Corporation has exceeded its power under law
The Corporation has unlawfully failed to levy and therefore provide entitlement on PAYE schedular payments earned by self-employed earners since the 1st of April 2008.
ACC legislation is quite complex and this reality has been a friend for the Corporation since its inception. When cornered over an issue, Corporation staff throw around random pieces of legislation until whomever is scrutinizing them gets all turned around and gives up. ACC staff are very good at this. With that in mind this page seeks to provide the most basic explanation possible.
The biggest problem for the Corporation is that in this case, the argument centers around objective "strictly interpreted law" and not the subjective parts of the legislation ACC is well versed in manipulating. The best way to consider "strictly interpreted law" is to see it the same way as the stop sign we encounter on the road.
Stop means stop. Anyone who has a drivers license knows this. Stop does not mean slow right down or be extra careful, it means stop. There is only one way to interpret the word "stop". The same principle applies when applying the levy / entitlement processes in the Accident Compensation Act 2001. The wording of the legislation applies exactly as it is written just like the stop sign. It is not possible under law to argue that another meaning can apply to the legislation in question.
Levies and Entitlements
Levies are essentially the same as the premiums people pay for our private insurance. Levies are called levies because the "premiums" are "levied" on all of us by compulsory legislation. Levies is money coming in and entitlement is money being paid out on claims.
Evidence of Section 221 Levy Process Failure
It is fact that the Accident Compensation Corporation has willfully made a decision to not levy the PAYE income of self-employed earners. The result of this failure is that thousands of self-employed claimants have been unlawfully denied their legal entitlements to weekly compensation and as a result of that vocational rehabilitation as well.
The proof that the Corporation has made the decision in question and how it "applies" this decision is found in this extract from a document obtained under the official information act on the 25th of June 2018. OIA Document
Corporation interpretation of the legislation applying to payment of levies for schedular payments
Section 221 (l)(a) of the Accident Compensation Act 2001 (AC Act) describes the way in which ACC levies are to be deducted from the earnings of the person as an employee of the employer, or their agent.
Section 6 of the AC Act provides definitions for the purposes of the AC Act. This section confirms that earnings as an employee has the meaning set out in sections 9 to 13.
Section 9 defines earnings as an employee as all PAYE income payments of the person in the tax year, subject to sections 10 to 13.
Section I l(l)(a) of the AC Act confirms that schedular payments are not earnings as an employee for the purposes of the AC Act.
Therefore, the levy liabilities of schedular payments are not considered under section 221 of the AC Act.
While Schedule 4, clause 22 of the AC Act advises that the meanings under the Income Tax Act 2007 apply to that schedule, this context only applies to income that has been determined as employee income under section 221. As above, schedular payments are excluded as a form of employee income for the purposes of the AC Act.
On face value that does look like a credible argument but closer scrutiny swiftly shows otherwise.
What this extract demonstrates is that the Corporation has "decided" what can and cannot be levied under section 221 of the AC Act 2001. The Corporation describes here how it applies section 6 of the AC Act 2001 to the section 221 consideration to lead to the result where the Corporation specifically excludes PAYE schedular payments from the levy process.
Essentially the Corporation has taken it upon itself to dictate the levy process that forms part of the core component of the Accident Compensation Scheme. The first major issue is that the Corporation has in fact exceeded its legal powers in doing so and so therefore has introduced an unlawful process into the system which has been advanced over the legal requirements of the legislation for the last thirteen years.
So here are the facts as they stand at this point. I am saying that the Corporation is required to levy PAYE schedular payments under section 221. The Corporation is saying that it interprets section 221 by applying section 6 and has decided that PAYE schedular payments are not subject to being levied.
This leads us to a very important question. Who has the power under legislation to make a determination as to what category of earner is levied? It is not the Accident Compensation Corporation but is in fact the Governor General.
329 Regulations relating to levies
(1) For the purposes of Part 6, the Governor-General may, on the recommendation of the Minister, by Order in Council, make regulations—
(f) prescribing classifications, and categories of earners, for levy purposes:
It is fact that the Accident Compensation Corporation is not the Governor General and the legislation clearly states that the Governor General is the party responsible for who counts as an earner and what category of earner shall apply. So when the Corporation applies its "process" it is essentially overriding the stated will of the legislators and usurping the role of Governor General.
When the specific powers that are provided to the Corporation are examined, the situation gets much worse for the Corporation. Section 6 of the AC Act 2001 provides all the meanings and definitions that apply to the AC Act 2001 EXCEPT when there is a context that is in place that provides its own legal process and this is the case when considering section 221 as section 221 does indeed contain its own legally described strictly interpreted process. That is an important point for later.
But at this point we are concerned with what power the Corporation has under law to determine how a levy process is applied under the legislation.
(1) In this Act, unless the context otherwise requires,—
Decision or Corporation’s decision includes all or any of the following decisions by the Corporation:
(f) a decision relating to the levy payable by a particular levy payer:
The evidence is clear. The Corporation has made a decision to not levy PAYE schedular payments and applied that outcome to an entire class of earner in the plural . Yet section 6 specifically and clearly confines the Corporation's decision making power to a particular levy payer in the singular. This all makes perfect sense as section 329 clearly states that is the Governor General who decides who is levied and what class of earner applies.
Section 329 limits the decision making that applies to the Governor General. The Corporation is clearly not the Governor General. Section 6 specifically excludes the Corporation from making decisions that apply to an entire class of earner by confining the Corporation to decisions that apply to a particular levy payer.
The evidence is undeniable. The Corporation has exceeded its powers under the legislation and has essentially usurped the role of the Governor General. On that basis all the "reasoning" advanced by the Corporation is unlawful (ultra vires). On that basis there is NO argument under law available to the Corporation and it is simply and clearly acting outside of the law.
To prove me wrong the Corporation must prove it can act in place over the Governor General and that it can make a "decision" that applies to an entire class of earner when the legislation specifically confines all Corporation levy considerations to a particular levy payer in the singular. It is simply not possible for the Corporation to achieve those requirements.
It is fact that the legislators have not given the Corporation the power to make decisions in the way it clearly has when it comes to this levy process. That is because it is not the Corporation's role to make such determinations and it is clearly aware of this when it suits as the evidence shows.
Regarding your question 11, while you are asking ACC to provide an opinion, we advise that it is not the role of ACC to determine the intent of accident compensation legislation. This is the role of Parliament, in considering Bills tabled by the Minister for ACC, who receives advice from the Ministry of Business, Innovation and Employment.
In the ongoing effort to evade liability on behalf of the Corporation, Government services clearly states that is not the Corporation's role to determine the intent of the legislation because that is an argument that suits it at that point. This position is at complete odds with the fact that the Corporation is doing exactly that when it provides its "interpretation" that it relies upon to unlawfully deprive thousands of self-employed earners of their lawful entitlements. The fact that these conflicting positions appear in the same document is especially indicative. OIA Document
The Corporation presents its "constructs" in place of the actual legislation while at the same time acknowledging it has no right to do so. A tangled web indeed.
This concludes the evidence that the Corporation has exceeded its powers under legislation and is therefore acting unlawfully. The next section covers the finer arguments that relate to the specific legislation in question, section 221 of the Accident Compensation Act 2001.