ACC is one of the most confused topics we discuss in our client meetings.\u00a0 So lets see if you can help clarify what its all about.<\/p>\n
When you are receiving wages and having PAYE deducted, there is a portion of this that relates to ACC Earner Levy cover – that is the cover for all non work related injuries, and everyone getting a wage pays this portion within their IR deductions (IR pay it on to ACC).\u00a0 \u00a0For those that receive an income without PAYE deducted, ACC will send you a bill based on your income filed in your tax return.<\/p>\n
There are three different accounts that you will pay into:<\/p>\n
When your accountant files your first income tax return, this activates your account with ACC and they will send you a\u00a0 bill based on those earnings to cover you for the above three accounts.\u00a0 At the same time, they will include a provisional estimate for the following year (so this could end up a fair sized bill to pay).\u00a0 \u00a0 Its a bit like provisional tax, where once your first tax return is filed, this generates a bill for the last financial years income, and potentially the current year also.\u00a0 So you could end with both at the same time, given they are activated at the time the returns are filed…. ouch…<\/p>\n
With regards to ACC, you can choose to have a level of cover you have, as opposed to be covered based on your previous years income (which you may not know at the time it is needed, and can seriously hold up the process of getting assistance for weekly compensation.\u00a0 Not when you need when dealing with any type of injury as a business owner).\u00a0 \u00a0This is called ACC CoverPlus Extra (CPX).<\/p>\n
CPX is an optional cover product that allows you to choose how much of your income you want to be covered if you have an accident and can\u2019t work. It is especially suited to those who:<\/p>\n
With this option ACC will pay 100% of the agreed cover minus tax, divided into weekly payments until you can get back to full-time work. This provides greater flexibility and certainty. For example, if your cover is for $52,000 per year, you will get 100% of that amount each week, which is $1,000 before tax.<\/p>\n
In return for a slightly lower levy, this option provides weekly compensation payments which reduce when returning to part-time work. For example, if your cover is $52,000 per year, they will pay 100% of this (before tax) until you start working part-time. If you return to work for 50% of your normal working hours, your compensation will reduce by 50%. The compensation stops when working at least 30 hours per week.<\/p>\n
To find out if\u202fCPX\u202fis the best option for you by calculating your levies here.<\/a><\/p>\n Or, have a chat with us.<\/p>\n