They Are Not Alternatives
The most common misunderstanding about ACC is that a lump sum and weekly compensation are a choice between two options. They are not. They answer different questions:
- Weekly compensation replaces lost income. It asks: can you work, and if not, how much income did you lose?
- Lump sum compensation (Permanent Injury Compensation) compensates permanent loss of bodily function. It asks: how much function have you permanently lost, measured as a percentage of whole-person impairment?
You can receive both, and receiving one does not reduce the other. ACC explicitly states that other financial support from the scheme does not affect lump sum payments.
Side-by-Side Comparison
| Feature | Weekly compensation | Lump sum (PIC) |
|---|---|---|
| What it replaces | Lost income while you cannot work | Permanent loss of bodily function |
| Core test | Incapacity for work, certified by a medical practitioner | Whole-person impairment of at least 10%, assessed once stable |
| Amount | Up to 80% of pre-injury earnings; $766.40 minimum / ~$2,410 maximum per week gross (2026/27) | Table-based: $4,575.78 at 10% impairment, up to $183,030.60 at 80%+ (1 July 2026 – 30 June 2027) |
| Form of payment | Weekly, while you remain incapacitated | One-off, or ongoing payments four times a year |
| Tax | Taxable; tax and deductions applied | Tax-free |
| When it starts | Day 8 for most claims; employer covers the first week of a work injury | Generally assessed about two years after injury, once stable |
| What ends it | Return to full duties, lapsed medical certificate, or a vocational independence finding | Nothing — it is a one-off. Ongoing payments stop if reassessment drops below threshold |
Working Through a Realistic Scenario
Take a builder on $85,000 a year who suffers a serious shoulder injury in a fall at work and cannot return to heavy lifting.
- Weeks 1–4: Employer pays 80% of usual pay for the first week (about $1,308 gross). ACC then pays the short-term rate based on the four weeks before injury.
- Weeks 5 onward: The long-term rate applies — total income divided by weeks worked, at 80%.
- Vocational rehabilitation: ACC funds Stay at Work or Back to Work services. If no heavy role is medically possible, retraining may be funded.
- Around two years: The shoulder is stable. An AMA assessment rates it, say, 18% whole-person impairment. Under the 1 July 2026 table that is $10,165.54 tax-free, on top of everything received so far.
Note what the lump sum did not do. It did not compensate for the lost career, the chronic pain, or the difference between a builder's income and a lighter job's income — only the measured loss of function. That gap is the single biggest source of dissatisfaction with the scheme, and it is structural rather than a mistake in any individual case.
Why the Timing Differs So Much
Weekly compensation can start within days; a lump sum typically takes about two years. The reason is that impairment cannot be rated until the injury is permanent and stable — and rating a shoulder that might still improve, or worsen, produces a figure nobody can rely on. ACC can reassess, and you can re-apply once every twelve months if a lifelong injury worsens or you suffer a new injury.
Because the table is index-adjusted each July, an assessment decision made just after 1 July is paid at the new rates. That is a genuine, if modest, consideration — but it should never override clinical advice about when an injury has stabilised.
Practical Takeaways
- Never trade one for the other. If someone suggests accepting a lump sum in exchange for giving up weekly compensation, get independent advice.
- Keep the income side documented. Weekly compensation disputes are usually earnings-data disputes, so keep payslips and IRD summaries.
- Keep the function side documented too. For the lump sum, contemporaneous notes of what you cannot physically do are more useful than a retrospective description.
- Remember the free support. Community Law Centres offer free initial ACC advice, and advocates can manage both a weekly compensation review and a lump sum assessment dispute.
Frequently Asked Questions
Can I get both an ACC lump sum and weekly compensation?
Yes. They are separate entitlements answering different questions — weekly compensation replaces lost income while you cannot work, and lump sum compensation (Permanent Injury Compensation) compensates permanent loss of bodily function. Receiving one does not reduce the other.
Is ACC lump sum compensation tax-free?
Yes. Lump sum compensation for permanent impairment is paid tax-free and does not affect other ACC financial support you receive. Weekly compensation, by contrast, is taxable and has tax and deductions applied.
Why does an ACC lump sum take about two years?
Impairment cannot be rated until the injury is permanent and stable. ACC generally assesses about two years after the injury, and can reassess later. You may re-apply if a lifelong injury worsens or you suffer a new injury, once every twelve months.
What is the minimum ACC lump sum in 2026/27?
The threshold is a 10% whole-person impairment, which pays $4,575.78 under the schedule valid from 1 July 2026 to 30 June 2027. Impairments of 80% or higher receive the maximum of $183,030.60.