Are you on the right ACC scheme?

ACC Cover Plus Extra

ACC Cover Plus Extra (CPX)

ACC CoverPlus Extra is a disability insurance available to business owner and sole traders/contractors. it provides an agreed level of compensation if they suffer an accident and can’t work.

ACC Is Compulsory, But You Can Choose Your Scheme

ACC levies are compulsory for all business owners, self-employed or contractors. ACC provides accident only insurance, with the standard scheme being 'Cover Plus', which covers up to 80% of your last years taxable income if you are unable to work. Based on your last years accounts, would you be able to survive on 80% of your declared earnings?

CoverPlus Extra is often a great alternative, as it gives you certainty at claim time, with an agreed monthly amount. This can save you money on levies and allows for a personal income protection plan that is designed to fit your needs, covering medical or illness related issues instead of accidents only.

So What is ACC Cover Plus Extra?

Cover Plus Extra (CPX) is an agreed value income protection insurance, at a rate that you negotiate, that you can opt into instead of the standard ACC Cover Plus Scheme. This is only available to self employed people.

The benefit of this is that you know exactly what you will be paid if you are unable to work due to an injury/accident. ACC can be an expensive form of income cover, compared to private policies as you are not covered for illness or medical issues. CPX can be easily tailored to work with private insurance, saving you money and providing significantly better protection.

CPX is particularly suited if you...

Have fluctuating income (annually or seasonally)
Need more or less cover than your actual taxable income
Recently self-employed with no earnings history and want to know what you'll receive if you need to claim
Have private insurance and do not need as much ACC Coverage
Your business would continue generating income if you couldn’t work
You split your income with a partner or you offset your income to minimise tax.

Having ACC as your only source of income protection is risky. If you are off work due to an illness/medical issue, you will not be eligible for ACC benefits. Instead, you will be reliant on WINZ for your income, which may be significantly lower than your previous earnings.

Solutions For Self Employed People

There are few instances in which ACC CoverPlus Extra would not benefit business owners or sole traders, (plus, it is free to set up).

ACC CoverPlus Extra simply gives you more options, for instance, If you have (or are thinking of taking out) private income protection, you may be able to reduce your ACC cover in line with this to lower your levies. It is always important to talk to a financial adviser about this as you don't want to be caught short.

ACC CoverPlus vs ACC CoverPlus Extra?

By savings costs on your annual ACC Levies, this can be put towards a more comprehensive insurance package that will cover you in the event of illness OR injury.

ACC CoverPlus (Standard)

Invoiced based on your last year’s financial earnings
Pays 80% of your previous years earnings (conditions apply)
Affected if your business continues to generate income during your time off work
Will reduce as you return to work on a part time basis
You must prove loss of income, an extra stress when you are unable to work