Report

ACC pays 80% of your income. Most income protection policies subtract it before paying.

ACC's Injuries in New Zealand report counts more than 20 million days away from work. ACC replaces 80% of pre-injury earnings, nothing at all in the first week, and most New Zealand policy wordings offset whatever ACC pays. The uncovered fifth of ACC's own spending runs to about $714 million a year.

By Henry Smith · ACC · 2026-06-17

What this means for you If an injury stops you working, ACC, the state injury scheme, replaces 80% of your pre-injury earnings, so the last fifth of your income is yours to cover, and anyone earning above ACC's maximum cap loses more than a fifth. If you already hold an income protection policy, most New Zealand wordings offset ACC, meaning the insurer subtracts whatever ACC pays before it pays anything itself, so the wording decides whether your cover tops up that missing fifth or only pays when ACC pays nothing. The first week off work sits outside ACC's weekly compensation altogether, covered by your employer at 80% for a work injury or by your own sick leave or annual leave otherwise.

Written by Henry Smith · Reviewed by Smiths Insurance & KiwiSaver, licensed Financial Advice Provider (FSP712931)

If an injury stops you working, ACC pays 80% of your income. It never pays the last fifth. And if you hold an income protection policy expecting it to fill that fifth, the wording decides whether it does. Most New Zealand policies offset ACC, which means the insurer subtracts whatever ACC pays you before it pays anything itself. On those wordings the policy is not a top-up. It is a backstop for the weeks ACC pays nothing.

One of those weeks is the first one. ACC's weekly compensation does not start until after it. For a work injury your employer covers the first week at 80%. For any other injury you are usually burning sick leave or annual leave (ACC).

Add that missing fifth up across everyone ACC paid last year and it comes to about $714 million of earnings New Zealanders never get back. That is on ACC's own numbers. You will not find the figure in ACC's Injuries in New Zealand report, or anywhere else we can find. We built it from two things ACC publishes separately: how much it paid out in weekly compensation, and the 80% rule it pays under.

What this means if you earn a wage

Twenty per cent is the best case, not the worst. ACC counts your earnings only up to a maximum cap. Earn above that cap and you lose more than a fifth, and the higher your pay the wider the gap gets. Our guide to how much ACC weekly compensation pays sets out the cap and how it works.

For a household the practical shape is this. A fifth of the income stops arriving for as long as the injury keeps someone off work, with a first week ahead of it that ACC does not fund at all, while the mortgage, the rates and the power bill keep arriving in full. Whether anything fills that space depends on the wording of the policy someone holds, not on the fact that they hold one. The question is short. Does it top up what ACC pays, or does it only pay when ACC pays nothing? We cover the shape of that gap in what ACC does not cover.

Where the $714 million comes from

This is our calculation, not ACC's. It takes three steps.

ACC paid $2,855 million in weekly compensation in the year to 30 June 2025, up from $2,474 million the year before (ACC, Annual Report 2025).
That was 80% of the earnings it was replacing. So the full earnings behind it were $2,855m divided by 0.80, which is $3,568.75 million.
The fifth ACC never pays is 20% of that: $713.75 million. Call it $714 million a year.

No assumptions about average wages, and no modelling. It is ACC's own payment divided by ACC's own replacement rate.

There is a simpler way to feel the same thing. The fifth you lose is a quarter of what ACC actually pays you. For every four dollars that land in your account, a fifth dollar is missing.

What ACC's report counted

ACC released Injuries in New Zealand on 17 June 2026 and called it a call to action. It counted more than 2 million injury claims accepted in the year, and more than 20 million days away from work in 2025 (ACC). It sorts the damage by where people got hurt, giving days of weekly compensation paid, scheme costs, meaning what ACC itself paid out, and lost productivity, meaning the value of the work that never got done.

Setting	Days of weekly compensation	Scheme costs	Lost productivity
Home	6.4m	$934m	$2.7b
Work	4.7m	$815m	~$2b
Sport and recreation	2.5m	$389m	~$1b
Road	1.3m	$201m	$549m
Four settings combined	14.9m	$2,339m	~$6.25b

Source: the same ACC report. The combined row is our addition.

Two things stand out in the same report. Home tops the table, mostly falls during ordinary daily activities, and sport and recreation produced more than 480,000 claims, with gym and fitness injuries up 10% and now ahead of rugby. Road injuries are the expensive outlier: under 2% of claims but 11% of costs, averaging $14,500 a claim.

Spread ACC's $2,855 million of weekly compensation across the 14.9 million days above and ACC paid about $192 a day (the same annual report). The unpaid fifth of that is about $48 a day, and the injured person covers it.

Is $714 million a lot?

Yes, and the yardstick is the private market built for the same risk. New Zealanders paid $539 million in premiums for income protection cover in the year to 31 March 2026, on figures from the Financial Services Council, the industry body for New Zealand life insurers (FSC). Income protection is the private policy that pays a monthly income while illness or injury keeps someone from working.

So every income protection policy in the country, added together, brings in less each year than the ACC shortfall takes out of household earnings. The two numbers are not the same kind of thing. One is money paid in for cover. The other is earnings simply gone. The scale is the finding.

None of this is ACC short-changing anyone. The scheme was built to replace 80% and not 100%, so that going back to work always pays better than staying on compensation. The gap is deliberate. Nationally it is the size of an insurance market. In one household it is a fifth of the income, every week the injury lasts, starting from week two, and what sits in that space is either savings or a policy whose wording tops ACC up rather than waiting for ACC to stop.

How solid are these numbers?

The time periods do not line up. The injuries report covers calendar 2025, ACC's weekly compensation spend covers the year to 30 June 2025, and the FSC premium figure covers the year to 31 March 2026. A strict like-for-like comparison would move the numbers by a few percent. It would not change the story.

The $714 million assumes ACC paid every dollar at exactly 80% of pre-injury earnings. Real payments vary. Some sit at the minimum rate, some hit the maximum cap, and 2024/25 included large backdated payments after a Court of Appeal ruling. Capped payments push the true gap above $714 million. Minimum-rate payments to low earners pull it down. ACC does not publish how its payments split by income level, so we cannot tell which effect wins.

The $192 a day figure is the weakest number here. It divides a 2024/25 payment total by day counts from calendar 2025, and the 14.9 million days cover only the four settings ACC chose to itemise, which may not be every day of weekly compensation it paid. Treat it as a rough sense of scale, not a precise rate.

The first week is not in the $714 million at all, so the real uncovered total is higher. Add whatever that first week costs across more than 107,000 new weekly compensation claims a year (the same ACC weekly compensation page).

Finally, we read ACC's newsroom page and its Annual Report directly. We did not get hold of the full Injuries in New Zealand report as a separate document, so every figure credited to that report here is as ACC summarised it on its own newsroom page.

What this means for your cover

ACC pays for accidents, not illness, and it stops at a published ceiling. Income protection is the cover that answers both. Income protection in New Zealand

Sources

Every source below was read and checked on 21 August 2026.

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