Publications
Does ACC owe you money?
Were you an employer before 1 April 1980 but your business or its structure has changed? You could qualify for a considerable refund from the ACC. But time may be of the essence.
Ceasing business and cessation adjustments
Regulations provided that where a person ceased being an employer in relation to a business started before April 1980, then a cessation adjustment would be available. By claiming a cessation adjustment, employers were effectively refunded "unused" ACC levies.
Notwithstanding these provisions, many companies that ceased being employers in relation to a business did not claim cessation adjustments. This may have been simply an oversight or because Inland Revenue (which administered ACC) guarded ACC's purse vigilantly and denied cessation adjustments if the company claiming the adjustment continued in some other business and so could not show that it had completely shut down. This position was challenged in a dispute involving New Zealand Forest Products where it was found that a cessation adjustment was available when a business ceased, notwithstanding that the employer may continue some other business.
However, by this stage ACC was also firmly of the view that cessation adjustments had to be claimed within approximately 2 ½ months of a business ceasing and claims lodged outside this time were disallowed.
Some of our clients re-organised their affairs after March 1980 and did not claim cessation adjustments. Notwithstanding this, ACC identified them as "later scheme employers" and last year sent them further invoices for the so called 1998/1999 premium year, effectively double charging them.
The double charge arose because although these employers continued to pay levies in advance, ACC categorised them as "later scheme employers" (on the basis of their re?organisation after March 1980) and said they should be treated as having paid levies in arrears.
When this came to our attention we made numerous submissions to Dr Cullen and ACC.
After much debate and correspondence it was agreed as a concession that employers who had in effect been double charged, or who had not claimed an adjustment within the 2 ½ month period would be given an opportunity to recover their loss by claiming a cessation adjustment, albeit outside the supposed time limit.
Where to from here
ACC set up a team to consider the so-called late cessation adjustment applications. We have had considerable success in securing substantial refunds for clients. However, the way in which these late cessation adjustments were allowed suggests ACC see this as a concession and we expect that ACC will soon want to close its books.
We therefore urge you to consider your position carefully and contact us if you think your facts could warrant claiming a cessation adjustment.
Disclaimer
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
