ACC attendant care payments are payments made by ACC to any injured claimants for any services supplied by caregivers, either contracted or independent of the claimant’s choice. These payments that ACC now grant are treated wholly as income for the claimant following the new section CF 1(2)(g) of the Income Tax Act. These recent changes in provision stand to be effective since the 1st of April in 2007 following changes to the income tax 2004 and tax administration act 1994. Whereby, injured claimants are exempt from tax payments from the payments (income) provided by ACC to the claimant’s caregiver choice and services.
However, these payments are conditional, abiding by strict guidelines for the income received within a few sections of the amended Income Tax Act 2004.
Firstly, the new section, CW 28B, enacts that the claimant must use all the granted money they receive “as an ACC attendant care payment to pay for his or her attendant care” exclusively. To become exempt from tax for this income received, the condition that these payments “are applied for attendant care purposes” solely must be followed closely and correctly.
Secondly, section DF 4 of the Act emphasizes the above and primary condition of these ACC attendant care payments, further reiterating that a claimant’s full ACC money payment received must be paid entirely to the caregiver. If this does not happen, then tax will be required to be paid “on the portion of the ACC payment not paid to the caregiver”. The percentage associated with this tax is 15%.
Lastly, claimants are not required to file income returns if the income provided for the tax year is the only income. Tax will also be withheld in these circumstances following that the conditions of the first and second points above are followed correctly, present in section 22A(1)(a)(iiic) of the Act.
Furthermore, additional sections to note are within s33C, CE12, LD 1B of the Act. S33C states that a caregiver’s annual income, if not exceeding $9,500, will not be required to furnish a return of income for that income year. Whereas CE12 and LD 1B of the Act “provides the mechanism for a caregiver to recognize and take into account tax that has been withheld by ACC”.
If ACC Attendant Care Payments apply to you, whether that is currently, in the past or the future; it is ideal to have the full knowledge and services behind you to support you in your income tax, application and, or questions.
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