Most people in business do not realise that there is a choice of cover when it comes to ACC levies. 

Cover Plus 

Cover Plus is the default cover offered by ACC that you will initially be set up on once you file your first income tax return. It provides cover if you or your employees have an accident at work, and weekly compensation if you or your staff are injured and cannot work. 

If you employ staff,  you’re automatically covered under Workplace Cover when you become an employer. The amount you pay will be based on your gross wages amount. Workplace Cover provides subsidised medical care for employee-related injuries, and up to 80% of your employee’s salary is covered while they can’t work. 

If you’re self-employed, you’ll automatically be placed on Cover Plus. If you have an accident at work and can’t work, ACC will pay up to 80% of your taxable income from your most recently completed financial year and will help cover the cost of your treatment and rehabilitation. 

Cover Plus Extra 

This is an optional cover product that allows you to choose how much of your income you want covered if you have an accident and can’t work. It’s especially suited to: 

• People who may have a fluctuating income (either yearly or seasonally), because you’ll know exactly how much ACC weekly compensation you will receive if you have an accident and can’t work. 
• Those who want to choose how much is covered. For example, if you’re self-employed and the main breadwinner for your family, could your family survive on just 80% of your income if you were unable to work especially if your previous years income was lower than average? 
• And if you’re newly self-employed and have no earning history, this can give you assurances about how much will be covered. 

We highly recommend our clients consider upgrading to the Cover Plus Extra policy, because it can give you peace of mind. Your invoices will be predictable and calculated based on an agreed amount, and you’ll know exactly how much you’ll receive from your weekly compensation if you should have an accident. All-in-all it is a better policy of cover. 

With the Cover Plus Extra policy it is very important that you pay your ACC invoices on time and never miss an instalment because, if you don’t, your policy could be automatically cancelled. ACC advised that even if you are on a monthly payment plan and you have paid five instalments and missed the sixth instalment, they will cancel your policy, you will receive a full refund, but you will be left with no cover and will need to reapply. You have 30 days to pay once you’ve received your invoice. 

Read more about your ACC cover options here.  

Need help understanding your tax, GST, and ACC obligations? Get in touch with the team at Ōmokoroa Accounting, we can help.