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ACC premiums for Contractors



This article is a little complicated but that's what we all love about ACC isn't it?


How much premium do you owe?
The amount of premium you owe ACC for work and non-work cover up to 30 June 1999 depends largely on whether you are classified under the Accident Insurance Act 1998 as a First Scheme self-employed person or a Later Schemes self-employed person.

First Scheme self-employed
You are a First Scheme self-employed person if you were self-employed on 30 September 1979, and continued to be self-employed through to 1 July 1999.

Later Schemes self-employed
You are a Later Schemes self-employed person if you started in business after 30 September 1979, or have not been continuously self-employed since that date. Most self-employed people are Later Schemes self-employed.

First Scheme self-employed
As a First Scheme self-employed person, you will receive two invoices:

The 3-month invoice
The 3-month invoice is for ACC premiums for both work and non-work accident insurance cover (your Earner Premium and your Employer Premium) you have received for the 3-month period from 1 April 1999 to 30 June 1999.

The 12-month invoice
The 12-month invoice is for ACC premiums for non-work accident insurance cover (your Earner Premium) you have received for the 12-month period from 1 April 1998 to 31 March 1999.

Later Schemes self-employed
As a Later Schemes self-employed person, you will receive two invoices:

The 3-month invoice

The 3-month invoice is for ACC premiums for both work and non-work accident insurance cover (your Earner Premium and your Employer Premium) you have received for the 3-month period from 1 April 1999 to 30 June 1999.

The 12-month invoice
The 12-month invoice is for ACC premiums for both work and non-work accident insurance cover (your Earner Premium and your Employer Premium) you have received for the 12-month period from 1 April 1998 to 31 March 1999.

When do I have to pay?
The 3-month Premium is due and payable within 30 days of the date of invoice.

With the 12-month Premium if you pay in full within 30 days of the date of the invoice, you will receive a 5% discount:
If your premium is $250 or less, payment is due in full within 30 days of the date of the invoice and you will receive a 5% discount.
If your premium is more than $250, payment is due in full by 30 June 2000 for invoices issued before 1 May 2000. For invoices issued after 1 May 2000 payment is due in full within 60 days.
If your premium is $2000 or more, then providing you pay at least one third:
by 30 June 2000 for invoices issued before 1 May 2000, and within 60 days for invoices issued after 1 May 2000, you can pay the balance by instalments for up to a further two years with the full amount being paid by 30 June 2002. Interest of 10% per annum will apply to outstanding balances on instalment plans from 1 July 2000. The minimum monthly instalment is $250.

You have 30 days to contact and reach agreement with ACC on your instalment arrangements.

All amounts exclude GST.

How your premium is calculated

Your invoice will contain the following information, which is used to calculate your premium.

Your Premium Classification Unit (PCU)
This describes your main type of business activity as classified by Inland Revenue. Only the highest rated activity will be used.

Your Premium Classification Number
This is the number of that classification unit (PCU).

Your Premium Classification Rate
This rate is based on the industry you work in and the level of risk associated with that industry as set by regulation.

FMIU
This specifies your self-employment. The codes are:
F Full-time, U Other (for example, part time)

Your Liable Earnings

The earnings calculated on your tax return that are liable for ACC premiums.

Your Adjusted Liable Earnings
If your liable earnings were above $81,008, your cover and premium will be based on a figure of $81,008. If your liable earnings were below $13,467 then your cover and premium will be based on $13,467 . Minimum's only apply if your FMIU code is F - i.e. you work more than 30 hours a week. For the 3-month invoice, your liable earnings are divided by four to calculate your adjusted liable earnings for this period.

Calculation of premiums
Earner Premium - this is calculated at $0.7111 per $100 of your adjusted liable earnings.

Employer Premium - This is calculated by multiplying your adjusted liable earnings by the Premium

Reassessments
If any of the information used in calculating your invoice changes, then your ACC premium will be reassessed using the new information ACC will receive from Inland Revenue.

Why do I have to pay in advance?
You have to pay your Residual Claims Levy in advance because its left- over debt from the old ACC. ACC is now invoicing people like a commercial insurance company would.



   
   
   
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