Tuesday November 13, 2018
Friday, 31 August 2018 18:58

ACC apologises for over-billing self-employed, says fix on the way

ACC is encouraging people to contact it if they think they may have been impacted by a billing issue which it hopes to fix tonight. ACC is encouraging people to contact it if they think they may have been impacted by a billing issue which it hopes to fix tonight. TOM PULLAR-STRECKER/STUFF

ACC has admitted it has been over-billing some self-employed people who are earning small amounts of money from part-time work, by incorrectly assuming they are in fact working full-time.

Spokesman James Funnell apologised and said a fix would be put in place overnight on Friday. It didn't yet know how many people might have been impacted.

"We are currently doing some analysis to identify anyone impacted by the issue so we can check and correct their details, and of course organise any refunds that might result from the correction," he said.

Stuff is aware of one case where a sole trader with a taxable income of less than $9000 received a bill of more than $500 from ACC for the financial year just closed.

That was after ACC changed its previous assumption that she was working part-time – despite a drop in her income – and assumed she was working full time.

ACC says its rules mean that if self-employed people are believed to be working more than 30 hours a week, it will invoice them as if they had earned the minimum wage for full-time employment.

That is regardless of their actual income, so the error meant the woman was invoiced as if she had earned $32,740 during the year.

ACC withdrew its invoice and slashed it in quarter when challenged, recognising the earnings should have been treated as being from part-time work.

But the woman was concerned other people could overlook similar errors and overpay their ACC levy if they were earning closer to the $32,740 threshold.

"It just raised alarm bells for me because it was quite substantially more than I paid last year. But if it had of been a bit closer I would probably have just paid it.

"Also, they said they were 'obligated' to put it onto the $32,000 thing. What is that about? There is no-defined minimum level of earnings if you are self-employed," she said.

"I could work 100 hours a week and still earn $8000."

Funnell said the policy existed because if people were working full-time but earning less than the equivalent of the  minimum wage, ACC would pay weekly compensation at the minimum wage rate if they were injured. "The minium levy reflects that."

ACC based its assumption on whether people were full or part-time on their income and business activity, he said.

"Tax returns don't ask for the average number of hours worked, so our levy system uses a number of business rules to try to work out whether a customer has worked full-time or part-time," he said.

"We recognise this is not an exact science, so the front page of every invoice shows whether we have calculated the levy based on full-time or part-time employment, and asks people to contact us if this is not correct.

"When a customer calls us to correct their employment status, this is a very simple correction which results in a reversal of the original invoice and a new, correct, invoice sent out," he said.


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