The Accident Compensation Corporation (ACC) provides compulsory insurance cover for personal injury for everyone in New Zealand, whether a citizen, resident or visitor.
This means if you are injured by an accident in New Zealand, ACC may pay some of your medical and rehabilitation costs. I have not focused on other disability benefits available as the benefits are so small.
Plan Types
All plans with ACC are designed to provide ongoing income to you, your partner/spouse or your dependents in the event of a disability caused only by accident or injury preventing you from being able to work or passing away due to an accident. Note, they do not cover you for degeneration or illness.
CoverPlus
These plans are the default plans ACC will a lot for self-employed people choosing to pay themselves a shareholder drawing and not PAYE as their taxable income.
These ACC plans are most suitable for low income earning contractors, small business owners and self-employed.
They are indemnity plans. This means you have to prove your earnings when you go to claim which can significantly increase your time waiting for the benefit.
These plans pay you 80% of your provable taxable income while on claim.
More Information | Click here.
CoverPlus Extra (CPX)
This ACC plan is suitable for a average and higher income earning contractors, small business owners and self-employed.
This plan is agreed value, unlike CoverPlus. This means you don't have to prove your earnings when you go to claim which can significantly reduce your time waiting for the benefit.
CoverPlus Extra pays 100% of the benefit you've requested.
More Information | Click here.
Cover Plus and CoverPlus extra comparisons here.
Workplace Cover
These plans are the default plans for employees or business owners paying themselves a PAYE salary.
Employees or PAYE earners are assigned the Workplace Cover plan.
They are indemnity plans. This means you have to prove your earnings when you go to claim which can significantly increase your time waiting for the benefit.
These plans pay you 80% of your provable taxable income while on claim.
More Information | Click here.
Benefits
Weekly Compensation
Wait Period | The benefit would start after the wait period of 7 days and pays in arrears.
Benefit Period | The cover would pay until age 65.
Taxable | ACC levies are tax deductible and gst assessable. Please note that the above is not given as taxation advice and you should seek professional advice from an accountant, tax specialist, or Inland Revenue.
More Information | Click here.
Fatal Entitlement
The fatal entitlement benefit is designed to provide on-going cash-flow/income to your spouse/partner and dependents in the event you pass away due to an accident.
More Information | Click here.
How Restructuring Your ACC Plan Works
Click here to watch the 4 minute video presentation below which will help you understand the basics of ACC options as a self-employed business owner.