Not being able to work due to illness or injury can put you in an incredibly difficult situation. Luckily, there is something that you can do about it. Income protection pays part of your income if you are unable to work. This will help you deal with bills and expenses while you focus on recovering.
Income protection is a form of insurance that can be quite helpful if you find yourself in a financial bind. However, despite how useful it is, it’s important to note that only 31% of Australians have income protection insurance.
One of the main reasons people don’t have this type of coverage is the lack of information. This is why we thought it would be helpful to put out a brief breakdown of everything you need to know about income protection. So, if this is something that you’re interested in, read on to learn more about what income protection is and how to claim it.
What is Income Protection?
Income protection is a type of insurance that covers part of your income when you cannot work. To be more specific, income protection insurance will pay up to 85% of your pre-tax income for a specific period if you’re unable to work because of a grave illness or disability. Each insurance provider has its own definition of what a grave illness or disability is, so it’s best to check your insurer’s website before making a claim. Another thing you have to note is that total or permanent disability falls under a different type of insurance that will also replace the income that is lost.
Income protection is quite useful if you have family members or dependents that rely on your income or if you have debt that you need to continuously make payments on even when you’re unable to work.
Additionally, it’s also worth noting that most employees will also have income protection cover under their superannuation policy which can be accessed during challenging times. These super funds are usually called different names—salary continuance insurance, temporary salary continuance or total but temporary disablement.
What Are the Types of Benefits?
There are two types of income protection benefits that you have to know about. They’re differentiated by the severity of your disability, illness, or injury.
Total disability benefit is payable if you are deemed to be totally disabled. This means an injury or illness has made it impossible for you to perform one or more of your responsibilities at your current place of employment.
On the other hand, partial disability benefit is payable if you are partially disabled for at least 10 to 14 consecutive days. In general, partial disability means that you cannot accomplish your duties at work due to an illness or injury that you sustained.
How Can Income Protection be Claimed?
Claiming income protection is quite simple and can be summed up in three steps:
- The first thing you have to do is inform your employer and insurer of the illness or injury preventing you from working.
- The insurer will then send you paperwork that you have to accomplish, including a salary continuance report, a tax file number declaration form, and a claim form.
- Once you’ve completed all the necessary documentation, your insurer will then assess your claim.
It’s also important to note that many industrial agreements oblige employers to cover their workers for income protection. This is sometimes referred to as salary continuance. It would be best to consult with an employment lawyer so that you don’t miss out on this benefit. If you’re looking for an employment lawyer in Perth, don’t hesitate to reach out to us.
Conclusion
We hope this article has helped shed some light on income protection. If you ever find yourself in a difficult financial situation due to unforeseen accidents or illnesses, be sure to use this information to get the protection you deserve.
If you find yourself in a legal battle against your former company, you need legal counsel from employment lawyers in Perth. Our experts at Workclaims Australia provide legal advice and represent parties for any employment discrepancy that requires legal intervention. Call us today for a consultation about your case!
