ACC normally compensates for 80% of lost earnings in the event you’re unable to work due to an injury.
In effect, ACC levies are a form of compulsory insurance.
Beyond the standard ACC Cover Plus, the government offers ACC Cover Plus Extra for self employed people who average 30 hours per week and do not receive PAYE, which will compensate your lost earnings on a pre-agreed amount. This allows flexibility to reduce your cover and to save money, or increase your cover if you need more.
Cover Plus Extra has a number of advantages compared to Cover Plus.
Because you’re paid a pre-agreed amount, you won’t be required to prove your loss in order to make a claim, which can be time-consuming and difficult.
You have flexibility in choosing how much compensation you want, ranging between 40 and 120%. Your business may still generate income while you’re injured so you could choose a lower level of payment. This would allow you to use the savings for private income protection to cover for illness as well as accident. Or if you split your income to reduce taxable income, to increase your ACC cover.
It’s important to be aware of potential gaps in the ACC coverage. Both ACC Cover Plus and Cover Plus Extra include some life insurance for death by accident. If you chose Cover Plus Extra to reduce your ACC levies, you will also reduce your life insurance entitlement. With private insurance, you can lower your ACC levies while ensuring the gaps are covered, protecting your home and family while you’re unable to work.
Contact us to find out how much you can save on ACC levies while still enjoying peace of mind.