As a self-employed person I pay ACC every year. And like you I hate it!
I’ve also been on the receiving end of ACC before, I dislocated my shoulder diving for a try playing touch! It turns out being a Soccer player for many years doesn’t agree with my diving skills!
So what is ACC? It is basically Accident only Insurance… more specifically it acts just like Medical Insurance and Income Protection Insurance does, but again just for accidents.
So off I go to the local A&E to get my shoulder popped back in followed by an X-Ray. Did you know X-Ray’s actually cost between $50-$350? Of course ACC normally picks up the majority of this cost so luckily I just have to pay $30.
Also for the next 4 weeks I get some Physio work done which is also Subsidised by ACC. So instead of these sessions costing me $70 it’s just $25.
So what I’ve just described is the medical Insurance component of ACC working very nicely.
For me there was no loss of income so all was well, but I’m sure if I were a tradie or had a physical job then it would have meant a month off work. Which got me thinking.
Who replaces your income if you have an injury – does your private cover kick in, is it an ACC thing or a bit of both?
You’ve probably heard some horror stories but the general rule is that ACC come to the party first. They don’t always but by default they are supposed to pay 80% of your income (up to $120k) and if there’s a shortfall then your private cover kicks in as far as it can.
Remember for illnesses ACC won’t pay anything, but your private cover will.
Astute self-employed readers will spot an instant problem here – in the case of injuries you’re paying twice but can only ever receive one benefit if you have to claim!
Yes, you can do something about this (And you Should).
This is where Cover Plus Extra (CPX) from ACC comes in. CPX lets you reduce the cover you have with ACC and in return you’ll pay lower levies. You will still need your Income Cover here because that’s how the shortfall is picked up at claim time.
Overall this is not just a recipe for reducing your ACC costs but a great way to ensure you are much better protected for the same or less cost privately!
Most people apply their savings in ACC levies to buy better performing private insurance which gives you much better bang for your buck. Illness as well as accident cover is the main point here.
Also good reputable private insurers have policy wordings that cover you against your ‘Own Occupation’… Whereas ACC have an ‘Any Occupation’ definition.
‘Own’ vs ‘Any Occupation’
This means even though you’re qualified and well paid doing your job/ running your business, if ACC can’t rehabilitate you back into your actual job/ business, then they can just find you another job and make you do that!
Even if this job is minimum wage it’s still considered to be work and ACC have done their part… Not ideal huh?
This is not for everyone of course (if you’re on PAYE and you’ve got this far I’m sorry for wasting your time!) and it shouldn’t be done without considered advice. But if you’re self-employed and want to see if it might work for you, please contact us.