ACC COVER PLUS EXTRA

For contractors or self-employed people in New Zealand, there are two different ACC contracts available. ACC CoverPlus is the default contract. ACC CoverPlus Extra is an optional ACC product designed for business owners that replaces your default ACC CoverPlus contract.

ACC COVER PLUS EXTRA


ACC COVER PLUS EXTRA

Switching to ACC CoverPlus Extra allows you to negotiate a set amount (or agreed-value) of cover for accident compensation. Often we can set a lower level of agreed-value accident compensation and reduce a client’s overall costs even after putting Income Protection Insurance into place. This Income Protection Insurance provides certainty of what you will receive should you be unable to work. It covers both injury AND illness and pays a monthly cash benefit.

For contractors or self-employed people in New Zealand, there are two different ACC contracts available. ACC CoverPlus is the default contract. ACC CoverPlus Extra is an optional ACC product designed for business owners that replaces your default ACC CoverPlus contract.

Switching to ACC CoverPlus Extra allows you to negotiate a set amount (or agreed-value) of cover for accident compensation. Often we can set a lower level of agreed-value accident compensation and reduce a client’s overall costs even after putting Income Protection Insurance into place. This Income Protection Insurance provides certainty of what you will receive should you be unable to work. It covers both injury AND illness and pays a monthly cash benefit.

HOW IT WORKS

A builder with a net profit of $65,000 for the previous year, would have to pay $2,497 each year under the default ACC CoverPlus structure.

Under the proposed ACC CoverPlus Extra structure, the level of ACC cover is reduced to the minimum ($25,376 per annum) and Income Protection Insurance is put into place ($40,625 per annum). This structure provides cover for not only Accidents but also illness and sickness and results in cost savings of $379!

DEFAULT STRUCTURE = $2,497
PROPOSED STRUCTURE = $2,118

SAVINGS
= $379

HOW IT WORKS

A builder with a net profit of $65,000 for the previous year, would have to pay $2,497 each year under the default ACC CoverPlus structure.

Under the proposed ACC CoverPlus Extra structure, the level of ACC cover is reduced to the minimum ($25,376 per annum) and Income Protection Insurance is put into place ($40,625 per annum). This structure provides cover for not only Accidents but also illness and sickness and results in cost savings of $379!

DEFAULT STRUCTURE = $2,497
PROPOSED STRUCTURE = $2,118

SAVINGS
= $379

HOW IT WORKS

A builder with a net profit of $65,000 for the previous year, would have to pay $2,497 each year under the default ACC CoverPlus structure.

Under the proposed ACC CoverPlus Extra structure, the level of ACC cover is reduced to the minimum ($25,376 per annum) and Income Protection Insurance is put into place ($40,625 per annum). This structure provides cover for not only Accidents but also illness and sickness and results in cost savings of $379!

DEFAULT STRUCTURE
= $2,497

PROPOSED STRUCTURE
= $2,118

SAVINGS
= $379

As a business owner on the default ACC CoverPlus contract, there is a lot of uncertainty surrounding what you are covered for and what benefit you are likely to receive in the event of a claim

  • ACC only covers for accidents. It doesn’t cover for sicknesses or illnesses which prevent you from being able to work
  • You may split your income (for tax purposes) with your spouse or partner meaning that the benefit paid is significantly lower than the benefit you’re entitled to
  • The benefit amount you are entitled to receive may not be representative of 80% of your actual earnings (as you may have a creative accountant)
  • There can be uncertainty of benefit level at claim time as compensation payments are made based upon the last 52 weeks or previous tax year’s net profit. This means that if your income fluctuates due to a bad year (eg. the 2008 Global Financial Crisis), you will only receive claim payments based on 80% of that previous year’s earnings and will be expected to live and survive off this in the long-term
  • You have to prove a loss of earnings (which may be an issue if your staff pick up your slack whilst away from work)
  • ACC will only compensate you up to $101,028, meaning that if your net profit is more than $126,285, you may end up out of pocket
  • ACC often declines claims due to the most likely cause of the injury being “age-related degeneration”, in other words – wear and tear, deeming it a non-occupational gradual process injury

As a business owner on the default ACC CoverPlus contract, there is a lot of uncertainty surrounding what you are covered for and what benefit you are likely to receive in the event of a claim

  • ACC only covers for accidents. It doesn’t cover for sicknesses or illnesses which prevent you from being able to work
  • You may split your income (for tax purposes) with your spouse or partner meaning that the benefit paid is significantly lower than the benefit you’re entitled to
  • The benefit amount you are entitled to receive may not be representative of 80% of your actual earnings (as you may have a creative accountant)
  • There can be uncertainty of benefit level at claim time as compensation payments are made based upon the last 52 weeks or previous tax year’s net profit. This means that if your income fluctuates due to a bad year (eg. the 2008 Global Financial Crisis), you will only receive claim payments based on 80% of that previous year’s earnings and will be expected to live and survive off this in the long-term
  • You have to prove a loss of earnings (which may be an issue if your staff pick up your slack whilst away from work)
  • ACC will only compensate you up to $101,028, meaning that if your net profit is more than $126,285, you may end up out of pocket
  • ACC often declines claims due to the most likely cause of the injury being “age-related degeneration”, in other words – wear and tear, deeming it a non-occupational gradual process injury
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