Do you hate paying your ACC Invoice?
Well if you are self-employed and receiving Non – PAYE shareholders salary or taking drawings, then this is for you.
New Zealand is a land of Small to Medium Enterprises, and if you are like many business owners who began your business and ended up on the default ACC schemes of CoverPlus, or WorkPlace Cover then help is at hand.
There is an alternative which may suit your situation and allow for significant savings to provide better insurance cover for both sickness and injury, not just injury. Let me introduce you to CoverPlus Extra.
CoverPlus Extra is an agreed value accidental injury scheme where you can select the level of cover you want (within limits) and therefore provide the ability to reduce the cover and the associated levy.
Do you split your income for tax purposes?
Under the default schemes you have to “prove a loss”. This may be difficult when your partner is seeking to claim, as the income does not reduce due to the efforts of the other partner.
Paul is a Plumber who’s taxable Income is $40,000.
Paul’s wife Wendy, has a taxable income is $40,000. Wendy runs the office for 5 hours a week.
ACC may not pay if Wendy was to claim, as Paul generates the whole $80,000! With CoverPlus Extra you can “lock in” the benefit that will be paid as it is an Agreed Value contract.
Are you on the correct Occupation Code?
All shareholders must be on the same Occupation Code under the default schemes.
With CoverPlus Extra each shareholder can be coded as per their occupation within the business. So this would mean for the above scenario Wendy could be rated as an Administrator – saving even more money!
Take a look at the diagram below which makes for very compelling reading showing the mix of Accident Claims Vs Illness Claims.
So what’s the catch?
Well nothing. There are some Pro’s and Con’s as with all schemes, and these need to be discussed along with your insurance cover to ensure that they fit together and work at claim time without paying for more than you need.
However, in general I have found CoverPlus Extra to be a significant advantage for many business owners looking to save money, get better cover and more certainty at claim time.
The Last Word
As individual circumstances vary, always seek advice from a Authorised Financial Adviser before making any changes to your existing insurance plans (including ACC), or taking out new insurance policies.
* Statistics courtesy of Gen Re – NZ IP Experience Survey 2004-2008
Published on Monday, February 18th, 2013, under Latest News