ACC CoverPlus may be minimal if you are newly self-employed or self-employed part-time.
Not all self-employed part time people are eligible for ACC CoverPlus Extra. See the ACC CoverPlus Extra section for the criteria.
- Consider applying for ACC Workplace Safety Discount. You get training and support to improve safety, as well as a 10% discount on your levies.
- File your tax return (IR3) with Inland Revenue from March:
- Inland Revenue processes your IR3 tax return and sends your liable earnings details and business industry code to ACC.
- ACC calculates your levy for the first year or part year of self-employment, based on income and business description (from July).
- ACC also calculates the levy for the year ahead based on the same income and business description (from July).
This means you may have two invoices to pay the first time you are invoiced by ACC.
- Pay your ACC levy.
- ACC levy invoices are sent a few months after your first IR3 is submitted. Pay within two months to avoid overdue penalties.
Self-employment cover options
There are 2 cover options that apply to self-employed:
- ACC CoverPlus: Standard cover that automatically applies for self-employed
- ACC CoverPlus Extra: Similar to ACC CoverPlus but you can negotiate the level of lost earnings cover
Experience rating is a system of modifying a business’s ACC work levy based on its claims history, with a focus on encouraging improvements in workplace safety and making New Zealand businesses better places to work. Experience rating recognises and rewards business owners (including self-employed people) with good claims experience by lowering their ACC work levy – it may also mean a loading on the levy for those businesses with worse-than-average claims experience.
How can I find out what my levies will be?
ACC’s online calculators help you work out how much you next levy invoice might be. The calculators help work out your liable earnings or classification unit.
http://www.acc.co.nz/for-business/self-employed/what-do-i-pay/BUS00007#P45_3372 (kirk to use for link)
What does ACC cover me for?
You are covered for:
- fully paid ambulance services and emergency care, including urgent surgery, at a public hospital
- non-urgent surgery (you may need to pay some of the costs)
- subsidised GP/specialist and other medical treatment, eg physiotherapy
- support services, such as home help and childcare, to help you while you recover from your injury
- compensation for lost earnings if you are unable to work for a period of time
- assistance with returning to work
- a tax-free lump sum payment if you are permanently impaired with a serious injury
If the worst happens, we can also provide a funeral grant, survivor’s grant and lost earnings compensation for your family.
What if you get injured?
You are normally covered by us if you have a work-related injury or illness, or if you get injured outside of work. The amount of lost earnings compensation you are eligible for depends on your income and cover type. It is important to make an ACC claim as soon as possible so you can receive entitlements. For more information about making a claim and whether you are covered when you are overseas please see how do I make a claim?
Work-related injury and illness
Injuries at work or conditions caused by the job you do, or the environment you work in, should be treated as soon as possible. Your treatment provider will help you complete an ACC claim and send it to us. If you need time off as a result of the injury, your treatment provider will indicate this on the claim form. To work out your lost earnings compensation and a rehabilitation plan so you can get back to work, contact your nearest ACC branch or the ACC Inquiry Service Centre as soon as possible.
Cover for non-work injuries
Your levy payment covers you for injuries that happen outside of work, eg during sport or recreational activities, around the home, or on the road. Seek medical treatment as soon as possible to ensure you get the help you are eligible for from ACC. Your treatment provider will help you complete an ACC form and send it to us. If you need time off as a result of the injury, your treatment provider will indicate this on the claim form. To work out your lost earnings compensation and a rehabilitation plan so you can get back to work, contact your nearest ACC branch or the ACC Inquiry Service Centre as soon as possible.
Compensation for loss of earnings
If you are unable to work because of an injury, lost earnings payments can help to replace your income while you recover. The amount of lost earnings compensation we pay depends on your chosen cover option:
- ACC CoverPlus offers up to 80% of your taxable income for the most recent financial year (subject to minimums and maximums)
- ACC CoverPlus Extra offers 100% of the amount you have agreed in advance with ACC. This means you will know exactly what you will receive in the event of a claim, with no need to prove lost earnings and no reduction in the compensation you receive.
If you receive income from your business or from working, the amount of lost earnings compensation you receive may be reduced (unless you chose CoverPlus Extra standard).
No compensation for the first week
Lost earnings compensation is not paid to you for your first week off work after an injury. While employers cover an employee’s first week off as sick leave, you must cover your own first week.
Special conditions for some self-employed when making a claim
If you have not yet submitted a self-employed tax return, ACC cannot determine your income. Special conditions apply for:
- full-time newly self-employed
- part-time newly self-employed
- mixed income – self-employed and employee
Lost earnings compensation
If you are self-employed and need time off work to recover from an injury, lost earnings compensation can help with your loss of income. The type of cover you have and your income determines what your payments will be. We use your income from your last self-employed tax return to calculate your lost earnings compensation. If you have not yet submitted a tax return we may still be able to help.
How we calculate your lost earnings compensation
ACC can help with compensation for your loss of earnings while recovering. The amount of lost earnings compensation we pay depends on your individual circumstances. The amount you receive each week depends on:
- the type of cover you have with ACC
- the amount of income that you earn
No compensation for the first week
There is no lost earnings compensation for your first week off work. Employers are required to pay sick leave for the first week. As you are self-employed, you must cover your own sick leave for your first week off.
The type of cover you have determines how much you receive
After your first week, the amount of compensation you receive depends on the type of cover you have:
- ACC CoverPlus – you receive up to 80% of your earnings (based on your taxable income declared on your IR3 return for the most recently completed financial year).
- ACC CoverPlus Extra – you receive 100% of the cover you have agreed with ACC within the minimum and maximum cover levels.
When you have not yet submitted a self-employed tax return
If you have not yet submitted a self-employed tax return we cannot determine your income. Different conditions apply for:
- full-time newly self-employed
- part-time newly self-employed
1. Full-time newly self-employed
When you are newly self-employed and work full-time (over 30 hours per week) and have not lodged an IR3 tax return you may be entitled to $456.00 per week. This amount may be updated each year to keep up with the cost of living. For information on what the minimum and maximum amounts are see liable earnings for self-employed
2. Part-time newly self-employed
If you are newly self-employed and work part-time you may not be eligible for weekly compensation. You are considered part-time if you work less than 30 hours per week. In your first year under ACC CoverPlus you may not be able to claim for lost earnings compensation if you can’t prove your income. You can still get help with treatment costs, medical fees, and other support for your injury.
Mixed income: Self-employed and employee
If you were both an employee and self-employed in the previous year, your mixed income can be taken into consideration when determining any lost earning compensation. If you were an employee in the last 12 months, prior to your change to self-employment, we consider both income sources. ACC can take all earnings from the 52 weeks before your injury into account, including:
- employed work
- self-employed work
- lost earnings compensation
ACC CoverPlus Extra: Pre-approve your weekly compensation
You might find that ACC CoverPlus Extra is better for you as you can nominate how much lost earnings compensation you will receive if you are injured.
Invoicing for ACC.
If you’re self-employed and on CoverPlus you’ll get your invoice from August, soon after you file your tax return with Inland Revenue.
If you’re new to self-employment, we don’t invoice you until your second year of self-employment.
In your second year of full-time self-employment (i.e. more than 30 hours per week) you will receive two invoices, one for levies for the past year and one for the next year.
ACC’s levy calculators help you estimate what your levy invoices might be.
If you work part-time self-employed (ie less than 30 hours per week on average) then you will not receive an invoice for the first year of your self-employment. Contact us once you have filed your first IR3 with Inland Revenue so we can ensure you are sent a correct invoice.
How your CoverPlus levy invoice is made up
Your CoverPlus levy is for the current year and is made up of:
- Work Account levy – this is a levy for personal injury cover. It covers you should you be injured while at work. This levy may include any discounts or loadings that you get through the Experience Rating programme
- Earners’ Levy – this covers you for injuries outside of work (except motor vehicle injuries)
- Discounts – ACC Workplace Safety Discount or AC Workplace Safety Management Practices discount (if applicable)
- Working Safer levy – (previously Health and Safety in Employment levy) this levy is collected on behalf of WorkSafe New Zealand, to cover their costs of administering health and safety at work in New Zealand.
The CoverPlus levy uses your actual self-employed liable earnings that you filed with Inland Revenue for the previous financial year.
How do I make a claim?
The medical practitioner who treats you will submit your ACC claim. Delaying treatment delays your claim being submitted, and may make your injury worse. The sooner we receive your claim the quicker we can help you. ACC can help with your injury costs, travel and medical bills, expenses and lost earnings while you recover. After your claim is accepted, we work with you to determine what support you need.