ACC CLAIMS AND ACC LEVIES, GET THEM UNDER CONTROL.

It may even be a money saver, tradies you’ll want to read further.

ACC is the Accident Compensation Corporation. You pay your levies to ACC and if you have an accident ACC pay a claim. It does what it says on the label, pays a claim for an accident. Whether it’s a trip to the GP for a sprain, an operation after an injury or extended death benefits for dependents, ACC comes to the party. Simple really. Well, not if you’re self-employed. For the self employed ACC levies can be expensive and ACC claims can be tricky. It can mean financial hardship if an ACC claim is far lower than earnings. It can hurt the bottom line if ACC levies are more expensive than they need to be.

That is why ACC claims and ACC levies can be a tough conversation with the self employed.

WHAT’S THE PROBLEM?

Whether you’re in Kaitaia, Kaka Point or here in Kapiti a discussion on ACC is guaranteed to cause debate amongst the self-employed. ACC, while great for the employed, can be expensive and confusing for those that work for themselves. Complaints include high levies, lack of flexibility and lower claims than expected. Most people don’t know that they have the power to get on top of ACC claims and levies, but they do.

HOW DO I CONTROL MY ACC CLAIMS AND ACC LEVIES?

It’s always easier to explain with an example.

John and Jean run a building company. Johns been self-employed for 10 years and takes 'drawings'. He pays his standard ACC Cover Plus levy and John believes he is covered. Jean does the books and admin as a 50% shareholdre. When John has an accident and is due weekly compensation ACC will go to his last tax statement to calculate the amount. John splits the profits his wife, lowering his taxable income. This now has a significant impact the family.

John might be expecting to get 80% of his $130,000 expected profit for this year, however compensation is based on the half he is taxed on. He is now facing 80% of $65,000. The most he will receive is $1000 a week. That's pretty upsetting but it's about to get worse.

ACC is calculated on the last available tax return. The last return was for 18 months ago and profit was lower and taxable income was $55000. ACC calculate compensation of $846 a week. The family are in trouble.

ACC Coverplus Extra can make ACC compensation and levies predictable.

HOW COULD ACC COVER PLUS EXTRA HELP?

ACC Cover Plus Extra is designed for the self-employed. Under specific conditions it allows self-employed to set their ACC compensation and levy at a level that suits them.

You can set your cover to as low as you want or up to a reasonable demonstrable level. Now you control the levy and know what you will receive at claim time. It's a good idea to seek advice from a qualified insurance adviser first. There could be serious consequences from a DIY job.

There are other benefits for those that split earnings with shareholders. Depending on the nature of the business there could reasonable savings for the administrator/shareholder. No-one likes paying higher levies than they have too.

ACC also has an impact on a private Income Protection policy. If you have a personal policy 'offsetting' needs to be considered and talking to an adviser is a good idea. If you don't have this cover, why not? It is worth looking at options as ACC only pays for accidental injury the private cover would be there for sickness too.

By talking to an adviser you could be in a much better financial situation after an accident. Less stress when you need it. Getting control of ACC Claims and ACC levies could make insurance much more efficient.

TIME FOR A RECAP

ACC COVER PLUS EXTRA:

1 – Allows you to tailor your cover, setting it to an amount that works for you.

2 – All shareholders that draw a salary can set their levy to their job description. Not the businesses.

3 – The savings can go towards private income protection which covers accidents AND illness.

JUST REMEMBER:

1 – A reduction in ACC means a reduction in death benefits and you may need to consider extra life cover.

2 – It’s not permanent and if you miss a payment it will revert back to standard ACC after 14 days.

DO I NEED AN INSURANCE ADVISER?

You are an expert in your industry with years of training and experience and insurance advisers are the same. At Cover Yours our advisers know how ACC works. We know how it interacts with private insurance policies, so it’s a good idea to get in touch with us before you botch a DIY job. If you think you would like to know more get in touch. You can get control of your ACC claims and ACC levies.

_{Cover Yours Ltd (FSP769531) and Marc Hamilton (FSP306046) are registered Financial Service Providers and you can search the register here. Marc Hamilton is a member of the FSCL Disputes Resolution Service. Cover Yours Ltd and Marc Hamilton’s disclosures can be found here or by emailing marc@coveryours.co.nz}