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IRD & the Working tax credit while on ACC

#1 User is offline   SweetPotatoe 

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Posted 05 June 2019 - 01:51 PM

Hi,last year while I was talking to IRD, they told me that my partner was entitled to be paid a working tax credit while on ACC. He has been on ACC since 2002 and will be on it until he dies. They said that they will pay an initial amount and over the next month will work out how much he will be owed and back dated for, they estimated approx. 35K. So they paid the initial amount which was approx. $4k into our acct and gave a date as to when the would have a figure for the backdated amount. OUr WFF alslo inrcreased by arund $80 per week effective immediatley.

I questioned them many time over the course of the conversation asking them, ARE YOU SURE??? They went to at least three supervisors, one each time a more senior level than the previous manager and each one came back with the ok, yes you are entitled to it. A month goes by and I have heard nothing, so I ring them. Apparantly they have ALL made a BIG MISTAKE and no we were not entitled to any working tax credit. Initially they asked us to pay the $4k they had already paid out to us back, we protested and won so we didnt have to due to hardship.

Has this happend to anyone else? We are devastated.
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#2 User is offline   tommy 

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Posted 05 June 2019 - 06:53 PM

View PostSweetPotatoe, on 05 June 2019 - 01:51 PM, said:

Hi,last year while I was talking to IRD, they told me that my partner was entitled to be paid a working tax credit while on ACC. He has been on ACC since 2002 and will be on it until he dies. They said that they will pay an initial amount and over the next month will work out how much he will be owed and back dated for, they estimated approx. 35K. So they paid the initial amount which was approx. $4k into our acct and gave a date as to when the would have a figure for the backdated amount. OUr WFF alslo inrcreased by arund $80 per week effective immediatley.

I questioned them many time over the course of the conversation asking them, ARE YOU SURE??? They went to at least three supervisors, one each time a more senior level than the previous manager and each one came back with the ok, yes you are entitled to it. A month goes by and I have heard nothing, so I ring them. Apparantly they have ALL made a BIG MISTAKE and no we were not entitled to any working tax credit. Initially they asked us to pay the $4k they had already paid out to us back, we protested and won so we didnt have to due to hardship.

Has this happend to anyone else? We are devastated.

you need competent legal advice as in this matter ,,, not a question of others ,, all cases are different .. . a starting point could ,, example a simple phone call to ie hazel , Armstrong law .. or others as evaluating your issues ,,,,,,,,,,,,,,,,,,
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#3 User is offline   Brucey 

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Posted 06 June 2019 - 09:08 AM

I agree with tommy, you need to have a professional take a look, an advocate or lawyer.

I would not take ACC's word for anything when it comes to interpretation of the law.

you could very well have some entitlement, there must be something in it for them to have raised the subject.

Too much money concerned, to ignore.
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#4 User is offline   Huggy 

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Posted 06 June 2019 - 09:22 AM

Brucey from what I read it was IRD that said to the person you are eligible for the tax credits and not ACC. I stand to be corrected but I have only ever known that it is IRD who pays these tax credits to your bank if you are eligible for them.

From personal experience, I have queried the WFTC (working for families tax credits) through IRD and have never been eligible for it for the reason that I am receiving ACC ERC.

From what I was told is you only get the WFTC if you work 20 hours or more per week as a single person, or combined of 30 hours or more per week if a couple. When receiving ACC ERC it is not recognised by any organisation that i know of as someone "working" for this ERC.

FTC (family tax credits), or formerly known by many as family support, is calculated by how many children you have, the age of the children, the amount of ACC ERC your husband gets, along with any income you receive, where these 2 sources of income are combined together to get a total sum and if you are below set cut off points (cut off points determined by how many children you have), you will get the FTC.

In effect the more income that comes into the household, and the closer you get to the cut off points, the less FTC you will receive to the point where you exceed the maximum allowable cut off threshold where you will not get the FTC.
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#5 User is offline   MINI 

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Posted 06 June 2019 - 12:18 PM

View PostSweetPotatoe, on 05 June 2019 - 01:51 PM, said:

Hi,last year while I was talking to IRD, they told me that my partner was entitled to be paid a working tax credit while on ACC. He has been on ACC since 2002 and will be on it until he dies. They said that they will pay an initial amount and over the next month will work out how much he will be owed and back dated for, they estimated approx. 35K. So they paid the initial amount which was approx. $4k into our acct and gave a date as to when the would have a figure for the backdated amount. OUr WFF alslo inrcreased by arund $80 per week effective immediatley.

I questioned them many time over the course of the conversation asking them, ARE YOU SURE??? They went to at least three supervisors, one each time a more senior level than the previous manager and each one came back with the ok, yes you are entitled to it. A month goes by and I have heard nothing, so I ring them. Apparantly they have ALL made a BIG MISTAKE and no we were not entitled to any working tax credit. Initially they asked us to pay the $4k they had already paid out to us back, we protested and won so we didnt have to due to hardship.

Has this happend to anyone else? We are devastated.


Hi there

Could you tell me what WFF means. Thanks

Mini
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#6 User is offline   tommy 

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Posted 06 June 2019 - 04:30 PM

View PostHuggy, on 06 June 2019 - 09:22 AM, said:

Brucey from what I read it was IRD that said to the person you are eligible for the tax credits and not ACC. I stand to be corrected but I have only ever known that it is IRD who pays these tax credits to your bank if you are eligible for them.

From personal experience, I have queried the WFTC (working for families tax credits) through IRD and have never been eligible for it for the reason that I am receiving ACC ERC.

From what I was told is you only get the WFTC if you work 20 hours or more per week as a single person, or combined of 30 hours or more per week if a couple. When receiving ACC ERC it is not recognised by any organisation that i know of as someone "working" for this ERC.

FTC (family tax credits), or formerly known by many as family support, is calculated by how many children you have, the age of the children, the amount of ACC ERC your husband gets, along with any income you receive, where these 2 sources of income are combined together to get a total sum and if you are below set cut off points (cut off points determined by how many children you have), you will get the FTC.

In effect the more income that comes into the household, and the closer you get to the cut off points, the less FTC you will receive to the point where you exceed the maximum allowable cut off threshold where you will not get the FTC.

i .. to the aboves ,,, some other party may have eligibility to those tax credits ,,, if decided by both parties ,,, and hence until . one knows the full [particulars ,,, … .
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#7 User is offline   spacefish 

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Posted 06 June 2019 - 07:52 PM

WFF

Working for Families is made up of four different parts:

In-work tax credit: A payment for families where the parents have paid work for a required amount of hours.
Minimum family tax credit: A payment to make sure families are getting a basic income where the parents are working the required amount of hours for salary and wages.
Family tax credit: A payment for each child in the family.
Best Start: A special payment for up to three years.

We work out a total amount based on your income, children and circumstances. You need to tell us when any of these change as this will affect your payments.

https://www.ird.govt...-families-works

In Detail:
https://www.ird.govt...ilies-in-detail

Because you're on ACC weekly and effectively treated as a worker or wage earner, you should be entitled as long as your income places you within the correct income limit. If you think your income is within the right limits, then I'd suggest checking in with an Accountant or family budget advisor who can help iron out the wrinkles.
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#8 User is offline   Huggy 

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Posted 07 June 2019 - 09:14 AM

Spacefish some of the above you are indeed entitled to but the in working tax credit is a no go to ACC recipients. ERC albeit replacement income, is not treated as working any hours to get that money and the working tax credit is only paid if a single person works 20 hours or more per week, or a couple works 30 hours or more per week.

You also cannot get a contribution to Kiwisaver from ACC as an employer does.

Been there done that with IRD about the in working tax credit and the first poster even confirms that IRD made a mistake when they initially said they could get the tax credit.
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#9 User is offline   spacefish 

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Posted 07 June 2019 - 10:56 AM

View PostHuggy, on 07 June 2019 - 09:14 AM, said:

Spacefish some of the above you are indeed entitled to but the in working tax credit is a no go to ACC recipients. ERC albeit replacement income, is not treated as working any hours to get that money and the working tax credit is only paid if a single person works 20 hours or more per week, or a couple works 30 hours or more per week.


Huggy is that the In Work Tax Credit? According to their old website people on ERC were included and in the following pdf:
https://www.classic....r201-apr-19.pdf


Quote

To get the in-work tax credit couples must normally work at least 30 hours a week between them, and a single parent must normally work at least 20 hours a week.
Provided you work the required hours, you may also get the in-work tax credit if you're self-employed, or receiving paid parental leave
or accident compensation. It's not available to families receiving an income-tested benefit or student allowance.



You can never work the required hours if you are receiving PPL or ACC etc ... the way it was said to me it was done on an "as if" basis, that is as if you normally worked xx hours or more per week but currently didn't as you were on a substituted income.

So if that is not right, then they need to (at least) update their April 2019 pdf I linked to above. ;)
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#10 User is offline   Huggy 

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Posted 07 June 2019 - 04:19 PM

Yes indeed if the partner (sweetpotato) and her partner are working more than 30 hours per week, then they can claim the in work tax credit, but is she isn't working, then her husband who is on ACC, who is not working would not be eligible for the in work tax credit.

I could have assumed wrong but when sweetpotato said that IRD said they made an error and they shouldnt receive the tax credit I assumed that the acc client and sweetpotato are not working or not meeting the 30 hour per week requirement to get the tax credit.

In my situation, as the only income was ACC, I therefore did not meet the 20 hour a week criteria, i was not eligible for the in work tax credit, but certainly was eligible for the family tax credit for my boys.

As you pointed out above

To get the in-work tax credit couples must normally work at least 30 hours a week between them, and a single parent must normally work at least 20 hours a week.
Provided you work the required hours, you may also get the in-work tax credit if you're self-employed, or receiving paid parental leave
or accident compensation. It's not available to families receiving an income-tested benefit or student allowance.
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#11 User is offline   Alan Thomas 

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Posted 07 June 2019 - 05:16 PM

Again and again I have established with the ACC that while receiving in is compensation a claimant is in every single respect accepted as someone who was working. For example someone suffering from another injury while on ACC compensation have their new injury claim accepted in the same manner as if they are working. The ACC scheme is a no fault system and as such a claimant is treated as if they are working.

So ACC should be treating you as you view are a full-time employee while ACC on earnings compensation.

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#12 User is offline   tommy 

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Posted 07 June 2019 - 05:42 PM

View PostAlan Thomas, on 07 June 2019 - 05:16 PM, said:

Again and again I have established with the ACC that while receiving in is compensation a claimant is in every single respect accepted as someone who was working. For example someone suffering from another injury while on ACC compensation have their new injury claim accepted in the same manner as if they are working. The ACC scheme is a no fault system and as such a claimant is treated as if they are working.

So ACC should be treating you as you view are a full-time employee while ACC on earnings compensation.

acc is an income as in earnings ,, ie if is all igitimate ,,,,,,allan
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#13 User is offline   tommy 

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Posted 07 June 2019 - 05:44 PM

View Posttommy, on 07 June 2019 - 05:42 PM, said:

acc is an income as in earnings ,, ie if is all igitimate ,,,,,,allan

as tax credits are concerned there are varying ,,, forms which are then to be calculated ,,,,,,,,,,,,,,,,
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#14 User is offline   Alan Thomas 

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Posted 07 June 2019 - 05:59 PM

View Posttommy, on 07 June 2019 - 05:42 PM, said:

acc is an income as in earnings ,, ie if is all igitimate ,,,,,,allan


Tommy you have got that backwards.
ACC earnings as income but income is not necessarily earnings.
It is essential that you appreciate the difference between the meaning of these two words.
For example the person receiving earnings compensation cannot be considered a beneficiary but instead must be considered as an earner. Therefore the claimant is not only liable to have these earnings taxed but also receives the other entitlements as an earner.

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#15 User is offline   spacefish 

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Posted 07 June 2019 - 06:08 PM

View PostHuggy, on 07 June 2019 - 04:19 PM, said:

To get the in-work tax credit couples must normally work at least 30 hours a week between them, and a single parent must normally work at least 20 hours a week.
Provided you work the required hours, you may also get the in-work tax credit if you're self-employed, or receiving paid parental leave
or accident compensation. It's not available to families receiving an income-tested benefit or student allowance.


What about:
To get the in-work tax credit couples must normally work at least 30 hours a week between them, and a single parent must normally work at least 20 hours a week.
So normally these are your expected working hours, but due to PPL or injury (and therefore WC) you now can't - but NORMALLY you were.

Provided you work the required hours, you may also get the in-work tax credit if you're self-employed, or receiving paid parental leave
or accident compensation.
Well you're NOT working if you're receiving PPL or ERC.


So ...

Quote

MD 9
Fifth requirement: full-time earner

Normally full-time earner
(1) The fifth requirement for an entitlement to an in-work tax credit is that either or both the person referred to in section MD 4 and their spouse, civil union partner, or de facto partner, is normally a full-time earner (the earner). Also, the earner must—(a) derive income as set out in subsections (2) and (3) as a full-time earner or derive an amount of compensation described in subsection (4); or
(b ) if they are a full-time earner in relation to a close company, be a major shareholder in the close company, and the company must derive gross income in the income year.
Income
(2) The income referred to in subsection (1)(a) is—(a) a PAYE income payment that is—(i) not excluded under subsection (3), although it does not matter if the person also derives income of the type described in subsection (3); and
(ii) not a benefit or allowance described in section MD 8; or

(b )
income, other than from a PAYE income payment, to which section RD 3B or RD 3C (which relate to income other than PAYE) applies; or
(c ) income from a business carried on for profit; or
(d) an amount paid or benefit provided—(i) by a person (the claimant), who receives a personal service rehabilitation payment from which an amount of tax has been withheld at a rate specified in section RD 10B (Amounts of tax for schedular payments); and(ii) to another person for providing to the claimant a key aspect of social rehabilitation referred to in paragraph © of the definition of personal service rehabilitation payment in section YA 1(Definitions).
Exclusions from income
(3) The following PAYE income payments are excluded from income under subsection (2):
(a) a payment referred to in paragraphs (a) to © of the definition of accident compensation earnings-related payment:(b ) a PAYE income payment referred to in section RD 5(6)(a) (Salary or wages), other than a parental leave payment or preterm baby payment referred to in section CF 1 (Benefits, pensions, compensation, and government grants):(c ) a PAYE income payment referred to in section RD 5(6)(bb), (bc), or (bd):(d) a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor:(e) an amount paid as a result of incapacity, suffered before 1 January 2006, due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001.
Compensation payments for personal injury
(4) A person meets the fifth requirement if—
(a) they receive a child tax credit for an entitlement period ending on 31 March 2006; and
(b ) on or after 1 January 2006, they or their spouse, civil union partner, or de facto partner suffers an incapacity due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001; and
(c ) weekly compensation within the meaning of section 6 of the Accident Compensation Act 2001, is or will be paid for the incapacity; and(d) the person or their spouse, civil union partner, or de facto partner would have met the fifth requirement in deriving income as a full-time earner under subsection (1)(a) and been eligible for the tax credit calculated using the formula in section MD 10 at the time of the incapacity had this section come into force before the date of the incapacity.
Absence from work due to birth of child
(5) Despite subsection (1), a person also meets the fifth requirement if they are normally a full-time earner as described in subsection (1)(a) but, in a 1-week period, they do not work, or work less than, the number of hours required to be a full-time earner because of the birth of a child. However, this subsection applies only if the person is entitled to receive the parental tax credit for the child.


http://www.legislati..._resel_25_h&p=1
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#16 User is offline   tommy 

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Posted 07 June 2019 - 06:10 PM

View PostAlan Thomas, on 07 June 2019 - 05:59 PM, said:

Tommy you have got that backwards.
ACC earnings as income but income is not necessarily earnings.
It is essential that you appreciate the difference between the meaning of these two words.
For example the person receiving earnings compensation cannot be considered a beneficiary but instead must be considered as an earner. Therefore the claimant is not only liable to have these earnings taxed but also receives the other entitlements as an earner.

which can be a taxable activity ,,,allan ,,,,,,,,,,,,
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#17 User is offline   Huggy 

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Posted 07 June 2019 - 06:15 PM

Ahhhhh ok the reason I didnt get it is because my injury was before 1 Jan 2006 as set out in 4(b )

I wonder why they they exclude people who received an injury before this date.

sweetpotato partner also suffered his injury before 1 Jan 2006

That seems unfair that people who suffer an injury before the 2006 date are excluded from the tax credit...........
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#18 User is offline   spacefish 

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Posted 07 June 2019 - 06:30 PM

Huggy - I agree, it is very unfair ... and I don't know how newer Acts v older Acts go but ...

Check here:
Income Tax Act 2004
KD 2AAA In-work tax credit
http://www.legislati....html#DLM265717



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#19 User is offline   Huggy 

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Posted 07 June 2019 - 06:53 PM

Spacefish you are right and i am right lol.......that is an eye opener indeed that anybody injured before 2006 is excluded, it almost borders on discrimination i wonder.
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#20 User is offline   Alan Thomas 

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Posted 07 June 2019 - 06:59 PM

View Posttommy, on 07 June 2019 - 06:10 PM, said:

which can be a taxable activity ,,,allan ,,,,,,,,,,,,


what activity?
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