Self employed or contractors have two options when it comes to ACC. The standard CoverPlus or CoverPlus Extra. You will be automatically be on the standard Coverplus however you can change to the CoverPlus Extra which allows you to choose how much of your income will be covered. If you have an injury that is covered by ACC they will pay compensation based on your cover level and nominated level of cover.
You can choose your compensation cover level to be full compensation, and ACC will pay 100% of the agreed amount of cover less tax divided into weekly payments, until you are able to return to full-time work. If you earn $100,000 per year, 100% of that is $1,923.07 per week before tax.
You can choose to have a lower level of cover and this means your levies will be cheaper. If you are injured and unable to work, your compensation will decrease gradually as you return to work until you are working 30 hours per week.
When choosing a level of cover you can apply to cover any amount between $29,453 and $104,729. If you are unsure how much to cover you can call or email ACC to discuss or speak to a third party. ACC also has a CoverPlus Extra Calculator where you can calculate levies based on income and Bic code.
CoverPlus extra is a good option for the following non-PAYE shareholder employees and self-employed:
If you work part time and earn over the ACC CoverPlus Extra minimum (which can change annually) or work over 30 hours per week
If your income fluctuates
If you a starting a new business and don’t have an income history
If your business can continue to generate income even if you are injured and cannot work
If you want to apply for more or less cover than your actual income
To see how CoverPlus Extra compares with the standard coverplus a comparison is available here.
Benfits of CoverPlus Extra include
More control over how much you pay for levies
Your invoice is a predictable amount as it is based on the amount you have nominated and your BIC code
CoverPlus Extra covers injuries that aren’t sustained at work just like the standard cover
You can apply for coverplus extra online via this form. Once ACC has processed your application they will send you a policy acceptance form which you will need to sign and return. The date that the signed policy is received by ACC is the date that the policy will start and then you will be sent an invoice. You will receive an invoice at the beginning of the policy and then each year when it is renewed, you will pay for the year ahead.
Once you have filed your income tax return for the year and IRD updates ACC with your actual income you will be sent a separate invoice for your Working Safer Levy. This is outside the agreed level of cover which is the reason for the separate invoice. This is a flat rate and you can read about this in Mondays article on ACC Levies.
If you start your CoverPlus Extra partway through a financial year you will still be covered by the standard coverplus up until your policy starts. The standard cover will be based on what is filed with IRD and your earnings will be adjusted to calculate the standard levy portion of the year.
