What’s the Difference Between ACC Cover Plus & Cover Plus Extra?
Did you know you have a choice regarding the ACC package you sign up for as a self-employed Kiwi? Cover Plus (the default option) and Cover Plus Extra are popular. As a business owner, selecting which option suits you best is up to you.
There are a few key differences between these two packages that you need to be aware of, and by supplementing them with private insurance, you can save money and get better protection for your family.
What are the Main Differences Between the Two?
ACC Cover Plus (CP) decides what your levy will be based on your earnings from the previous year, combined with the level of daily risks you face at work. ACC Cover Plus Extra (CPX) decides your levy based on your risks at work and a negotiated rate of compensation that you will get if you take time off work because of an accident.
The main difference between the two ACC cover options is the compensation you will receive for lost earnings (and, therefore, the amount of the levies you have to pay). If there’s an accident and you need time off work, the default programme ACC Cover Plus will pay you out based on 80% of your previous year’s earnings, but they won’t process any payments until you provide proof of your income. This can be a significant issue if your accounts haven’t been processed yet, or if you are bedridden and unable to compile the evidence ACC requires.
ACC Cover Plus Extra will pay you 100% of the amount you negotiated with ACC when you set up your account, less the mandatory tax. There is no need to prove your earnings for the previous year, and ACC can begin paying you compensation as soon as your application is processed.
What do ACC Cover Plus and ACC Cover Plus Extra Have In Common?
For both options, financial assistance will only be provided in the event of an accident (illnesses cannot be claimed). ACC will provide financial support for your medical treatments and rehabilitation costs in the event of an injury.
If you were to die due to an accident, ACC can provide your family and dependents with weekly financial support. The support is calculated at 80% of your previous year’s earnings and spread out across the various approved family members. Also, if you died due to an accident, your family can apply for a grant, where ACC can help them pay for the costs of your funeral.
How Can I Save Money & Get More Cover?
It’s possible to game the system by mixing Government ACC coverage with private insurance and walk away with cheaper risk protection that covers you for more than just accidents.
All you do is talk to a registered financial advisor about how to gear your ACC Cover Plus Extra to pay lower levies in return for a lower compensation rate if you have an accident. Then you can take the money you’ve saved and take out private insurance to protect you from illness, injury and/or a loss of income. It can save you money and give you peace of mind that whatever happens, 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.
