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Tax on WINZ reimbursements ODT today

#1 User is offline   fairgo 

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Posted 19 July 2008 - 10:14 AM

There are a few mistakes here when the reporter refers to IRD when I think he actually means WINZ......

http://www.odt.co.nz/news/dunedin/13944/ca...payment-inquiry

Campaigner calls for ACC payment inquiry
By John Gibb
Created 19/07/2008 - 05:00

Dunedin ACC campaigner Denise Powell is calling for a ministerial inquiry to resolve problems with apparent double payments for tax in some ACC reimbursement cases.

Mrs Powell is president of Acclaim Otago, a support group for ACC clients, and is also a member of ACC's Consumer Outlook Group, a national forum which brings together community representatives and ACC management to discuss ACC issues.

The payment issue, recently highlighted by a concerned Dunedin ACC client, ultimately involved hundreds of cases, amounting to millions of dollars, throughout the country, Mrs Powell said.

Two of the three Government agencies involved, ACC and the Ministry for Social Development's Work and Income service, could do little themselves to resolve the underlying funding problem, she said.

A Government inquiry involving Finance Minister Michael Cullen would be the best solution to the issue, which mainly involved the third agency, IRD, she said.

The ACC client says she has faced "appalling" difficulties in trying to resolve the payment issue.

The client, who asked not to be named, said she was nevertheless optimistic that she would ultimately succeed.

She had gained some key documents involving her case which could help decide the matter in favour not only of herself, but also of many hundreds of other affected ACC clients.

If successful, she would become the first claimant in recent years to gain reimbursement of money lost through the double payment, she said.

The payment issue arises where ACC weekly compensation cover for an injury has been reinstated retrospectively, often through court action, after having been initially denied by ACC, or having been provided and later halted.

ACC initially denied cover for the Dunedin client after she was injured in 1987 and she initially received a Winz benefit.

Successful court action resulted in cover being backdated for about 20 years, she said.

Gross compensation payable by ACC was assessed about $320,000, with the subsequent gross reimbursement from ACC to Winz amounting to about $200,000.

The latter sum comprised the previously paid Winz benefit money (about $168,000) and another sum matching the $33,000 in PAYE tax on the benefit, which Winz had previously paid to IRD.

ACC had since paid the $33,000 to IRD, to reimburse the tax to Winz, officials said.

Mrs Powell says the second $33,000 payment effectively amounted to a double payment, significantly cutting the amount of backdated compensation payable to the client.

After the overall Winz reimbursement was deducted, the gross amount payable to the client was about $120,000, on which $49,000 in tax had to be paid to IRD, leaving the client with about $72,000.

Discussing the case on a hypothetical basis only, IRD and ACC officials said there was definitely no double taxation under these circumstances.

The second $33,000 payment, by ACC, effectively further restored to Winz the funds which it should not have been required to pay out, given the client's changed ACC status, officials said.

An IRD spokesman said the claimant had received a net $240,000 in the relevant period, comprising $168,000 (Winz) and $72,000 (ACC).

The claimant had paid $82,000 in tax (comprising $33,000 from Winz, and $49,000 from IRD), resulting in an overall tax level of about 25% on the about $320,000 total payment.

This showed there had been no double taxation, the spokesman said.

But Mrs Powell remains concerned.

She noted that, from the Dunedin claimant's perspective, if both $33,000 payments were included she had effectively lost a total of $115,000 in tax-related payments - equivalent to a tax rate of about 36%.

"It defies logic that you could actually have that amount taken off twice and it's not an overpayment," she said.

Wellington lawyer Jonathon Miller, who represents the Dunedin client, said that better communication from the agencies was needed to clarify confusion and allay concerns by clients.

"From a layman's perspective, it looks as if ACC clients are being asked to pay the Winz tax twice, without a satisfactory explanation to allay their fears," he said.

What had happened could ultimately prove to be "perfectly all right" but had not been properly explained.

There were unfair aspects in the Dunedin case, he said.

"A client is sometimes confused by this process," ACC lead media adviser Stephanie Julian said.

This was at least partly because the ACC client did not see the final transaction as IRD repaid Winz for the PAYE tax which Winz had earlier paid, Ms Julian said.
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#2 User is offline   Phoeniks 

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Posted 19 July 2008 - 12:41 PM

View Postfairgo, on Jul 19 2008, 10:14 AM, said:

There are a few mistakes here when the reporter refers to IRD when I think he actually means WINZ......

http://www.odt.co.nz/news/dunedin/13944/ca...payment-inquiry

Campaigner calls for ACC payment inquiry
By John Gibb
Created 19/07/2008 - 05:00

Dunedin ACC campaigner Denise Powell is calling for a ministerial inquiry to resolve problems with apparent double payments for tax in some ACC reimbursement cases.

Mrs Powell is president of Acclaim Otago, a support group for ACC clients, and is also a member of ACC's Consumer Outlook Group, a national forum which brings together community representatives and ACC management to discuss ACC issues.

The payment issue, recently highlighted by a concerned Dunedin ACC client, ultimately involved hundreds of cases, amounting to millions of dollars, throughout the country, Mrs Powell said.

Two of the three Government agencies involved, ACC and the Ministry for Social Development's Work and Income service, could do little themselves to resolve the underlying funding problem, she said.

A Government inquiry involving Finance Minister Michael Cullen would be the best solution to the issue, which mainly involved the third agency, IRD, she said.

The ACC client says she has faced "appalling" difficulties in trying to resolve the payment issue.

The client, who asked not to be named, said she was nevertheless optimistic that she would ultimately succeed.

She had gained some key documents involving her case which could help decide the matter in favour not only of herself, but also of many hundreds of other affected ACC clients.

If successful, she would become the first claimant in recent years to gain reimbursement of money lost through the double payment, she said.

The payment issue arises where ACC weekly compensation cover for an injury has been reinstated retrospectively, often through court action, after having been initially denied by ACC, or having been provided and later halted.

ACC initially denied cover for the Dunedin client after she was injured in 1987 and she initially received a Winz benefit.

Successful court action resulted in cover being backdated for about 20 years, she said.

Gross compensation payable by ACC was assessed about $320,000, with the subsequent gross reimbursement from ACC to Winz amounting to about $200,000.

The latter sum comprised the previously paid Winz benefit money (about $168,000) and another sum matching the $33,000 in PAYE tax on the benefit, which Winz had previously paid to IRD.

ACC had since paid the $33,000 to IRD, to reimburse the tax to Winz, officials said.

Mrs Powell says the second $33,000 payment effectively amounted to a double payment, significantly cutting the amount of backdated compensation payable to the client.

After the overall Winz reimbursement was deducted, the gross amount payable to the client was about $120,000, on which $49,000 in tax had to be paid to IRD, leaving the client with about $72,000.

Discussing the case on a hypothetical basis only, IRD and ACC officials said there was definitely no double taxation under these circumstances.

The second $33,000 payment, by ACC, effectively further restored to Winz the funds which it should not have been required to pay out, given the client's changed ACC status, officials said.

An IRD spokesman said the claimant had received a net $240,000 in the relevant period, comprising $168,000 (Winz) and $72,000 (ACC).

The claimant had paid $82,000 in tax (comprising $33,000 from Winz, and $49,000 from IRD), resulting in an overall tax level of about 25% on the about $320,000 total payment.

This showed there had been no double taxation, the spokesman said.

But Mrs Powell remains concerned.

She noted that, from the Dunedin claimant's perspective, if both $33,000 payments were included she had effectively lost a total of $115,000 in tax-related payments - equivalent to a tax rate of about 36%.

"It defies logic that you could actually have that amount taken off twice and it's not an overpayment," she said.

Wellington lawyer Jonathon Miller, who represents the Dunedin client, said that better communication from the agencies was needed to clarify confusion and allay concerns by clients.

"From a layman's perspective, it looks as if ACC clients are being asked to pay the Winz tax twice, without a satisfactory explanation to allay their fears," he said.

What had happened could ultimately prove to be "perfectly all right" but had not been properly explained.

There were unfair aspects in the Dunedin case, he said.

"A client is sometimes confused by this process," ACC lead media adviser Stephanie Julian said.

This was at least partly because the ACC client did not see the final transaction as IRD repaid Winz for the PAYE tax which Winz had earlier paid, Ms Julian said.

interesting fairgo, I'm looking at the same issue regarding my reimbursement/backpay from ACC. Have spoken to the IRD and have a close friend who is a chartered accountant that I'll ask to look over it for me. Even if the wrong isn't righted it will be usefull to simply understand this process. Thanks for the info.
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#3 User is offline   Phoeniks 

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Posted 19 July 2008 - 12:44 PM

View Postfairgo, on Jul 19 2008, 10:14 AM, said:

There are a few mistakes here when the reporter refers to IRD when I think he actually means WINZ......

http://www.odt.co.nz/news/dunedin/13944/ca...payment-inquiry

Campaigner calls for ACC payment inquiry
By John Gibb
Created 19/07/2008 - 05:00

Dunedin ACC campaigner Denise Powell is calling for a ministerial inquiry to resolve problems with apparent double payments for tax in some ACC reimbursement cases.

Mrs Powell is president of Acclaim Otago, a support group for ACC clients, and is also a member of ACC's Consumer Outlook Group, a national forum which brings together community representatives and ACC management to discuss ACC issues.

The payment issue, recently highlighted by a concerned Dunedin ACC client, ultimately involved hundreds of cases, amounting to millions of dollars, throughout the country, Mrs Powell said.

Two of the three Government agencies involved, ACC and the Ministry for Social Development's Work and Income service, could do little themselves to resolve the underlying funding problem, she said.

A Government inquiry involving Finance Minister Michael Cullen would be the best solution to the issue, which mainly involved the third agency, IRD, she said.

The ACC client says she has faced "appalling" difficulties in trying to resolve the payment issue.

The client, who asked not to be named, said she was nevertheless optimistic that she would ultimately succeed.

She had gained some key documents involving her case which could help decide the matter in favour not only of herself, but also of many hundreds of other affected ACC clients.

If successful, she would become the first claimant in recent years to gain reimbursement of money lost through the double payment, she said.

The payment issue arises where ACC weekly compensation cover for an injury has been reinstated retrospectively, often through court action, after having been initially denied by ACC, or having been provided and later halted.

ACC initially denied cover for the Dunedin client after she was injured in 1987 and she initially received a Winz benefit.

Successful court action resulted in cover being backdated for about 20 years, she said.

Gross compensation payable by ACC was assessed about $320,000, with the subsequent gross reimbursement from ACC to Winz amounting to about $200,000.

The latter sum comprised the previously paid Winz benefit money (about $168,000) and another sum matching the $33,000 in PAYE tax on the benefit, which Winz had previously paid to IRD.

ACC had since paid the $33,000 to IRD, to reimburse the tax to Winz, officials said.

Mrs Powell says the second $33,000 payment effectively amounted to a double payment, significantly cutting the amount of backdated compensation payable to the client.

After the overall Winz reimbursement was deducted, the gross amount payable to the client was about $120,000, on which $49,000 in tax had to be paid to IRD, leaving the client with about $72,000.

Discussing the case on a hypothetical basis only, IRD and ACC officials said there was definitely no double taxation under these circumstances.

The second $33,000 payment, by ACC, effectively further restored to Winz the funds which it should not have been required to pay out, given the client's changed ACC status, officials said.

An IRD spokesman said the claimant had received a net $240,000 in the relevant period, comprising $168,000 (Winz) and $72,000 (ACC).

The claimant had paid $82,000 in tax (comprising $33,000 from Winz, and $49,000 from IRD), resulting in an overall tax level of about 25% on the about $320,000 total payment.

This showed there had been no double taxation, the spokesman said.

But Mrs Powell remains concerned.

She noted that, from the Dunedin claimant's perspective, if both $33,000 payments were included she had effectively lost a total of $115,000 in tax-related payments - equivalent to a tax rate of about 36%.

"It defies logic that you could actually have that amount taken off twice and it's not an overpayment," she said.

Wellington lawyer Jonathon Miller, who represents the Dunedin client, said that better communication from the agencies was needed to clarify confusion and allay concerns by clients.

"From a layman's perspective, it looks as if ACC clients are being asked to pay the Winz tax twice, without a satisfactory explanation to allay their fears," he said.

What had happened could ultimately prove to be "perfectly all right" but had not been properly explained.

There were unfair aspects in the Dunedin case, he said.

"A client is sometimes confused by this process," ACC lead media adviser Stephanie Julian said.

This was at least partly because the ACC client did not see the final transaction as IRD repaid Winz for the PAYE tax which Winz had earlier paid, Ms Julian said.

Also was told by ACC that a lump sum reimbursement is taxed as if it were earned in that single tax year which doesn't seem right to me either.
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#4 User is offline   doppelganger 

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Posted 19 July 2008 - 01:12 PM

what I see here is WINZ is -paying part entitlement on behalf of ACC to client. WINZ is also paying the tax on the part payment on behalf of ACC.

ACC and winz have no pay back of the tax as it is IRD who credit ACC from the winz account. Simple and easy Its done in the public sector so it can be completed in the goverment sector.

the claimant shouldn't worry about what goes on between ACC and WINZ in how the pay money back and go ACC for not supplying the correct amount.

this means that ACC will be paying the Client an extra $33,000.00 (less Tax)

Its not the courts problem or the Client place to explain the way that WINZ or ACC are rippling off clients with double dipping to the court.

Its good that the Client is putting this out into the public.
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#5 User is offline   fairgo 

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Posted 19 July 2008 - 06:10 PM

Yes, unfortunately you are correct that when you get a backdated payment it is taxed as though it was all earned in the year you receive it. This means that you end up paying the highest tax rate .39c on everything above $60,000.
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#6 User is offline   MG 

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Posted 21 July 2008 - 04:46 PM

Well done, fairgo, and all the others involved in this. IMHO, it seems to me that the bureaucrats (ACC, DWI and IRD) have cooked up a scheme to shaft injured kiwis to an even greater degree than the system allows. I understand ACC played the lead role in all this, probably because of sour grapes after losing at review or appeal. ACC is supposed to refund the "excess benefit payment" to DWI, if one is due, and nothing more. Instead, ACC takes it upon itself to pay IRD a sum of $$$ that DWI has already paid it, from the citizen's welfare benefit entitlement. IRD is getting two bites at the cherry and saying nothing about to the taxpayer. DWI doesn't care about the tax issue, all it cares about is receiving the benefit it paid the citizen when ACC should have been paying weekly compensation but wasn't. Again IMHO, this is another of these disgraceful little bureaucratic power games that have flourished over the term of this government. While I doubt the Nats' have any interest at all in remedying abuses of power against the poor and vulnerable (as opposed to the rich and powerful who bankroll them and to whom they suck up), I'd like to think they might pick up on this as a way of driving more core Labour voters away from supporting it on election day.
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#7 User is offline   freefallnz 

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Posted 22 July 2008 - 01:07 PM

VIA SNFTAAS

High Court decision from Derrick Burston which may prove of considerable benefit to those SNFTAAS members who - like Derrick - had compensation unjustifiably withheld by ACC following registration of their (MCS) claims.

CIV 2004-404-6696

CIV 2004-404-5635

Between Commissioner of Inland Revenue and M O BUIS and DERRICK BURSTON

Hearing 12 May 2005, Judgement 14 June 2005

Derrick writes: Briefly: the interest which is payable by ACC on claims wrongly withheld - under the circumstances described in s.72 of the 1992 ACC Act are NOT liable to tax as this ‘interest’ payment is NOT “interest” within the meaning of the taxing statutes.

It took me some five years to have this sorted because when I eventually won in the lower court the IRD simply appealed to the higher court. Hence the drawn out procedure.
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#8 User is offline   MINI 

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Posted 25 July 2008 - 06:05 PM

MG

Could you be good enough to tell me what this has got to do with the labour party.

These dirty dealings were going on long before labour got in. I have the paperwork to prove it.

Fair go your Acc Client is dead wrong about being the first person paid out for these 'misdomeaners', I have received $2,500 so far. And I am afraid there are more than a few reporting errors.

I am very sad to see this article has had input from a very reputable ACC lawyer John Miller. It is negative input and could cause more than a little anxiety in a couple of cases which are heading for the high court and the Tax Review Authority this year.

Hopefully we can turn the wrongs around to our advantage and make it right. Your article will probably appear in court but I need to scrutinise it a little closer yet.

Oh, yes and your 39% tax rate is erroneous, it must have 1.2% added to it for ACC Levy = 40.2% for anything over $60.000.00 for the year. ACC usually pay you out in two goes, so I have noticed, which means you cannot get a correct amount of tax payable until the end of the financial year.

Freefall your buis and burston cases are about 'the taxing of interest', they do not include the taxing of reimbursements.

Anyone get any money out of IRD yet???

Be interesting to know. I am sure it would make a certain person or two down there happy.

I got my first dribble in 2004, but that was only the beginning.

It will all become clear and come out in the wash soon. All good things take time you know.

Cheers
Mini
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#9 User is offline   fairgo 

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Posted 28 July 2008 - 01:45 PM

Hi Mini,

Just to correct a few things.

Firstly I was only quoted in the paper in my capacity of president of Acclaim Otago, the person refered to in the article is not a 'client' of mine nor did I have any input into the 'facts' of the story. As I understand it the person concerned went to the media, the reporter did their own investigations with the relevant parties and has reported the outcomes of that. So it is not 'my' article.

Secondly I was told the tax rate I was charged was 39c in the dollar for any earnings over $60,000. Whether it had ACC levy or not is not something I can comment on. All I know is that - It was all paid in one lump sum in one financial year and therefore even though it related to previous 3 tax years earnings it was taxed as if I had earned it in the tax year that I received it. Very unfair but that's the reality of taking ACC on and getting backdated ERC.
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#10 User is offline   hukildaspida 

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Posted 28 July 2008 - 02:05 PM

View Postfairgo, on Jul 28 2008, 01:45 PM, said:

Hi Mini,

Just to correct a few things.

Firstly I was only quoted in the paper in my capacity of president of Acclaim Otago, the person refered to in the article is not a 'client' of mine nor did I have any input into the 'facts' of the story. As I understand it the person concerned went to the media, the reporter did their own investigations with the relevant parties and has reported the outcomes of that. So it is not 'my' article.

Secondly I was told the tax rate I was charged was 39c in the dollar for any earnings over $60,000. Whether it had ACC levy or not is not something I can comment on. All I know is that - It was all paid in one lump sum in one financial year and therefore even though it related to previous 3 tax years earnings it was taxed as if I had earned it in the tax year that I received it. Very unfair but that's the reality of taking ACC on and getting backdated ERC.


Also very unfair is that those who, when they do, finally get ACC backdated payments it's classified as a " Cash Asset " ( despite it being income belonging to previous years ) by WINZ & you lose all your rights to the accomodation supplement,etc which for those on a low income ( & may not previously have needed it) & doing their best to own a home is a massive kick in the guts when you could've been in a home of your own if ACC had've complied with one's Legal rights in the first place.
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#11 User is offline   MINI 

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Posted 28 July 2008 - 04:20 PM

I hate ACC

I could show you a few drawings from Corporate IRD Head Office fellas that have been in this business for a lot of years.

They are too simpililistic to show you what is really wrong with them, and I am in the middle of huge ground breaking court case, so not wise.

However, I ask whoever drew this piccie, if they understand what the tax ramifications are for each of those movements of money.

No, I didnt think they would understand.

I can tell you that IRD Corporates are supposed to be coming out with something to show us all how it works in the near future. But then, me and a fella up north have been told that since 2003 and still nothing out to show exactly how it works. In fact, they are taking the opportunity, with my case heading to Court, to ask the Judge, how they can rip us off without breaking the law!!! (Or so they think) I will stop them if I can. But then if I had a negative attitude like Mr Millar in beleiving that it could turn out alright at the end of the day, I wouldnt even try would I?

They (IRD, ACC and WINZ are all breaking the law). I have proved that. They have given me money back.

I asked when I first started this if anyone wanted to jump aboard the feathertails. I got a couple of replies. One is still in there. (And has got some money) One gave me a cellphone number to contact her (as though I am made of money). This is the same person that is mentioned in the document from ACC to the Ombudsman office. You know the one. She was named in that document on the forum. I believe this is the same person that has gone to the media.

Otago knew all about my approach through another govt entity other than WINZ and ACC as they both deny any involvement. They lie. They do what IRD tells them which is outside the PAYE rules and they rip us off. Because those of us that approach the ACC court and the WINZ Court, do not know the tax ramifications of the movement of the moneys at the time, we can never get the 'true' story across to the Judge. Don't feel bad, the same happened to me, only in my case the Judge saw the tax discrepancy that I did and said so. He also told me I was in the wrong Court. Now I know more, I do not believe I was in the wrong court, only I did not have the information to state my case properly.

For such a devious plan to be unravelled needed more that a couple months or so. however, no excuses. I can only do as much as I do, when I do it.

I do not want to get people's hopes up just to be dashed down by lack of funds to take it futher etc. So am pretty close to the chest with this information. Besides, it takes too long to explain. Need a white board to write a piccie to show you how each of those movements of monies is treated legally and why some of them cannot happen the way they do.

Remember that there are three problems here, not just one of 'double taxing'. (Its overtaxing actually) "Double taxing is too restrictive'. Each of you hits on one subject at a time but no one puts the three together and that is what is going to court in my case. It will be the first time it has ever been to Court, so gives a very clear picture of what is happening to a tax judge for the first time. And it has been going on since the eighties.

There has been no case law to help me, and I have gathered the information and documentation through pure determination and tenacity!! Hopefully I can mend any harm done by the article, especially the lawyers negative comments. Lets hope the Judge doesnt take them too meaningfully.

There is very little money left in this for me and it is purely because I can see what has happened to others, with much dire consequences than mine that I carry on. There is a lot on the forum that dont deserve to have this information, however, there are those that do and it is for those that do that I carry on.

If I succeed, well and good, if I dont well all I can say is I tried my best, I invited others along to prove the point, that we were aggreived and there was a lot of us, but only a couple were interested in coming. So maybe you will understand why I am not impressed with a little drawing from a little person with no skills.

If you have ruined these high action cases by going public, well just let the folk you have harmed poke their big guns in the right direction that is all I have to say. I am trying my best for everyone.

Fair go, watch who you put your good name up alongaside in future. Not a good look.

What if I was to intefer, with fraud, when I am not one involved. Piss a few off know doubt???

Spida You may be entitled to a top up from WINZ if you dont get over $22,000 from ACC. Have a look at the limitsfor disability allowance and help for rental or mortgage.

All of you who have been told that all income taxed in year of receipt (derived). It is correct, unfair but correct. But have Ace up sleave for court maybe will work maybe wont. Will just have to wait and see.

In meantime, you could try Wrongful Action with ACC and pick up the difference between what you would have paid and what you have paid. Need a calculator for this one.

Good luck
Mini
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#12 User is offline   MINI 

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Posted 28 July 2008 - 04:22 PM

Goodness nearly forgot, anybody other than me got any monies out of IRD yet???
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#13 User is offline   Phoeniks 

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Posted 28 July 2008 - 04:35 PM

View Postfairgo, on Jul 19 2008, 10:14 AM, said:

There are a few mistakes here when the reporter refers to IRD when I think he actually means WINZ......

http://www.odt.co.nz/news/dunedin/13944/ca...payment-inquiry

Campaigner calls for ACC payment inquiry
By John Gibb
Created 19/07/2008 - 05:00

Dunedin ACC campaigner Denise Powell is calling for a ministerial inquiry to resolve problems with apparent double payments for tax in some ACC reimbursement cases.

Mrs Powell is president of Acclaim Otago, a support group for ACC clients, and is also a member of ACC's Consumer Outlook Group, a national forum which brings together community representatives and ACC management to discuss ACC issues.

The payment issue, recently highlighted by a concerned Dunedin ACC client, ultimately involved hundreds of cases, amounting to millions of dollars, throughout the country, Mrs Powell said.

Two of the three Government agencies involved, ACC and the Ministry for Social Development's Work and Income service, could do little themselves to resolve the underlying funding problem, she said.

A Government inquiry involving Finance Minister Michael Cullen would be the best solution to the issue, which mainly involved the third agency, IRD, she said.

The ACC client says she has faced "appalling" difficulties in trying to resolve the payment issue.

The client, who asked not to be named, said she was nevertheless optimistic that she would ultimately succeed.

She had gained some key documents involving her case which could help decide the matter in favour not only of herself, but also of many hundreds of other affected ACC clients.

If successful, she would become the first claimant in recent years to gain reimbursement of money lost through the double payment, she said.

The payment issue arises where ACC weekly compensation cover for an injury has been reinstated retrospectively, often through court action, after having been initially denied by ACC, or having been provided and later halted.

ACC initially denied cover for the Dunedin client after she was injured in 1987 and she initially received a Winz benefit.

Successful court action resulted in cover being backdated for about 20 years, she said.

Gross compensation payable by ACC was assessed about $320,000, with the subsequent gross reimbursement from ACC to Winz amounting to about $200,000.

The latter sum comprised the previously paid Winz benefit money (about $168,000) and another sum matching the $33,000 in PAYE tax on the benefit, which Winz had previously paid to IRD.

ACC had since paid the $33,000 to IRD, to reimburse the tax to Winz, officials said.

Mrs Powell says the second $33,000 payment effectively amounted to a double payment, significantly cutting the amount of backdated compensation payable to the client.

After the overall Winz reimbursement was deducted, the gross amount payable to the client was about $120,000, on which $49,000 in tax had to be paid to IRD, leaving the client with about $72,000.

Discussing the case on a hypothetical basis only, IRD and ACC officials said there was definitely no double taxation under these circumstances.

The second $33,000 payment, by ACC, effectively further restored to Winz the funds which it should not have been required to pay out, given the client's changed ACC status, officials said.

An IRD spokesman said the claimant had received a net $240,000 in the relevant period, comprising $168,000 (Winz) and $72,000 (ACC).

The claimant had paid $82,000 in tax (comprising $33,000 from Winz, and $49,000 from IRD), resulting in an overall tax level of about 25% on the about $320,000 total payment.

This showed there had been no double taxation, the spokesman said.

But Mrs Powell remains concerned.

She noted that, from the Dunedin claimant's perspective, if both $33,000 payments were included she had effectively lost a total of $115,000 in tax-related payments - equivalent to a tax rate of about 36%.

"It defies logic that you could actually have that amount taken off twice and it's not an overpayment," she said.

Wellington lawyer Jonathon Miller, who represents the Dunedin client, said that better communication from the agencies was needed to clarify confusion and allay concerns by clients.

"From a layman's perspective, it looks as if ACC clients are being asked to pay the Winz tax twice, without a satisfactory explanation to allay their fears," he said.

What had happened could ultimately prove to be "perfectly all right" but had not been properly explained.

There were unfair aspects in the Dunedin case, he said.

"A client is sometimes confused by this process," ACC lead media adviser Stephanie Julian said.

This was at least partly because the ACC client did not see the final transaction as IRD repaid Winz for the PAYE tax which Winz had earlier paid, Ms Julian said.

Mini, I have recently talked with IRD about trying to understand the bizarre reimbursement stuff. Turns out ACC hadn't even filed anything with IRD regarding my reimbursement payment in 2003. God, hope this doesn't come back to bite me on the bum! but I still want to know how it works...
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#14 User is offline   fairgo 

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Posted 28 July 2008 - 04:48 PM

Mini,

I haven't put my name alongside anyones. I have been asked to comment by a reporter and I have done so. I did not go to the media, they came to me. I did not provide any figures, they did. I maintain that this is an area that needs to be exposed. Good on you for doing your bit.
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#15 User is offline   Phoeniks 

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Posted 28 July 2008 - 05:04 PM

View Postihateacc, on Jul 28 2008, 04:57 PM, said:

Fairgo............ remember mini is an injured person who appears to be able to work full time on this tax ird and winz issue so of course she knows best.

Mini I know someone in Chch who has got a refund, the person lives not far away from me.

But of course you know everything so who is to argue.

How did that person acheive that? Am very interested...
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#16 User is offline   cbragz 

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Posted 28 July 2008 - 06:37 PM

View PostMINI, on Jul 28 2008, 04:22 PM, said:

Goodness nearly forgot, anybody other than me got any monies out of IRD yet???
hello mini cbragz here , pleasen could i ask you a question ? i didnt get a payment for loss of enjoyment of life for twelve years after the accident,along with a payment to top up my win z bene pays, would i be owed interest on that twelve years withheld? would i be owed for the tax repayment? is there compound interest to be payed on the withheld interest backdated to to the date of the accident?sorry for all the questions..im trying to work out how to get a fair deal like all of us...
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#17 User is offline   MINI 

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Posted 29 July 2008 - 10:29 AM

Cbragv

As you can see by my last post I am in the middle of a big case.

You do not give me enough information to answer all your questions.

Today I do not have the time to go into much detail. However, I understand you are trying to get information for yourself and applaud you for wanting to understand, but as you will notice, I already get accused of 'working fulltime' and that is only for my own needs. It is foolish of me to try and 'overdo' things. I could lose all the hard earned rights I have battled for.

One thing I can tell you is that you will only get simple interest if any, not compound. This has been sorted at the high court. But interest is just about unobtainable under section 114 of the 2001 ACC act, so you are best to go 'cap in hand to ACC HO, thru your Tech Officer at local office and try getting a payment of interest thru that avenue.

You have asked so many different questions that it would take me a day to answer and I have got the time to do that I am sorry.

Regards
Mini
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#18 User is offline   MINI 

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Posted 29 July 2008 - 10:51 AM

Phonex

I too am interested to know how this person (friend of I hate ACC - lucky person), got their pay out from IRD and what proportion it was of the tax on backdated weekly compensation.

Very good question.

Although I do know of others that have been through local MP's etc and managed to get a payment. Not sure if it was the lot back again. Only that Mr Cullen was involved. So if you all like to bombard Mr Cullen's office you may just get some biccies back. But they just do it on a one to one bases, and if they think they can put you off they will.

The easiest and most legal way they can get rid of you is say you are out of time. And of course usually it is true. Always keep your eye on the calendar.

You were paid out in the same year as me, so all your documentation will be available from IRD or ACC. I think your tech officer at local ACC is the best best. It is very difficult to understand if you have no accounting background. You have to understand taxing of wages etc. And especially what is legal and what is not.

I agree with Fairgo that this is a issue that needs to come out into the light of day, but you need to have your facts straight and more importantly have been through the steps of Dispute with IRD, starting with a Notice of Proposed adjustment. They won't give any of us except a scattered few the time of day without going through the process. You have four months from the date of any documentation you have received from them for the year you wish to object too. If you were paid between the 1/4/2003 and 31/3/2004 and made your reimbursements to WINZ in that financial year you should have received some documentation from IRD dated 31/3/2004, check those with the payments made by ACC to IRD for the same year on your behalf. If the monies dont match you have a discrepancy and can ask for an explanation why this is so. But dont forget your timelimit for your NOPA. If you have recently got your monies, within the Review timelimit, even get a Review to ACC in as well, for the same issue.

Let me know what you think

Cheers Mini

This is as much as I have time for today.
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#19 User is offline   MINI 

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Posted 15 May 2017 - 02:22 PM

View Postfairgo, on 19 July 2008 - 10:14 AM, said:

There are a few mistakes here when the reporter refers to IRD when I think he actually means WINZ......

http://www.odt.co.nz/news/dunedin/13944/ca...payment-inquiry

Campaigner calls for ACC payment inquiry
By John Gibb
Created 19/07/2008 - 05:00

Dunedin ACC campaigner Denise Powell is calling for a ministerial inquiry to resolve problems with apparent double payments for tax in some ACC reimbursement cases.

Mrs Powell is president of Acclaim Otago, a support group for ACC clients, and is also a member of ACC's Consumer Outlook Group, a national forum which brings together community representatives and ACC management to discuss ACC issues.

The payment issue, recently highlighted by a concerned Dunedin ACC client, ultimately involved hundreds of cases, amounting to millions of dollars, throughout the country, Mrs Powell said.

Two of the three Government agencies involved, ACC and the Ministry for Social Development's Work and Income service, could do little themselves to resolve the underlying funding problem, she said.

A Government inquiry involving Finance Minister Michael Cullen would be the best solution to the issue, which mainly involved the third agency, IRD, she said.

The ACC client says she has faced "appalling" difficulties in trying to resolve the payment issue.

The client, who asked not to be named, said she was nevertheless optimistic that she would ultimately succeed.

She had gained some key documents involving her case which could help decide the matter in favour not only of herself, but also of many hundreds of other affected ACC clients.

If successful, she would become the first claimant in recent years to gain reimbursement of money lost through the double payment, she said.

The payment issue arises where ACC weekly compensation cover for an injury has been reinstated retrospectively, often through court action, after having been initially denied by ACC, or having been provided and later halted.

ACC initially denied cover for the Dunedin client after she was injured in 1987 and she initially received a Winz benefit.

Successful court action resulted in cover being backdated for about 20 years, she said.

Gross compensation payable by ACC was assessed about $320,000, with the subsequent gross reimbursement from ACC to Winz amounting to about $200,000.

The latter sum comprised the previously paid Winz benefit money (about $168,000) and another sum matching the $33,000 in PAYE tax on the benefit, which Winz had previously paid to IRD.

ACC had since paid the $33,000 to IRD, to reimburse the tax to Winz, officials said.

Mrs Powell says the second $33,000 payment effectively amounted to a double payment, significantly cutting the amount of backdated compensation payable to the client.

After the overall Winz reimbursement was deducted, the gross amount payable to the client was about $120,000, on which $49,000 in tax had to be paid to IRD, leaving the client with about $72,000.

Discussing the case on a hypothetical basis only, IRD and ACC officials said there was definitely no double taxation under these circumstances.

The second $33,000 payment, by ACC, effectively further restored to Winz the funds which it should not have been required to pay out, given the client's changed ACC status, officials said.

An IRD spokesman said the claimant had received a net $240,000 in the relevant period, comprising $168,000 (Winz) and $72,000 (ACC).

The claimant had paid $82,000 in tax (comprising $33,000 from Winz, and $49,000 from IRD), resulting in an overall tax level of about 25% on the about $320,000 total payment.

This showed there had been no double taxation, the spokesman said.

But Mrs Powell remains concerned.

She noted that, from the Dunedin claimant's perspective, if both $33,000 payments were included she had effectively lost a total of $115,000 in tax-related payments - equivalent to a tax rate of about 36%.

"It defies logic that you could actually have that amount taken off twice and it's not an overpayment," she said.

Wellington lawyer Jonathon Miller, who represents the Dunedin client, said that better communication from the agencies was needed to clarify confusion and allay concerns by clients.

"From a layman's perspective, it looks as if ACC clients are being asked to pay the Winz tax twice, without a satisfactory explanation to allay their fears," he said.

What had happened could ultimately prove to be "perfectly all right" but had not been properly explained.

There were unfair aspects in the Dunedin case, he said.

"A client is sometimes confused by this process," ACC lead media adviser Stephanie Julian said.

This was at least partly because the ACC client did not see the final transaction as IRD repaid Winz for the PAYE tax which Winz had earlier paid, Ms Julian said.



In this write up they are using the word 'double taxing', that phrase should never be used with or about tax with anyone. The word 'overpayment' as in payment to IRD of taxation, which is too high. 'double' taxing is too restrictive as it mean it has to be an exact amount and we do not know an exact amount until the right calculation has been done.

Just letting newbies know for Otago claimants getting payouts etc.

Mini
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