Page 54 - English-DBINZ brochure-2019

51 Doing business in New Zealand

ACCIDENT COMPENSATION

New Zealand’s law relating to personal injury is unique. Legal claims for compensation arising from
personal injury are prohibited (other than for exemplary damages). Instead, a statutory scheme provides
no-fault personal injury cover for all New Zealand citizens, residents and temporary visitors to New
Zealand - whether injury occurs in the workplace or elsewhere.
The scheme is governed by the Accident Compensation Act 2001 and has various funding sources,
including levies on employers and employees.
The Accident Compensation Act covers the majority of personal physical injuries, whether resulting from
negligence or accident, and whether occurring in the workplace or elsewhere. It also covers a limited
range of mental injuries. Employers are required to contribute to the scheme by payment of levies. The
amount of these levies is determined by the risk classification of the employer’s business a, how much
staff are paid and the type of cover. For work-related personal injuries that are covered by the Accident
Compensation Act, employers are also required to pay 80% of the earnings lost by that employee during
their first week of incapacity.
Compensation available under the scheme includes coverage of treatment and rehabilitation costs,
payments for loss of earnings, independence allowances, funeral expenses and death benefits for
dependants.

Superannuation and pensions

GOVERNMENT SUPERANNUATION
Financial superannuation assistance is available in New Zealand for people who meet certain criteria. To
receive superannuation, a person must:
ə Be 65 years of age or over

ə Be a New Zealand citizen or permanent resident
ə Have lived in New Zealand for a certain amount of time
ə Normally live in New Zealand when the application is made.

PRIVATE SUPERANNUATION
There are many voluntary retirement savings schemes operating in New Zealand that are designed to
assist people to put money aside for their retirement and to supplement the superannuation assistance
provided by the Government. Private schemes must be set up under a trust deed, keep proper accounts
that are audited annually, and should be registered with the FMA.

KIWISAVER

A voluntary retirement savings scheme, KiwiSaver, came into force on 1 July 2007. Employees are
automatically enrolled in KiwiSaver when they start a new job, and may opt-out between two and eight
weeks after starting work (but not after that time). Employees in existing jobs may also elect to join
KiwiSaver at any time.
Employees can choose to make the minimum contribution of 3%, or contribute at 4% or 8% of their
income if they wish. When an employee has opted into KiwiSaver, an employer is required to make
KiwiSaver deductions from that employee’s wages and forward them to the Inland Revenue Department
in much the same way as PAYE. Employers must also pay compulsory employer contributions of at least
3% of the employee’s gross salary or wages.