The short answer
ACC covers injury caused by an accident. It does not cover illness. If you are off work because of cancer, a stroke, a heart condition, multiple sclerosis, mental illness, or degenerative back or joint pain that did not come from a specific accident, ACC pays you nothing.
In that situation your income falls back on sick leave (a statutory minimum of 10 days a year), then annual leave, then savings, then a means-tested benefit. For most working households that runway is measured in weeks.
Last reviewed 2026-07-30
What ACC does cover — credit where it is due
ACC is genuinely one of the better schemes in the world and it is easy to undersell it. If you are injured in an accident in New Zealand — at work, at home, on the road, playing sport — ACC generally covers treatment costs and pays weekly compensation at up to 80% of your pre-injury income after a stand-down, for as long as the injury keeps you off work.
It applies to everyone: employees, self-employed, visitors, children, people who were entirely at fault. There is no claim against anyone. That is the trade — New Zealanders gave up the right to sue for personal injury.
Where the line actually falls
| Situation | ACC? |
|---|---|
| Broke your leg mountain biking | Covered |
| Back injury from a specific lifting incident at work | Usually covered |
| Back pain that came on gradually over years | Usually not covered |
| Cancer — almost all forms | Not covered |
| Heart attack or stroke with no accident cause | Not covered |
| Heart attack caused by a work accident | May be covered |
| Depression or anxiety on its own | Not covered |
| Mental injury caused by a covered physical injury | May be covered |
| Complications of surgery (treatment injury) | Often covered |
| Arthritis, MS, diabetes and other degenerative or systemic illness | Not covered |
| Illness contracted overseas | Not covered |
General position under the Accident Compensation Act 2001, current as at July 2026. ACC decisions are made case by case — see acc.co.nz for your own situation.
ACC is an accident scheme wearing a name that sounds like it covers everything.
Three specific traps
1. "Gradual process" back and joint pain
This is the most common surprise. People assume a back injury is a back injury. ACC distinguishes between an injury from an identifiable accident and a condition that developed gradually — and gradual-process claims are declined routinely unless they meet a narrow work-related test. Yet gradual musculoskeletal pain is one of the leading causes of long-term work absence in this country.
2. Self-employed people who never sorted their cover level
If you are self-employed, ACC's standard cover (CoverPlus) pays based on your last filed tax return. Have a quiet year, a start-up year, or a year where you paid yourself in dividends rather than salary, and your ACC entitlement can be far below what you actually live on. CoverPlus Extra lets you agree a fixed cover amount in advance — but you have to ask for it, and a great many contractors never do.
3. Assuming 80% is 80% of what you spend
Weekly compensation is 80% of pre-injury earnings, and it is taxable. For a household running close to its income, losing 20% plus any overtime, commission or contracting variability is not a rounding error.
What people use to fill the gap
- Income protection — the direct answer. It pays for illness as well as injury, which is the whole point. Most policies offset against ACC so you are not paid twice, and that offset is a good thing: it is why the premium is affordable.
- Trauma cover — pays a lump sum on diagnosis of a listed condition, regardless of whether you can work. It covers the immediate cash shock: travel to treatment, a partner dropping to part time, drugs Pharmac does not fund.
- Health insurance — does not replace income, but shortens the time you are off it by getting you treated sooner.
How to check your own exposure in five minutes
- Find your last payslip. How many sick days do you actually have banked?
- Add annual leave. That is your real runway before savings.
- Look at your monthly outgoings — mortgage or rent, insurance, power, food, childcare. That is the number that does not stop.
- Divide savings by that number. That is how many months you have.
- If it is under six, you have found the thing worth looking at first.
The income protection calculator does steps 2 to 5 for you.
Common follow-up questions
Does ACC cover cancer?
No, not in the ordinary case. Cancer is an illness, not an injury, so it falls outside ACC. The narrow exceptions are work-related cancers caused by proven occupational exposure to a listed substance, and cancer caused by a treatment injury. For almost everyone diagnosed with cancer in New Zealand, ACC pays nothing toward lost income.
If ACC declines me, can I do anything?
Yes. ACC decisions can be formally reviewed, and a meaningful share of reviewed decisions are overturned. There are free advocacy services. This is separate from insurance, but worth knowing before you accept a decline.
Do I still need income protection if I have ACC levies deducted?
Paying ACC levies gives you accident cover. It does nothing for illness. Whether you need income protection on top depends on how long your household could absorb an illness with no income — which is a maths question, not a sales question.
Does income protection pay on top of ACC?
Usually not — most policies offset, meaning they top you up to your covered percentage rather than paying in full alongside ACC. Some policies are written to pay a proportion regardless. This is a real difference between policies and worth checking on the wording rather than the brochure.
Keep reading
This page is general information about how insurance works in New Zealand. It is not regulated financial advice and it does not take your situation into account. For advice about your own cover, talk to a licensed financial adviser.