ACC or income protection insurance: what ACC actually pays if you cannot work, and what it does not cover
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.
ACC pays up to 80% of your pre-injury average weekly earnings, capped at $2,466.20 a week from 1 July 2026, but only if an accident caused you to stop working (ACC, retrieved 9 September 2026). ACC does not cover illness, sickness or contagious disease at all, which is the specific gap income protection insurance exists to fill (ACC: Injuries we don't cover, retrieved 9 September 2026).
The one fact that decides everything: cause, not severity
New Zealanders often assume ACC is a general safety net for any time off work. It is not. The entire system turns on whether an accident caused your injury, regardless of how serious or life-changing the condition actually is.
ACC covers personal injury caused by an accident; it does not cover illness, however serious, and the table below sets out exactly where that line falls.
| ACC covers | ACC does not cover |
|---|---|
| A broken bone from a fall | Cancer |
| A workplace accident injury | A heart attack or stroke not linked to an accident |
| Mental injury linked to a covered physical injury, or specific traumatic events | Depression, anxiety or other mental health conditions on their own |
| Some work-related gradual process injuries, if a work task or environment is shown to cause them | Most other conditions that develop gradually, and most hernias |
| N/A | Illness, sickness or contagious disease, such as flu or measles |
| N/A | Conditions related to ageing, such as arthritis |
(ACC: Injuries we don't cover, retrieved 9 September 2026.)
Does ACC cover illness, or only injury?
Only injury, specifically personal injury caused by an accident. ACC states directly that it is "unable to provide support for conditions that are not injury related, such as general illness or age-related health concerns" (ACC: Injuries we don't cover, retrieved 9 September 2026). Illness, sickness and contagious diseases are explicitly listed as not covered, regardless of how serious they are or how much income they cost you.
What does ACC not cover?
ACC's own list of what it does not cover includes illness, sickness or contagious diseases; stress, hurt feelings or other emotional issues unless linked to an injury it already covers; conditions related to ageing, such as arthritis; most hernias; and injuries that develop gradually unless a specific work activity is shown to have caused them (ACC: Injuries we don't cover, retrieved 9 September 2026). Damage to items that replace a body part, such as hearing aids, glasses or a pacemaker, is also excluded unless the damage itself was caused by a covered accident.
Does ACC pay out for PTSD?
Only in specific circumstances. ACC can cover mental injury when it is linked to a physical injury it already covers, or when it results from specified traumatic events such as being a victim of certain crimes; it does not cover mental injury, including PTSD, that arises on its own without one of those links (ACC: Injuries we don't cover, retrieved 9 September 2026). A mental health condition that develops from work stress rather than a specific accident falls outside ACC entirely; our stress leave and mental health guide covers what applies instead, and our insurance and mental health in New Zealand guide covers how income protection insurers treat a mental health claim.
What happens if I get sick and can't work but it wasn't an accident?
You fall outside ACC entirely and need to rely on other support: your employer's sick leave, income protection insurance if you hold a policy, or Work and Income's Jobseeker Support, which pays a flat rate regardless of your previous earnings (Work and Income, retrieved 9 September 2026). Our ACC vs sickness benefit guide compares what Work and Income actually pays against what ACC pays for an equivalent accident.
How much of my income does ACC actually replace?
Up to 80% of your average weekly earnings before the injury, calculated before tax and deductions, capped at a gross maximum of $2,466.20 a week from 1 July 2026 (ACC, retrieved 9 September 2026). For most employees this is a genuinely strong replacement rate, which is exactly why the gap matters so much when the cause of the absence is illness rather than accident: the 80% simply does not apply at all.
Is income protection insurance worth it if I already pay ACC levies?
ACC levies and income protection insurance cover two different risks, not overlapping ones. Your ACC levies fund 80% income replacement for accidental injury only; they do nothing if illness stops you working, which is the majority of long-term work absences (ACC: Injuries we don't cover, retrieved 9 September 2026). Income protection insurance is designed to sit alongside ACC, typically paying out specifically when ACC does not, for illness-caused incapacity.
Can I claim ACC and income protection insurance at the same time?
It depends on the policy. Some income protection policies reduce their payout by any ACC weekly compensation you are also receiving for the same period, since both are designed to replace lost income; others are structured differently. This is a policy wording question to check directly with a licensed adviser before you assume both would pay in full for the same accident.
What if my illness developed gradually because of my job?
ACC can sometimes cover a gradual process, disease or infection if you can show it was caused by the type of work you do, known as work-related gradual process cover, assessed case by case against the Accident Compensation Act 2001 (ACC: Injuries we cover, retrieved 9 September 2026). This is a narrower and harder test than an accidental injury claim, and most ordinary illness, including conditions unrelated to your specific work tasks, still falls outside it entirely.
Does income protection insurance pay more than ACC?
Not automatically; it depends entirely on the policy you hold, its monthly benefit, and whether it is agreed value or indemnity-based cover. What income protection insurance offers that ACC cannot is cover for the cause ACC excludes altogether: illness. Comparing actual policy terms with a licensed adviser is the only reliable way to know what a specific policy would pay in your situation, since QuoteHub does not publish constructed premium examples.
What's the waiting period difference between ACC and income protection?
ACC generally starts paying from the second week off work, since your employer is responsible for your first week's pay if the injury happened at work (ACC, retrieved 9 September 2026). Income protection policies set their own waiting period, commonly ranging from 2 weeks to longer, chosen when the policy is taken out; a longer waiting period generally reduces the premium.
Can I get ACC and a sickness or jobseeker benefit for the same period?
No, not for the same injury or illness at the same time; the two systems are mutually exclusive by cause, not stacked. ACC pays for accident-caused injury, while Work and Income's Jobseeker Support pays for illness, injury or disability that is not from an accident, so you would apply to whichever system matches what actually stopped you working (ACC: Injuries we don't cover; Work and Income: Jobseeker Support, retrieved 9 September 2026). Our ACC vs sickness benefit guide sets the two payment amounts side by side.
Does income protection insurance cover the same accidents ACC already covers?
Often, yes, alongside ACC rather than instead of it, which is why some policies reduce their payout by any ACC weekly compensation received for the same period. The real value of income protection is not duplicating ACC for accidents; it is covering the illness-caused absences ACC excludes entirely, which is the larger share of long-term work incapacity for most people.
The table below sets out where each type of income support actually applies, by cause.
| Cause of your time off work | What actually pays |
|---|---|
| Accident-caused injury | ACC weekly compensation, up to 80%, capped at $2,466.20/week |
| Illness, unrelated to any accident | Employer sick leave, then income protection insurance if held, or Jobseeker Support |
| Mental health condition, not linked to a covered injury | Employer sick leave, then income protection insurance if held, or Jobseeker Support |
| Work-related gradual process injury | Possible ACC cover, assessed case by case |
(ACC: Injuries we don't cover; ACC: Injuries we cover, retrieved 9 September 2026.)
Where the rest of this gap is covered
ACC and income protection insurance are two of several pieces. The table below points to the rest of the cluster.
| Your situation | Where to look |
|---|---|
| Injured in an accident, need to know what ACC actually pays | ACC vs a sickness benefit |
| Sick, not injured, and need income support | Financial help when sick in NZ |
| Off work sick and unsure how long you can stay off | How long can you be off work sick in NZ |
| Considering income protection cover | Income protection insurance NZ |
| Recently lost your job, not related to illness | Jobseeker Support NZ |
QuoteHub built this page because the ACC illness gap is the single clearest, most concrete reason to hold income protection cover: it is not a hypothetical risk, it is a defined exclusion written directly into what ACC covers. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. If you would like a licensed adviser to look at what income protection cover would actually cost and pay for your situation, start a free comparison.
The rest of the off-work-sick cluster
If an accident is what has stopped you working, our ACC vs sickness benefit guide and QuoteHub's blog explainer on ACC weekly compensation cover the ACC side in full. If illness is the cause, financial help when sick in New Zealand and how long can you be off work sick in New Zealand cover what is actually available while you are unwell, and our broader explainer on what ACC does not cover sets out the exclusions in more depth. The off-work-sick hub puts every page in this cluster in order.
Adviser's view
QuoteHub's read is that ACC gives New Zealanders a false sense of security about income if they stop working. It is genuinely generous for accidental injury, but it pays nothing for cancer, a heart condition, a mental health condition or any other illness, which is precisely the gap income protection insurance is built to cover.
Work out your income gap with a licensed adviser · free, no obligation.
Cite this page QuoteHub NZ (2026). ACC vs Income Protection Insurance NZ: The Real Gap. www.quotehub.co.nz/guides/off-work-sick/acc-vs-income-protection-insurance-nz. Updated 2026-09-09.
References
- ACC: Injuries we don't cover
- ACC: Injuries we cover
- ACC: Changes to ACC client payments from 1 July 2026
- ACC: Weekly compensation for employees
- Work and Income: Jobseeker Support
Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, For Brokers.