27,000 self-employed apply to ACC to for post-injury income guarantee
More than 27,000 self-employed people have applied to ACC for ACC CoverPlus Extra, a product which guarantees their
income if they become injured.
All self-employed people are required by law to have personal injury cover with ACC which usually entitles them to 80
percent of their previous year's earnings if they are off work due to injury.
But that may less than sufficient if the person's income was low, perhaps because the business was in start-up mode,
says ACC's General Manager of Injury Prevention and Client Services, Darrin Goulding.
"The self-employed person could end up with replacement income that falls dramatically short of what they had been
earning," he said.
"Furthermore, there's no flexibility to pay a lower levy for a lesser cover if your previous year's income was unusually
high."
To date, 13,000 self-employed people have accepted policy offers and more acceptances keep rolling in.
ACC CoverPlus Extra provides self-employed people and non-PAYE paying people who work for their own company with income
at a pre-agreed level based on what they need, not last year's income.
It is particularly useful for business people who have no earnings history or whose previous year's income was unusually
low, possibly because they were splitting it with a partner.
"If you are injured, you get 100 percent of the agreed amount. No ifs, buts or maybes," Mr Goulding said.
There is also less paperwork and payments are prompt because everything has been pre-agreed.
ACC CoverPlus Extra is particularly attractive to farming couples. A dairy farming couple, for instance, may have
averaged $44,000 for each partner over the last three years.
But those incomes do not reflect the actual financial impact if one or the other is off work through injury.
In the case of the farmer, income would stop, but that would not be so if the wife were injured, if her usual
contribution was administration of their farm.
Under ACC CoverPlus Extra, the farmer could apply for maximum cover, $72,473 from 1 April 2003, while levies for his
wife could be reduced by taking the minimum cover of $13,312.
At present, ACC is getting around 1000 applications for ACC CoverPlus Extra a month, usually on the recommendation of
tax agents and accountants.