Demystifying ACC: Frequently Asked Questions
Here’s the (as simple as it gets) run down on the Accident Compensation Corporation, and how their (seemingly random) invoices work for the self-employed.
What invoices do I pay?
As a business owner you pay two types of ACC:
- For yourself personally as a business owner working in the business (let’s call this your personal ACC bill).
- For your employees working in your business (let’s call this your employer ACC bill). Your employees also pay ACC separately through their PAYE.
Note that you’ll only pay your personal ACC if you’re not on PAYE yourself as the business owner.
When do I pay invoices?
Your personal ACC bill is paid sometime after filing your Income Tax Returns. So, file your Tax Return late, then pay ACC late. The downside with filing late is that you’ll forget about the looming ACC invoice…
In your first year you’ll also get a double-up invoice. One in arrears for the previous year, and one in advance for the coming year.
For your employer ACC bill, you’ll get this in the middle of the year (June to August).
How do they get my information?
They get everything directly from IRD. You don’t need to provide them with any income details. You do need to tell them though if your circumstances change (like you cease being self-employed).
What ACC rate do I pay?
Your ACC rate is based on the industry you’re in. Certain industries are riskier than others, so are charged premiums accordingly.
If they don’t know what industry, they assume the worst and charge you the maximum premium. We can get this fixed historically if needed – get in touch today.
What does it cover?
If injured, you’re entitled to claim 80% of your income, up to a limit ($120,070). You’ve also got to prove the loss of earnings, which can be difficult in businesses where you’ve got staff doing some of the doing (which we should all be aiming for).
What doesn’t it cover?
Illness – ACC only covers injury, not illness. If you’re sick, and only have ACC cover then you’re out of luck.
How can I get certainty?
ACC have a product called “ACC CoverPlus Extra” (not to be confused with “ACC CoverPlus”…without the extra). This gives you certainty of pay-out come claim time, without having to prove a loss of earnings.
It also gives you up front premiums so you know what you’re paying in advance.
What else can I do?
Many business owners reduce their ACC cover and take private insurance. The private insurance covers them for both illness and injury (remember ACC only cover injury).
If you’d like to find out more about:
- Understanding your ACC invoice
- Negotiating a payment extension on your invoice
- Getting certainty on your premium, and your coverage, or
- Getting cover that covers you for both injury and illness, then
Get in touch with us today on 04 212 4977 or email [email protected] and we’ll be happy to assist.