ACC and group income protection have different foundations
ACC weekly compensation
- Statutory New Zealand injury cover.
- Requires a qualifying covered injury.
- Eligibility and calculation depend on individual circumstances.
- ACC makes the cover and payment decision.
Group income protection
- Insurance arranged under an employer group scheme.
- Can cover eligible illness and injury absence.
- Uses the selected disability definition and waiting period.
- The insurer decides claims under the policy terms.
ACC is injury cover—not general illness income support
Employers should not describe ACC as inadequate or irrelevant. It is New Zealand’s primary no-fault injury scheme and supports large numbers of people. The planning gap arises because ordinary illness does not become an ACC injury merely because it stops someone working.
Group income protection can be designed to respond to eligible illness-related absence as well as injury. Whether a claim qualifies depends on the insurer’s disability definition, exclusions, evidence requirements and other policy terms.
ACC says eligible PAYE employees may receive up to 80% of pre-injury income
ACC’s calculation guidance says an eligible PAYE employee may receive weekly compensation of up to 80% of pre-injury income, before tax and deductions, following a covered injury. Actual payment depends on cover, eligibility, earnings and individual circumstances. Read ACC’s weekly-compensation calculation guidance.
Compare the policy mechanics—not only the headline percentage
- Disability definition: what must prevent the employee from working?
- Waiting period: how long before an eligible insured benefit begins?
- Benefit percentage and maximum: how is insured income calculated and capped?
- Benefit period: how long can an eligible payment continue?
- Offsets: how do ACC, sick leave or other payments affect the insured benefit?
- Eligibility: which employees, occupations, hours and locations qualify?
- Claims support: who helps the employee understand and complete the process?
The same salary can create very different pathways
Employee cannot work after a covered injury
ACC may provide weekly compensation if the employee and injury qualify. Any group income-protection claim must then be assessed against its own terms and ACC-offset rules.
Employee cannot work because of illness
ACC weekly compensation generally does not apply merely because someone is ill. Group income protection may respond after the waiting period if the illness and inability to work meet the policy definition.
This example deliberately does not calculate a combined payment. Doing so without the actual earnings, ACC decision and insurance policy could materially mislead an employer or employee.
Design the benefit around the income-risk gap
- Map current sick leave, payroll support and ACC assumptions
- Define eligible employees and the income-risk objective
- Compare disability definitions, waiting periods, benefit periods and offsets
- Choose a sustainable employer and employee funding approach
- Explain the injury and illness pathways clearly before launch