Permanent impairment compensation

If your permanent impairment's linked to qualifying service after 31 March 1974 (outside Viet Nam), you may be able to access this compensation. Depending on when your injury or illness happened, it's paid as:

  • Independence Allowance; or
  • Lump Sum for Permanent Impairment.


Entitlement to payment

To qualify, the condition causing your impairment must be all the following:

Entitlement to financial advice

If you get at least $15,000 in Lump Sum for Permanent Impairment, you can also get funding for advice from an authorised financial adviser. We’ll pay up to $1,500 towards this.


Application form (Scheme Two permanent impairment compensation) [PDF, 391 KB] sets out the information & evidence we need.

Getting paid

Type of payment depends on when your injury or illness occurred: 

  • Independence Allowance—if injury or illness occurred before 1 April 2002
  • Lump Sum for Permanent Impairment—if injury or illness occurred on or after 1 April 2002.

Payment of Independence Allowance (as periodic payment)

Independence Allowance is paid fortnightly within New Zealand; 4-weekly overseas.

Payment of Independence Allowance (as upfront payment)

For any 12-month period, you can choose to get your Independence Allowance as one payment:

  • made upfront; but
  • paying slightly less than 12-months worth of periodic payments (reflects the financial advantages of getting payment upfront).

Payment of Lump Sum for Permanent Impairment

Lump Sum for Permanent Impairment is made as a one-off payment.

Payment amounts

Amount paid depends on:

  • type of impairment compensation you qualify for; and
  • severity of your qualifying conditions (based on whole-person impairment).

We determine whole-person impairment using the American Medical Association Guides to the Evaluation of Permanent Impairment (4th Edition). You can ask for reassessment once a year, if you think the level of impairment caused by an accepted condition has changed.

Effects of tax & ACC

Permanent impairment compensation isn’t taxed within New Zealand.

If impairment compensation for your service-related condition is paid by ACC rather than us, we’ll pay a top-up.

Finding out more

One-page summary

Related information

Relevant legislation