What ACC WILL PAY FOR
Only a few people realise that there is more to ACC than the medical cover and helping you pay the bills if you have to take time off work because of an injury. Did you know that your ACC levies also provide accidental death cover? This means if you died in an accident, your family could get paid a small weekly amount by ACC for up to five years if their case gets approved. They could also get help paying for the funeral if they apply for the proper grants.
Let’s face it nobody likes the idea of their wife and kids struggling to pay the bills and losing the family home. So free money for the family is excellent, but the pay-out is capped, and they probably couldn’t survive easily off it. Don’t sweat it, though; there are other options you could use to make sure your family is protected. This article covers everything you need to know.
Which members of your family can get ACC compensation?
The payout is only given to your immediate dependents and is provided every week to help them survive after the sudden loss of income.
The ACC website describes ‘dependants’ as the following people:
- partners from marriage, civil or de-facto unions who lived together.
- partners who lived apart due to health, employment, or imprisonment reasons
- separated partners who were supported financially by the deceased
- natural children or children for whom the deceased acted as a parent, ie stepchildren
- anyone financially dependent on the deceased because of a mental or physical disability.
Source: http://www.acc.co.nz/making-a-claim/what-support-can-i-get/ECI0041 (17 February 2017)
Roughly how much money can they get?
If you died in an accident and the case got approved, the total payments given out would be equal to 80% of your income but would be spread out between the different family members/dependants. For example, if you earned $1000 a week, then ACC would pay out $800. Here is an outline of how the money will be split up between your family:
- Your partner (married or de facto) will receive 60% of the 80% that ACC pays out, e.g. of the $800 that will be given out, your partner will get up to $480.
- Children under 18 will each get up to 20% of the 80% that ACC pays out. If the children are under the age of 16, that money will be paid to their caregiver, e.g. of the $800 that will be given out, your kids will get up to $160.
- Children under 18 will not receive anything unless they are enrolled in full-time study. If they are studying, they will receive the same amount of money as the other children (until their studies end).
- Mentally or physically impaired dependants will also each receive up to 20% of the 80% that ACC pays out, e.g. of the $800 that will be given out, they will get up to $160.
How long will it take for ACC to start paying out?
The time it takes to start making payouts is different for each case. Basically, they can’t start processing payments until they’ve received proof of the deceased person’s earnings and other information like how the person died and if it was an accident. ACC will generally contact your family to let them know if their claim has been approved or declined. So your family may not receive financial support immediately after you die; they could also get no support at all if their application is declined. Long story short, we recommend ensuring you have private insurance to get them through the tough times.
ACC Funeral Grant
Funerals in NZ are seriously expensive, so your family can apply for a grant asking ACC to help pay for your funeral (but only if you die in an accident). Your family will need to fill in the right forms of the ACC website, and if the application is approved, the fees will be paid directly to the funeral director or the executor of your will when they proved ACC with an invoice for the expenses.
Private Insurance as a backup plan
ACC pay-outs are only given out if someone dies from an injury, not an illness, and they aren’t guaranteed; applications have to meet specific criteria. If pay-outs are given, they are limited and generally insufficient for a family to survive comfortably. So we recommend taking out private insurance to help your family survive. Options you could look at include life insurance, mortgage protection insurance and income protection insurance.
While you may be keen on the extra cost of private insurance, it covers illness, injury and unemployment (not just accidents like ACC). Better yet, by restructuring your ACC cover and switching to ACC Cover Plus Extra, you can lower your levies and put the money you save into private insurance so that you can rest easy that whatever happens to your family is sorted.
Important: All information on this site is of a general nature only. When you complete the assessment online, we will connect you with an advisor who can give you advice at no charge. All advisers who are authorised to use this site, for their marketing purposes, are authorised financial advisers who can advice you on ACC CPX and how it works. A full list of advisers and what they can advise on is listed here under our terms & conditions of this site usage.
