You've got a fairly steep learning curve going on and ACC has just thrown a spanner in the works. It's a spanner in the works because ACC isn't intuitive and you're short on time and don't have time to figure this crap out right now.

If this resonates with you, you need to read this, it will short cut this for you.

Let's start with the simple things you need to understand first.

Company or self-employed. Either way both will generate ACC Levy's. A company can and does get treated a little different. Part-time often doesn't work as earnings are earnings, so any income returned under the company will attract ACC Levy's

Part-time or full-time?

This is often a difficult one to get right without context of what this means for you.

Part-time if you work under 30 hours per week then you can claim to be part-time. This will often suppress the ACC invoices for ACC Levy's. Ok great you say, I'll do that, because I work less than 30 hours per week. Ok hold up a second!

Part two on part time, even if you work under 30 hours, if you're earning income and paying tax, there's a possibility that your level of earnings is above the ACC billing threshold and you can and will still receive a levy invoice. The point here isn't about the part time, it's about the earnings. Full time defaults you to the minimum cover level, part time defaults to actual earnings if under the minimum.

What you need to understand, being labelled part time, while it can suppress ACC Levy's, can also make you a non-worker for weekly compensation. This can be a major downside risk, any injury you sustain while listed as part time, and may mean no weekly compensation at the time of injury or in the future if you need treatment in the future for that injury.

Full time will provide you the best piece of mind that ACC will step up to help if you're injured and off work. The initial issue is your ability to prove your personal income, so you can get a claim paid. This is where we recommend ACC's cover plus extra to give you more certainty your financial accounts don't conspire against you, right when you need support.

The second issue, and this applies to all business people, is ACC weekly compensation replaces personal earnings, not business turnover. If you have substantial operating overheads or businesses expenses that won't stop if you're disabled, you will have a shortfall if you only have ACC weekly compensation cover. You need to consider key person or business over heads insurance cover too.

In an ideal world, having income protection at this point is recommended. The challenge is, depending on your circumstances, this may not be available, affordable or even appropriate for your current situation.

Appropriate? yes disability income support is always appropriate. The point I raise here is income protection may not be the right product due to the same issues you currently have with ACC, you can't prove the loss of income, which makes income protection just as challenging.

In this case we would investigate the use of disability support policies that don't rely on a level of income to justify a claim. For example, products justified on mortgage payments or household expenses could be more appropriate. Actually will be more appropriate. Also too, fixed cover for specific conditions that's not income based could be an option too.

The next big thing with ACC is getting your CU code right

This is the risk rating classification that ACC uses to set your levy rates. ACC have over 500 of them, which means it can be a challenge to get it right. As a self-employed person or business owner you have a responsibility to ensure this CU classification is correct.

Problem is you're not a risk underwriter, so getting this right isn't always easy. ACC will generally set you up on a defualt CU code, either manufacturing or agriculture. This is a middle of the road risk, but is not usually the right one for people. If you're a white collar worker then this is going to be several magnitudes more than the rate you should be on, and if you're in a trade, then it's likely to be under assessing the risk.

Under? Sounds good! Not so much as ACC can and do review and backdate levies, this can result in substantial invoices at times you would rather not have them. Get it right and you don't have this risk.

Lastly, billing

ACC send you invoices about 6 weeks after you file your accounts with IRD. Be smart and file your accounts when you're approaching a good cash flow time for your business, rather than filing them when you're quiet because that was a good time to get them done. Yes, get them done when you're quiet, but file them when you're busy. Then the resulting invoicing will be easer to manage. Keeping in mind that there are required filing dates for IRD you need to adhere to.

ACC levies are invoiced from what you return on your IR3 & IR4, and is directly passed from IRD to ACC. If you want to dispute ACC's numbers for your income, you have to work through IRD.

If you have income from multiple sources and it's more than a combined amount of about $120,000, then income linking needs to be done, to ensure you're not paying more than you should be. ACC will not automatically link multiple sources of income and will bill on the individual amounts, which can cost you more than it should.

When you get your invoices from ACC, your first ones could be a challenge. ACC doesn't always bill for your first year in business and you can end up with two years of invoicing across 3 invoices. All 3 will need paying but they won't make much sense to you initially.

This can happen if your first year in business was less than about $30,680 of taxable earnings.

You'll have a final invoice for your first year, an estimate for your second year and a final for your second year. ACC always invoice an estimate in advance and a final for the year before at the same time. And this is where the 6 weeks after filling your accounts comes in, this is about when these all turn up.

If your first year earnings were above $30,680 then you'll get an invoices for your first year. Estimate for the next and final for your first year. A little simpler, but not always the case as first year profits don't happen a lot as setup/start-up costs clobber the income.

And paying for it

Ok the invoicing mess has been covered, paying for it is the next hurdle and likely the one that brought you to this blog.

What most people don't know too much about and stress over, is paying their ACC Levy invoices.

ACC has default payment plan options. If you have combined invoicing on an ACC account under $575 you can spread this over 3 months without incurring penalties, interest or fees on an automatic payment.

If it's over $575 you can spread it over 6 months without penalties, interest or fees. Or you can spread it over 10 months, with an admin fee of 5.4%. A better option than most overdraft or credit card rates. If this is still going to put you under pressure, then we can request longer term options, but this needs to be specifically requested.

There are a number of articles here on my blog about aspects of what we have covered. By far the easiest option for you is to give me a call and we can chat about what you need and get it taken care of for you.

Along with managing your insurance risks and restructuring ACC to be more effective, we also offer an ACC management service for business owners. Many find this an effective way to take the ACC headache away for them.

Give me a call, J-P on 092158998 or 02102269127, or book some time here to discuss your situaiton and options