Self-employed? Know your ACC entitlements and the best insurance options.

19 September by Lifetime in Financial Planning, ACC, Business Protection

Self-employed? Know your ACC entitlements and the best insurance options.

For construction and the related trades and services workers, many working in subdivisions and rebuild sites across New Zealand, now is the best time to become aware of the insurance options and ACC cover they are entitled to.

With Christchurch still rebuilding following the 2011 earthquakes, and greater tracts of land likely to open up in Auckland, both cities have a growing proportion of self-employed workers.

Many of the Kiwi companies I’ve worked with tend to make assumptions about their entitlements under ACC. It’s a common belief that under the scheme they will get 80 percent of their weekly wage if they are injured. But this is not necessarily the case.

Self-employed or shareholder employees have an expectation that they will receive weekly compensation “up to” 80 percent of their income.  In reality this amount can vary and is not set at that top end. Likewise people who fall ill, suffer cancer, heart problems or a stroke are not covered by the ACC injury scheme.

But there are different options to add to your insurance portfolio that mean you can get wider cover, adding to the ACC injury insurance. This is particularly important given injury cover under ACC is never guaranteed.

We at Lifetime can help you take a look at the provisions under the ACC CoverPlus Extra option. That product lets self-employed people negotiate a pre-agreed level of lost earnings compensation.

Anyone that is self-employed or is a shareholder employee who is a non-PAYE (pay as you earn) employee is eligible for CoverPlus Extra.

As ACC notes on its website, taking this option means you know exactly how much you’ll receive each week if you are injured and can’t work – whether the injury is work-related or not.

By taking a lower amount of cover for potentially lost earnings, for example 50% instead of 80%, we may be able to get a broader range of cover for your ACC money.

While the amount of ACC cover is lower, some or all of the savings could be reinvested in to other types of insurance including income protection, mortgage protection and medical insurance to help a worker’s situation in case of both injury AND sickness. Visits to the doctor for sickness can be covered under some types of insurance but not through ACC.

Lifetime is able to advise on the amounts of ACC and each other type of insurance a self-employed Kiwi should have.

That equation will change according to each individual’s circumstances. The average likelihood of illness or injury can both vary according to age. Other variables include a person’s circumstances such as whether they have a family and how much risk they want to take.

As part of insurance discussions, we talk to clients about their hobbies, dreams and aspirations in order to build their unique profile.  

Anyone that is self-employed or is a shareholder employee who is a non-PAYE (pay as you earn) employee is eligible for CoverPlus Extra.

In our discussions, we go through a full range of risks and scenarios that can occur under their ACC cover and additional insurance options they might want to choose.

We see our work with ACC’s team of business relationship managers as essential, ensuring our full understanding of the complex ACC provisions so Lifetime customers can make informed decisions that best suit their individual circumstances.

If this has created any doubt in your mind about your ACC entitlements or what will pay the bills in the event of illness, let us do your review and provide you with peace of mind. 

As a Coeliac and a Financial Adviser, I have been asking myself several questions about how best to protect myself and my Coeliac daughter from the financial effects of any future illness. Additionally, how much do insurance companies actually understand about Coeliac Disease? And how do they treat us when it comes to assessing our risks of ill health?

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