Get on top of your ACC

Matamata Chronicle - - Rural Delivery - By BY PETER HEX­TER

As a farmer you have to pay your ACC levies based on your tax­able earn­ings each year. This pro­vides you cover in the event of an ac­ci­dent whether farm­ing-re­lated or not.

Stan­dard ACC Cover Plus pays 80 per cent of your tax­able 2011 in­come, up to $91,000.

With ACC Cover Plus Ex­tra (CPX) you have a choice to take the max­i­mum cover of $110,000. Gen­er­ally this is based on 120 per cent of your av­er­age in­come for the past three years.

We en­cour­age our clients to be on CPX giv­ing them a fixed amount in the event of an ac­ci­dent. This means they don’t have to prove loss of in­come and re­moves the risk of cover be­ing cal­cu­lated on an un­usu­ally poor year such as a drought sea­son.

Farm­ers should re­view their ACC cover and pre­mi­ums with their ac­coun­tant an­nu­ally, specif­i­cally look­ing at the ‘‘clas­si­fi­ca­tion’’ for each self-em­ployed per­son. Very of­ten all par­ties are un­der the same one, whereas we now have the choice to in­di­vid­u­alise the cor­rect clas­si­fi­ca­tion for the ac­tual work be­ing done by that per­son.

There are dif­fer­ent clas­si­fi­ca­tions/levies within the agri­cul­ture in­dus­try for dairy farm­ing, graz­ing, book work et cetera.

Be­ing on the right clas­si­fi­ca­tion can cre­ate huge sav­ings in ACC pre­mi­ums.

For ex­am­ple, in a dairy farm­ing part­ner­ship on Stan­dard Cover Plus with earn­ings of $140,000, with salary al­lo­cated $70,000 each, ACC levies would be $9028.

By trans­fer­ring them to CPX the farmer’s cover can re­main the same, but the part­ner do­ing book work could con­sider re­duc­ing cover from $56,000 to the min­i­mum of $21,216 and when placed on the cor­rect clas­si­fi­ca­tion of ad­min this would give a pre­mium for both of $6160, a sav­ing of al­most $3000.

Ad­di­tional as­pects to look at when re­view­ing your ACC in­clude:

Age of each per­son as more es­tab­lished farm­ers will not re­quire full re­place­ment ac­ci­dent cover as farm is more fi­nan­cially se­cure.

If the ‘‘ex­pe­ri­ence rat­ing’’ or ‘‘no claims’’ has been ap­plied, dis­counts could be up to 10 per cent.

Up­dat­ing to CPX to se­cure a fixed level of cover.

Com­plet­ing an Agri­cul­ture Work­safe course to se­cure a fur­ther 10 per cent dis­count.

Over re­cent years ACC has been tight­en­ing its claims cri­te­ria and not pay­ing out for ‘‘wear and tear’’ such as an old sports in­jury or her­nia.

It is vi­tal to lodge your claim with ACC at the time of the ac­ci­dent.

This means it is doc­u­mented with ACC so should it progress to time off work, the wear and tear may not be­come an is­sue.

Re­duc­ing your ACC cover and pre­mi­ums and com­ple­ment­ing this with pri­vate in­sur­ance for sick­ness and ac­ci­dent could be a bet­ter op­tion. All the main life in­sur­ance providers now have key per­son and spe­cific farmer-re­lated prod­ucts.

De­pend­ing on age the pre­mi­ums are gen­er­ally less than ACC and claims are not re­stricted to ac­ci­den­tal in­jury but cover any­thing stop­ping you from work­ing in­clud­ing ill­nesses which make up the ma­jor­ity of off-work time. These prod­ucts will also pay out fully if you are re­ceiv­ing pay­ments from ACC.

It is im­por­tant that you re­ally un­der­stand the cover you have. ACC pro­vides cover for ac­ci­den­tal death but this is not the case with pri­vate in­sur­ance ar­range­ments as peo­ple tend to have life in­sur­ance poli­cies to cover death.

Also when re­view­ing a com­bi­na­tion of ACC and pri­vate in­sur­ance, be care­ful with re­gards to pre-ex­ist­ing con­di­tions that may be ex­cluded from pri­vate in­sur­ance.

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