Self-Employed ACC
The numerous changes to ACC over the last few years have left most people feeling somewhat overwhelmed by all the glossy brochures, not to mention the invoices!
However, there has been a significant change which all self-employed should be aware of, that is the introduction of a second option in self-employed accident cover.
Self-employed people can now choose cover under either ACC CoverPlus or ACC CoverPlus Extra.
ACC CoverPlus :
- standard cover, with premiums and compensation based on prior years earnings. Self-employed people are automatically covered under this option, unless they opt for CoverPlus Extra.
- ACC CoverPlus Extra : a more flexible option which allows the self-employed person to choose their own level of cover. This is negotiated with ACC on application, and then becomes a guaranteed level of cover. Unlike CoverPlus, compensation is not subject to proof of loss of earnings, and is not adjusted for any continuing business income. Premiums are based on the level of cover.
We recommend all self-employed people consider CoverPlus Extra, particularly those with fluctuating incomes, or who would continue to receive business income in the event of injury.
A timely example, where CoverPlus Extra would be particularly beneficial, is the case of a typical self-employed farming couple. Like most in the industry, 2004 was an excellent year, and consequently, they are paying ACC levies, under the standard cover (CoverPlus), based on the maximum earnings of $84,636. In the event, one of them was injured, they would most likely employ a farm worker at a cost of say, $35,000, who would therefore maintain their business income. ACC, upon proof of loss, would pay 80% of the $84,636, being last year’s liable earnings, but this would be adjusted for the continuing business profits. In effect, the $35,000 paid to the employee is the only loss of earnings, therefore, this is the maximum compensation which would be paid by ACC.
Under CoverPlus Extra, this couple could elect for cover of $35,000, and make significant savings in ACC premiums.
Please contact Linda Gray if you would like further information.
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