ACC cover options: CoverPlus or CoverPlus Extra?

Every self-employed person in New Zealand has ACC cover from the day they start. The only choice is which shape it takes. The default, called CoverPlus, is worked out from your filed income. The optional upgrade, called CoverPlus Extra, is a pre-agreed amount. If you have steady, established income, the default is usually fine. If your taxable income is lower than what you'd need after an injury, the upgrade covers that gap. This guide walks through the decision.

CoverPlus: the automatic default

CoverPlus starts automatically with self-employment. If an injury stops you working, it pays weekly compensation of up to 80% of your taxable income from the most recently completed financial year, and its levy arrives on the in-arrears cycle covered in the hub guide. Two properties matter:

• It follows your filed income. If last year was a good year, you'll have good cover this year. But a first-year contractor, a deduction-heavy year, or a deliberately low taxable income all shrink the payout the same way they shrink the tax bill.
• The claim requires proving that income. For a newly self-employed person with no filed return yet, this can make the safety net thinner than expected at exactly the point when the cover is newest.

CoverPlus Extra: the agreed amount

CoverPlus Extra works the other way around: you agree a level of cover with ACC in advance, and if you can't work, it pays 100% of that agreed amount, before tax, with no income-proving exercise at claim time. You apply for it, and self-employed people and shareholder-employees who aren't on PAYE are eligible. ACC sets minimum and maximum limits on what you can agree, and your levy is calculated on the agreed amount rather than your filed income.

The situations it's built for:

• Income that swings. If last year was lean, CoverPlus would pay 80% of that lean figure, whereas an agreed amount holds steady.
• New contractors without a filed self-employed year behind them.
• Deduction-heavy filers whose taxable income is genuinely lower than what their household needs in a bad year.
• Certainty itself. Knowing the exact weekly number in advance is worth something when you're the only earner.

Weighing the levy against the cover

The comparison comes down to the levy. CoverPlus Extra at a higher agreed level costs a correspondingly higher levy, and agreeing a lower amount than your income can cut the levy for people who'd rather carry some of the risk themselves. Run the numbers on ACC's own estimator with your real figures, and put the result next to what income protection insurance would cost for the same certainty. They solve overlapping problems and are usually weighed up together.

How Coffer helps

The ACC levy arrives in arrears, and Coffer sets money aside for it from every paid invoice. The help article covers entering your actual levy invoice when it lands. Coffer keeps the ACC year separate from your GST and income tax, so paying one bill never eats into what you've set aside for another.