Why ACC CoverPlus Extra is a smarter option for business owners
If you’re self-employed or operate your own business, chances are you pay your ACC levies without giving them much thought. After all, ACC just “comes with the territory”, right? What many business owners don’t realise, however, is that they often have more choice – and more control – over their ACC cover than they think.
By default, self-employed people, business partners and non-PAYE shareholder employees are placed on standard ACC CoverPlus or WorkPlace Cover. This provides accident-only protection and can replace up to 80% of earnings if you’re unable to work due to injury. Importantly, it does not cover illness, which is the most common cause of long-term work incapacity.
ACC Levies, the better option for business owners
There is a far superior ACC alternative called ACC CoverPlus Extra, which for many business owners is a far better fit. Instead of ACC basing compensation on past earnings and requiring proof of actual income loss, CoverPlus Extra allows you to agree in advance on a set level of weekly income compensation. If an injury prevents you from working, ACC pays 100% of that agreed amount (net of tax), along with treatment and rehabilitation costs.
CoverPlus Extra has several key advantages. Claims are simpler because there is no need to prove an actual loss of earnings – particularly important for self-employed people with variable or seasonal income. The agreed weekly amount continues to be paid in full, even if you return to work part-time during rehabilitation. By choosing a lower agreed income compensation level (within ACC rules), many business owners can significantly reduce their ACC levies, freeing up cash flow for more comprehensive protection elsewhere.
Why ACC CoverPlus Extra is superior for business owners was highlighted in a recent discussion I had with the owner of a residential painting business. Several years ago, he had been incapacitated and unable to work for a period of time. Naturally, he lodged a claim for ACC income compensation under his “standard” ACC cover. The claim was not accepted!
Why?
The default ACC cover required him to provide proof of income loss. Although he was unable to work, he was still able to draw some income from the business to support himself and his family. ACC claimed that, as there was no loss of income, they rejected the painter’s income compensation claim.
If he had been on ACC CoverPlus Extra, which does not require proof of income loss, he would have received his agreed value income compensation until he was fully rehabilitated and able to re-commence work.
ACC is simply expensive accident insurance.
The real value comes from optimising it and integrating it into a well-structured personal and business protection plan.
If you’d like to understand whether ACC CoverPlus Extra could work for you, I’m always happy to have a no-obligation chat.
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Theo Simeonidis
UProtectNZ Insurance Services