Making ACC Work Harder for Business Owners with CoverPlus Extra
Advice from the expert: Natalie at ACC Assist
You know how we do it here at Released—if we aren’t the experts in a topic, we’ll seek advice from someone who is. That’s how we came to be talking with Natalie Whelan, ACC specialist at ACC Assist.
Natalie works primarily with trades SMEs and sole trader tradies, helping them to get the most out of their ACC spend. Prior to operating ACC Assist, she was a financial advisor—and saw ACC (specifically, their CoverPlus Extra product) as one area where she could make the most impact financially for these business owners.
We’ll start with the obvious question…
What is Cover Plus Extra?
This is an optional cover product offered by ACC. It provides self-employed people with more control over their ACC cover by setting an agreed cover amount. Sole traders and business owners will then know exactly how much they need to pay and how much they will be paid out at claim time.
Cover Plus Extra (CPX) is available for non-PAYE shareholders and sole traders working more than 30 hours per week. Minimum cover is $35,400 and maximum is $113,826 *FY 2024/2025.
Why does Natalie recommend Cover Plus Extra?
To put it simply, Natalie has found that her clients get more reliable and predictable cover for a similar cost when using a combination of Cover Plus Extra and private income protection insurance.
The standard ACC process is as follows: you work for all or part of a financial year. When your income is filed, it is sent from the IRD to ACC and an invoice is created according to your income, hours, and type of work. Alternatively, you can sign up for CPX and choose your own level of cover.
This standard process means that your levies are often unpredictable. Additionally, ACC only pays out on 30% of all disability claims because they only cover ‘accidental’ injuries. Opting for CPX means you can align your cover with the statistics and redirect extra funds into another insurance product.
As an example, a man (or woman)-in-a-van operator might be paying $4,000 per year on the standard ACC cover, based on their last year’s earnings. With Natalie’s help and CPX, that $4,000 can stretch—often, clients will use the savings to secure private income insurance. This set-up has much improved outcomes and much more reliable, comprehensive cover.
“What it often did was created quite a big savings of levy which we were able to redirect into an insurance programme, so a lot of the time they came out cost-neutral.”
The standard ACC process is as follows: you work for all or part of a financial year. When your income is filed, it is sent from the IRD to ACC and an invoice is created according to your income, hours, and type of work. With CoverPlus Extra, you can choose how much income is covered, and while you may be lowering your cover, you can mitigate risk by allocating the savings to a private insurance policy.
Another helpful aspect of CPX for business owners is that they don’t need to prove a loss of income to the business to be able to claim. If you have a team who can carry a lot of the load on the tools and see you through your injury with little to no effect on income, you will still be able to claim 100% of your agreed entitlement.
But wait, there’s one more thing: couples operating a business together can adapt their individual policies to their situation. If one spouse handles the bookkeeping and administration, their CPX cover—and therefore their levies—can reflect that lower-risk position.
Common ACC hurdles
Natalie shared some of the problems that her clients have faced in navigating ACC:
Some tradies new to being self-employed file taxes and ACC into the too-hard basket for the first year or so; this can make the “new” expense—whether it be standard cover or CPX—a bit of a shock. However, the longer the issue is kicked down the road, the trickier it gets to resolve.
Clients who have switched to CPX during a financial year might be surprised to receive two invoices: one for standard cover and one for CPX. These will be pro-rated according to the time period each was in use, but it can be a surprise to receive a double bill.
On a standard cover ACC plan, entitlements and invoices will fluctuate according to the previous financial year’s income. This makes it tricky to plan accurately and may result in cover that is not sufficient for a growing business. Additionally, if your self-employment began towards the end of a financial year, your levies and entitlements will be based on only a few months or weeks’ worth of income. This is why Natalie encourages self-employed people to sign up for CPX as soon as they start!
If CPX users don’t pay their bills, they are booted out of the program and back onto standard cover.
Natalie’s ACC Assist service helps trades business owners and sole traders to navigate these and other hurdles, ensuring they are getting the most value possible for every dollar spent on income protection. She takes care of this aspect of business from top to bottom, from payment reminders to the administration of signing up for CPX.
ACC is often out of scope for accountants, and the majority of financial advisors won’t touch it. The ACC Assist service is a passion project for Natalie, born out of identifying a big gap in understanding amongst those who need it most.
“It’s the sole traders and the SMEs that get shafted every way possible in business, and this is a great service offering because people don’t understand ACC… there are so many people that don’t know about CoverPlus Extra.”
If you’re feeling a little bit shafted, or would simply like to know how you could improve your income protection with CPX, get in touch with Natalie at ACC Assist! She has the experience and knowledge necessary to help sole traders and SME owners—particularly those in the trades—make sure they are getting maximum cover for minimum spend.
