ACC - personal service rehabilitation payments

Sections MD 9(2), RD 3(1) and YA 1 of the Income Tax Act 2007

The following minor changes have been made to ensure that amendments made in the Taxation (Business Taxation and Remedial Matters) Act 2007 work as intended:

• a drafting error that meant that, technically, ACC was not required to deduct tax and claimants who pay their carers directly were, has been corrected;
• the full-time earner requirement for the in-work tax credit has been amended to ensure that personal service rehabilitation payments count as a “PAYE income payment” for the purposes of this tax credit; and
• any doubt that the current provisions apply to personal service rehabilitation payments entitlements arising under enactments before the Injury Prevention, Rehabilitations, and Compensation Act 2001 has been removed.

Details of the changes made in 2007 are set out on pages 102 and 103 of Tax Information Bulletin: Vol 20, No 3 (April 2008).

Application date

The amendment applies from 1 July 2008.