ACC Lump Sum Payments for Permanent Impairment

What is an ACC Lump Sum Payment?

If you suffer a permanent impairment as a result of a covered ACC injury, you may be entitled to a lump sum payment. This is a one-off, tax-free payment intended to compensate for the loss of bodily function or disfigurement. It is separate from weekly compensation and treatment costs.

Who is Eligible?

You may be eligible for a lump sum payment if:

• Your injury is covered by ACC
• You have a permanent impairment assessed at 10% or more of whole-person impairment
• Your injury occurred on or after 1 April 2002 (injuries before that date use a different, older system based on "physical loss of function" under the old Accident Insurance Act)
• Your condition has stabilised (you've reached "maximum medical improvement")

How the Lump Sum is Calculated

The lump sum is based on a percentage of a statutory amount, scaled by your assessed whole-person impairment (WPI):

• Base amount (2024/25): $155,656 (indexed annually to the Consumer Price Index)
• For 10% WPI: You receive 10% of the base amount = approximately $15,565
• For 100% WPI: You receive 100% of the base amount = approximately $155,656

Impairment is assessed using the AMA Guides to the Evaluation of Permanent Impairment (American Medical Association), and the assessment is done by an ACC-approved assessor.

How to Apply

1. Discuss with your GP or specialist whether you may have a permanent impairment.
2. Contact ACC and request an assessment for permanent impairment.
3. ACC appoints an independent assessor (usually a specialist doctor) to evaluate your impairment using the AMA Guides.
4. The assessor provides a report with a Whole Person Impairment (WPI) percentage.
5. ACC makes a decision: if WPI ≥ 10%, you receive a lump sum.
6. If you disagree with the assessment, you can request a review or a second opinion.

Taxation

Lump sum payments for permanent impairment are tax-free. You do not need to declare them on your tax return.

Interaction with Other Entitlements

Receiving a lump sum does not affect your weekly compensation or your entitlement to ongoing medical treatment. It is a separate compensation for the permanent impact of the injury.

What if You Were Injured Before 1 April 2002?

For pre-2002 injuries, a different scheme applies. You may be entitled to an "Independence Allowance" (a small quarterly payment) under the old Accident Rehabilitation and Compensation Insurance Act 1992. The assessment uses a different impairment schedule.

The Base Amount and How It Moves

The lump sum is calculated as your assessed whole-person impairment (WPI) percentage applied to a statutory base amount that is indexed annually to the Consumer Price Index. For the 2024/25 year the base was $155,656, and it rises each year with inflation — for 2025/26 and 2026/27 the figure is higher again. The payment formula itself has tiers built in: the first 10% of impairment is compensated at a lower rate per percentage point, with each percentage point above 10% worth more. A 10% WPI currently pays roughly $15,000+, and the payment scales with the assessed percentage. Because the base is indexed, an assessment delayed by a year or two can produce a slightly larger payment — but do not delay treatment or assessment purely for this; the difference is small relative to the value of early rehabilitation.

What the AMA Guides Measure

Impairment assessment is not a medical opinion in the ordinary sense — it is a scoring exercise using the AMA Guides to the Evaluation of Permanent Impairment, applied by an ACC-approved assessor (usually a specialist doctor). The assessor scores how your injury affects body systems — musculoskeletal, neurological, sensory — and converts the findings into a whole-person percentage. Two people with the same diagnosis can receive different WPI scores depending on the specific loss of function, so the quality of the assessment matters enormously. You can request a second opinion if you believe the assessment understated your impairment, and you can challenge the result through the review process. Bring your own medical records and a clear description of your daily limitations to the assessment — the assessor can only score what they can see and measure.

Practical Notes

• Tax-free: lump sum payments for permanent impairment are not taxable income and do not affect your other ACC entitlements.
• Stability first: you must have reached maximum medical improvement — ACC generally waits until your condition has stabilised (often 12-24 months after injury).
• Pre-2002 injuries: the old scheme's Independence Allowance still applies to injuries before 1 April 2002 — different rules, same review rights.
• Interaction with weekly compensation: the lump sum is separate — receiving it does not stop or reduce weekly payments.
• Professional help: an ACC advocate or lawyer experienced in impairment assessments can materially improve your outcome.

The 2026/27 Lump Sum Table: Key Amounts

Lump sum compensation for permanent impairment is set out in a table that ACC republishes each year, with the current schedule valid from 1 July 2026 to 30 June 2027. Payments are tax-free, and any impairment rated at 80% or higher receives the single highest amount in the table.

Note how steeply the curve bends: moving from a 20% rating to a 50% rating multiplies the payment roughly five-fold. That is why the assessment, not the injury itself, is where lump sum claims are won and lost.

Reassessment and Re-application

Because impairment must first be permanent and stable, ACC generally assesses about two years after the injury — sometimes later for conditions that keep evolving. Two doors stay open after that:

• Re-application is possible if your lifelong injury worsens or you suffer a new injury. You may apply again once every twelve months using the same process.
• Reassessment can be requested by ACC or your GP if either thinks your injury has changed. If the reassessment puts you below the threshold, ongoing payments stop.

If you receive an ongoing payment rather than a one-off, it is paid four times a year. If you move overseas you can keep receiving it, but you must maintain a New Zealand bank account.

How the Assessment Itself Works

ACC refers you to an external assessor trained in the American Medical Association (AMA) Guides method, organises and pays for the appointment, and passes over your treatment history in advance. You can take a support person. The assessor measures loss of physical or mental bodily function — not pain, not lost earnings, and not disability in the everyday sense, which is the single most common source of disappointment with the scheme. A person in constant pain who can still physically move a limb may score low; both those facts can be true at once. If the resulting figure looks wrong to your treating specialist, that is precisely the kind of disagreement a review is designed to resolve.