The Ultimate Guide to ACC When Hiring a Nanny in New Zealand

Life was busy enough before the kids came along. Ever since, the pressure on your time has felt at breaking point- until now, that is.

Big news: you’ve found a new nanny who ticks every box and you can’t wait for them to start. Together, you’ve agreed on the terms and salary. It’s now just a case of figuring out the logistics of nanny payroll.

Read on to find out about your obligations as an employer, specifically those related to ACC. We’ll also show you how to avoid the hassle that comes with hiring your new number one sidekick. 

Paying ACC Is One of Your Mandatory Obligations

When you hire a nanny in New Zealand, you’ll have a list of responsibilities as long as your arm. That list does not end after you’ve paid your nanny properly and on time.

There’s a written contract to sort out along with overtime, leave, sick pay as well as Public Holidays to keep on top of. And, there are likely to be KiwiSaver and compulsory ACC (Accident Compensation Commission) levies to make too.

You definitely need your new deputy but, frankly, you could do without all the admin. There is one very simple solution and that’s to outsource all your nanny payroll issues to Pay The Nanny- more on that later. First up, the lowdown on ACC for nannies and household workers.

What is ACC?

As an employer, you have a duty of care to your nanny. That means ensuring that they’re safe in your home and that there is protection in place in case of an accident.

ACC provides a no-fault programme that covers everyone in New Zealand. That includes ACC for household workers. (We often now use the term ACC in a general sense to refer to the entire scheme as well as the compensation a person might get under it).

No-fault cover means it doesn't make any difference what a person, such as your nanny, was doing when they got injured or who was at fault.

Physical injuries include anything from sprains, strains and burns to dental injuries and hearing loss. As you’d expect, there are lots of exclusions such as illness and conditions the result of ageing or emotional distress.

ACC and WorkSafe: What’s the Difference?

ACC’s main function is to assess and pay out on accidents. WorkSafe is the regulator of health and safety in the workplace. Both organisations offer help and support in getting people back to work after accidents. Their aim is also to try to reduce the frequency and severity of accidents at work or wherever they happen.

Who Pays for ACC and How Much Does It Cost?

As an employer, you’ll pay 2 levies towards ACC for household workers who are your employees. These are separate from other general taxes. We refer to them specifically as the:

• Work levy
• Working Safer levy

The Work Levy

This covers the cost of injuries caused by an accident, helping to protect you and your nanny. The work levy rate varies depending on the type of business you are in.

The Working Safer Levy

ACC collects this on behalf of WorkSafe New Zealand. Your cash will go towards supporting WorkSafe’s activities and injury prevention across the country.

The Cost

As a general rule, you should set aside 1.5 percent of your nanny’s gross pay to cover the cost of ACC for a household worker. If you do not pay ACC you could be liable for significant penalties.

How Do I Make an ACC Claim?

The person injured should first get treatment from a medical professional. The treatment provider will fill out the correct forms and make a claim to ACC on the injured person’s behalf.

If ACC covers the injury, it will pay part of the health provider’s appointment fees. The person injured will have to pay the remainder. The ACC lays all this out in its cost of treatment regulations.

If ACC covers a claim, it will send the injured person a text to let them know. It may also send a letter. As well as financial support if a person is unable to work, ACC can pay for transport to get them to work and appointments or help them in the home and with childcare.

ACC Claim Contact Details

Phone: 0800 101 996 (Monday to Friday, 0700-1900)

Email: [email protected]

How Does ACC Work in Practice?

There will be differences between some of the processes involved with ACC. These will depend on where an injury took place ie: at work or away from the workplace.

ACC offers a personalised online service known as MyACC to support those injured. It allows them to:

• Access their claim details
• Get hold of equipment like knee scooters or crutches
• Get reimbursement for prescriptions
• Ask for help from their ACC recovery team

In some circumstances, a person such as a nanny with non-complicated injuries may be able to manage their own recovery online. Although ACC might not contact you directly, you should still work closely with your nanny on their journey to full recovery.

However complex the claim, you’ll need to support your nanny back to work after an injury. The quicker an injured person gets back to work, the better it typically is for their well-being and recovery.

More often than not, employees (nannies and other household workers included) will be able to perform some work when they’re injured. Very occasionally a doctor will issue a medical certificate stating an employee is completely unfit for work. This might happen if they get admitted to hospital or are unable to travel to and from your home.

What Happens if an Employee Suffers an Injury in My Home?

If your nanny’s injury happened while they were working in your home, here are a few things to consider:

• Make contact with ACC for help
• There may be legal requirements for you to contact WorkSafe
• Make a written record of the accident details

ACC is there to work with you to carry out any necessary investigation or fix. You should also discuss these points with your nanny:

• Ensure they get treatment as soon as possible
• Find out from them how the injury happened
• Make sure they discuss any claim with their health provider
• Ask them for a copy of their claim form and/or medical certificate

If the injury is serious, you’ll also need to ensure that your nanny gets a medical certificate from their doctor. This should outline the kind of work and the hours they can do while recovering.

You might also need to discuss how you and ACC might be able to help them. This might relate to getting to and from work, or giving them a salary while they're off work, for example.

Home or Away From Home?

If your nanny needs to take time off work and ACC covers their injury, it will pay 80 percent of your nanny’s income after the first week. You might have to cover the first week. This will depend on where your nanny suffered their injury.

1.  In Your Home

You will have to pay them for the first calendar week or part week at 80 percent of what they would have earned. You can also agree with your employee on the use of one sick or annual leave day each week. This would be to supplement the first week after a work-related accident or any further weeks paid by ACC for household workers.

2.  Away From Your Home

Your nanny can use any sick leave they have for the first week. If they don't have any sick leave left, you could see if your employee will take the time off as annual leave.

It’s possible that your nanny may be unable to come back to work due to their injury. If they have an ACC medical certificate signing them off work due to the injury, they can apply for weekly compensation assistance.

ACC will continue to pay 80 percent of their income as weekly compensation. It’s your employee's responsibility to keep you informed of their injury and their situation.

How Does ACC Work with Pay The Nanny?

Sorting out the consequences of an accident in terms of pay and leave can be tricky.

There is a simple solution to paying ACC levies and to dealing with the tangle of paid and unpaid hours that can result from your nanny having to make an ACC claim. That is to outsource the admin to a nanny payroll service like Pay The Nanny.

For every payroll that we process, Pay The Nanny calculates the right amount that needs to get paid to the IRD. We’ll also charge you an ACC levy calculated at 1.5 percent of your nanny’s gross pay. This levy includes our ACC processing fee so there will be nothing extra to pay ACC later.

We will add all this to the total salary figure for the particular pay cycle. The final figure will get taken from your nominated account by direct debit. When you receive your annual ACC invoice, Pay The Nanny will pay it directly on your behalf. Job done.

Leave It to Pay The Nanny

We know how stressful the demands on today’s busy parents can be. Dealing with payroll issues, including KiwiSaver and ACC for nannies or household workers, can feel like one step too far. For Pay The Nanny they are second nature.

Talk to us today about how we can sort out all your nanny payroll demands. We’ll keep you compliant every step of the way