ACC Coverplus v Coverplus Extra

If you are self employed (includes shareholder salaries) or a contractor you have two options for you Accident Compensation cover being

• Standard CoverPlus (CP) - cover by default based on your income (cover based on income to a limit of $136,544)

• CoverPlus Extra (CPX) - agreed cover with ACC (within a range of $39,492 and $122,232)

You’ll automatically be placed on CoverPlus (CP) and Inland Revenue provides ACC with a summary of your earnings from your income tax return (IR3).

The basic difference between the two is

ACC Standard CoverPlus - levy based on your actual income, and compensation is calculated as 80% of your pre-injury income.

ACC CoverPlus Extra - levy based on agreed level of cover, and compensation is calculated at that agree cover amount.

Often clients will agree a lower lever of ACC with CoverPlus Extra, and use the savings on ACC Levies to add additional private cover which may be trauma, medical or income protection. CoverPlus Extra also gives surety of cover for those with fluctuating incomes, and predictable levy costs.

ACC has a comparison table that can be found by clicking HERE

Standard CoverPlus (CP)

Standard CoverPlus pays you up to 80% compensation if you’ve had an accident and can’t work. You will have to prove loss of earnings, and by default is based on you last years taxable income and your industry classification unit (i,e builder, accountant, engineer etc)

So if you earn $150,000 per annum, ACC will pay you 80% of the maximum limit of $136,544, being $109,235 per annum (before tax), or $2,100 per week (before tax).

CoverPlus Extra (CPX)

CoverPlus Extra (CPX) allows you to choose how much of your income you want to be covered if you have an accident and can’t work. The invoice is generated for the year in advance, based on the agreed cover amount of between $39,492 and $122,232. Please note, it has to be agreed before 31st March 2025.

If you have an accident you will be compensated 100% and do not have to prove loss of earnings on the standard option.

So if you earn $150,000 per annum, but have agreed cover for $52,000, ACC will pay you 100% of the agreed cover, being $52,000 per annum (before tax), or $1,000 per week (before tax).

This is a suitable option if you have fluctuating income, either yearly or seasonal or if you have other forms of cover such as income protection insurance. It provides greater cashflow certainty as you’ll know exactly how much ACC will compensate you.

You can apply for CoverPlus Extra if you’re:

• self-employed or a non-PAYE shareholder, i.e. you don’t receive PAYE deducted earnings from your company

• working full-time (more than 30 hours per week on average)

• working part-time (30 hours or less per week on average) and have earnings above the CPX minimum for the current year.

If you do not pay your CPX invoice by the due date, your agreed level of cover will cancel and you will be defaulted back to the standard CP method.

If you would like to apply for CPX or unsure if it is right for you, then get in touch with us today.