ACC CoverPlus Extra in NZ: How to Set Your Cover Amount, Levies and Claim Right

A working guide to ACC CoverPlus Extra for self-employed Kiwis: how agreed cover removes the proof-of-income fight, how levies are worked out, how the first week and part-time return are handled, and the mistakes to avoid.

CoverPlus Extra (CPX) is the ACC option many self-employed New Zealanders are vaguely aware of but few have set up deliberately. It lets you agree your weekly compensation in advance, instead of leaving it to be worked out from old tax returns at the worst possible moment. That sounds like a detail. In practice it decides how much you are paid, and how quickly, if an injury stops you working.

This guide walks through what CPX is, how the levies and the first week work, how to think about the cover amount, and the mistakes that quietly cost people money.

TL;DR: ACC CoverPlus Extra lets self-employed people and non-PAYE shareholder-employees agree a fixed level of weekly cover up front. If injury stops you working, ACC pays 100% of that agreed amount (less tax), with no fight over what you really earned.¹ Standard ACC pays up to 80% of past income.³ CPX covers injury only, never illness.

What is ACC CoverPlus Extra and who is it for?

Everyone who earns self-employed income in New Zealand is covered by ACC for injury by default, through standard CoverPlus. CoverPlus Extra is the optional alternative you have to apply for. With it, you and ACC agree a set level of weekly compensation in advance. If an injury stops you working, ACC pays 100% of that agreed cover (less tax), regardless of what your business is actually earning at the time.¹

It tends to suit a few groups in particular:

• People with variable or seasonal income, whose last filed tax year may look nothing like a normal year.
• Newly self-employed people, who have little or no filed income for standard cover to draw on.
• Non-PAYE shareholder-employees, who draw income from a company rather than a straightforward salary and can otherwise be under-recognised by ACC.

CPX is not automatically the right choice for everyone. People with steady, well-documented earnings may find standard CoverPlus does the job. The point of CPX is certainty, and certainty is worth most to those whose income is hardest to prove after the fact. If you want the head-to-head, our guide on CoverPlus vs CoverPlus Extra for the self-employed sets the two side by side.

How does agreed cover remove the proof-of-income fight at claim time?

Standard ACC weekly compensation pays up to 80% of your pre-injury income, based on what you last filed with Inland Revenue.³ That is fine when your earnings are steady and documented. It is a problem when they are not, because the burden of showing your loss sits with you, at the exact time you are dealing with an injury.

CPX flips the order. You establish your income and agree the cover when you set the policy up, while you are well and have time to get it right. From then on, the agreed figure is simply what ACC pays at 100% (less tax) if you cannot work.¹ There is no claim-time argument about what you "really" would have earned, and no reduction just because the business keeps ticking over while you recover.

The table below compares the two on the points that matter.

CoverPlus vs CoverPlus Extra at claim time

Source: ACC, illustrative. Cover and payment are always subject to the policy terms, ACC's acceptance of the claim, and the cover being injury-related.

How are CoverPlus Extra levies calculated and invoiced?

With CPX, your levy is based on the cover amount you agree rather than on the income you file with Inland Revenue.⁸ You are, in effect, paying to insure a chosen figure, so the bigger the agreed cover, the higher the levy.

A change worth knowing about: from 1 April 2025, the Working Safer Levy for CPX policyholders is also calculated on your chosen cover amount, rather than on your Inland Revenue earnings as before. It used to be invoiced separately, roughly 12 months after the main CPX invoice; consolidating it onto the cover amount tidies that up.⁸

On timing, CPX invoices are issued around April each year.⁸ If you are only on CPX for part of a year, ACC charges standard-product levies, based on your filed earnings, for the remainder of that year.⁸ That split catches people out when they switch onto CPX mid-year and then see two different bases on their account.

The cover amount you can choose sits inside a band that ACC resets each year. For the levy year 1 April 2024 to 31 March 2025, the agreed cover ranged from a minimum of $35,400 to a maximum of $113,826 a year, with certain amounts requiring approval.² Those bands move with wage inflation each April, so the figure you set in one year is not the ceiling forever. For a fuller walk-through of choosing the number, see how much CoverPlus Extra cover to take.

What level of cover should self-employed people choose?

There is no single right number, but there are sensible anchors. A common starting point is your normal, sustainable self-employed income, set at a level you could genuinely live on if it had to replace your earnings for an extended period.

A few things to weigh up:

• Your real economic income, not just your salary. Shareholder-employees in particular often draw a modest PAYE wage plus shareholder income, and the lower figure can understate what they actually rely on.
• The annual maximum. ACC's weekly compensation is also capped overall. For the 2024/25 year, before the 1 July 2025 indexation, the maximum gross weekly compensation ACC could pay was $2,350.95 a week.⁴ A very high agreed cover cannot pay out above the statutory cap that applies.
• Your other cover. If you already hold private income protection, you may not need CPX set to the absolute maximum, because the two can be structured to work together rather than overlap.

Because the right figure depends on your actual income and what else you hold, this is the part most worth checking with an adviser rather than guessing. Shareholder-employees, in particular, should read our note on PAYE shareholder-employees and CPX.

How does the first week and stand-down work for CPX?

ACC weekly compensation does not start on day one. There is a 7-day stand-down, or non-entitlement period, and weekly compensation usually becomes payable from day 8 after the injury.⁵

For employees, the first week is normally covered by their employer. Self-employed people do not have an employer to do that, so the rules let CPX and self-employed clients be paid for that first week of incapacity rather than going unpaid for it.⁵ It is a small but real advantage of being set up properly, and one reason it is worth confirming how your own cover treats the first week.

It is also worth knowing the long-stop. Weekly compensation on any single claim is limited to a maximum of two years from when payments start. After that, long-term claimants move to NZ Superannuation only.⁷ CPX is built for getting you through an injury and back to work, not for permanent income replacement, which is part of why pairing it with private cover is worth considering.

What happens to your benefit if you return to work part-time?

CPX offers two compensation options, and the difference shows up when you go back to work gradually.

The full compensation option pays 100% of the agreed cover (less tax) until you return to full-time work. The lower levels of weekly compensation option carries a slightly lower levy, but reduces your payments on a part-time return. For example, going back at 50% of your normal hours reduces your compensation by 50%, and payments stop once you are working at least 30 hours a week.⁶

Neither option is "better" in the abstract. The full option costs a little more but keeps paying while you ease back in; the lower-levels option saves on levy but cuts your income as you recover. Which suits you depends on how a realistic recovery would look in your line of work.

What are the most common CoverPlus Extra mistakes?

A handful of issues come up again and again:

• Leaving the cover on autopilot. People set a figure years ago, often the minimum, and never revisit it as their income grows. The levy keeps coming out, but the cover no longer matches the income it is meant to replace.
• Insuring only the PAYE salary. Shareholder-employees who set CPX off a modest drawn wage can leave a chunk of their real income uncovered.
• Forgetting CPX is injury only. Like all ACC cover, CPX pays nothing if illness, rather than accident, stops you working. For many self-employed people, illness is the more likely reason for a long spell off work, and that gap needs private income protection to close.
• Overlooking the tax point. ACC weekly compensation, including CPX payouts, is taxable income and must be returned as income for tax purposes.⁹ An agreed cover of, say, $60,000 is a gross figure, not what lands in your account.
• Choosing the wrong compensation option. Picking the lower-levels option to save on levy can sting if a phased, part-time return is the realistic path back for your work.

When should you review your CoverPlus Extra each year?

The natural point is when the annual CPX invoice arrives, around April.⁸ That is when the new cover bands apply and when any change to your agreed amount takes effect, so it is the obvious moment to ask whether the figure still fits.

It is also worth a look whenever your circumstances shift: a jump or drop in income, a change in how you draw money from a company, taking on or paying off business debt, or adding private insurance that overlaps with what CPX provides. The goal each time is simple: confirm the agreed cover still reflects your real income, that you are on the compensation option that suits how you would actually recover, and that the illness gap is covered elsewhere.

Frequently asked questions

Does CoverPlus Extra cover illness? No. Like all ACC cover, CPX pays only for injury, never for illness. If you want protection for the times illness stops you working, you need separate private income protection. CPX and standard CoverPlus share this limit.

How much does ACC pay under CoverPlus Extra? ACC pays 100% of your agreed cover amount, less tax, if an accepted injury stops you working.¹ The agreed amount sits within ACC's set band; for the year to 31 March 2025 that band ran from $35,400 to $113,826.² An overall statutory cap on weekly compensation also applies.⁴

When does my ACC weekly compensation start? There is a 7-day stand-down, with weekly compensation usually payable from day 8 after the injury.⁵ Self-employed and CPX clients can be paid for that first week rather than relying on an employer to cover it.⁵

Is my CoverPlus Extra payout taxed? Yes. ACC weekly compensation, including CPX payments, is taxable income and must be returned as income for tax purposes.⁹ So your agreed cover is a gross figure, not the net amount you receive.

Can I change my agreed cover amount? Yes. The cover bands reset each April, and you can apply to change your agreed amount, subject to ACC's rules and approval for certain levels.² Reviewing it when the annual invoice arrives is the simplest way to keep it current.⁸

How long does ACC keep paying on one claim? Weekly compensation on a single claim is limited to a maximum of two years from when payments start. After that, long-term claimants move to NZ Superannuation only.⁷

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This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. Smiths Financial is a trading name of Craig Smith Business Services Ltd (FSP712931), which holds a Class 2 financial advice provider licence issued by the Financial Markets Authority. We're generally paid by commission from the insurer or provider when you take out a policy or product through us; this doesn't change the premium or price you pay. Whether a claim is paid depends on the terms, conditions, exclusions, stand-down periods and underwriting of the specific policy, and on your disclosure. Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 28 April 2025.