There is a common misconception that workers' compensation cover is sufficient to look after you in the event that you are unable to work.
The reality is that workers compensation is there to protect employers from workplace claims from employees, please do not make the mistake of thinking that as you are covered by workers' compensation then you do not need income protection insurance.
Income Protection vs Workers’ Compensation
Workers’ Compensation has different benefits and laws in each state but the key differences between the two types of cover are as follows:
Workers' compensation as stated above is designed to protect employers from employee workplace related claims. This does vary by state however an example of coverage is due to recent legislative change in NSW travel to and from work is no longer covered.
There are generally four types of payments if injured at work:
• Income replacement
• Permanent impairment
• Death benefits
• Medical expenses
There is generally a capping of the benefit period after 130 weeks unless the person is totally incapacitated, or if partially fit to work – they are working at least 15 hours per week.
Benefit Payments generally vary depending on length of time on claim and whether client is
totally unfit to work or meets partial incapacity. Generally the amount reduces after 13 weeks on claim.
One benefit to employees is that employers foot the bill for this cover.
Income protection insurance on the other hand is designed to protect your most important asset being your income. It replaces up to 75% of income to cover bills and other day to day expenses.
Cover is 24 hours a day, 365 days a year anywhere in the world and is used for when you are sick or injured and unable to work. Benefits vary dependant on contract but can be paid to age 70. Premiums are tax deductible and cost as little as $4 per day.
Please note for sole traders and partnerships workers' compensation doesn't apply whereas income protection is available.
To support the need for Income Protection please consider the following facts -
• 75% of Australians that were injured between 2005 – 2006, suffered the injury outside of work^
• Less than 36% of people receiving financial assistance following a work-related injury, received financial assistance through Workers’ Compensation*
• Over 2.6 million Australians aged under 65 are living with a physical disability#, including conditions like cancer, stroke, heart disease and depression, that in many cases will not be covered by Workers’ Compensation.
One of the key points from my perspective is that as the employer is footing the bill then it is essentially common sense to assume cover will only look after you at work.
Let myself, Sean Thomas from Southern Advisory review your specific situation to ensure you have some cover in place. Call 0405 313 630 or email me [email protected].
# AIHW (2008) Australia’s Health 2008, Cat. no. AUS 99, Canberra
* Australian Bureau of Statistics, Work-Related injuries 2009 – 2010.
^ http://www.abs.gov.au/ausstats/[email protected]/mf/4825.0.55.001/accessed
on 30 August 2012.
Disclaimer
The information on these pages is provided in good faith and is to the best of our knowledge accurate. We provide it without any warranty as to its correctness of statement or opinion or its suitability for any particular purpose. Any advice on this blog/website is of necessity general in nature and not specifically tailored to suit differing individual circumstances. For that, you must seek and we advise that you do seek financial advice from a licensed professional. Sean Thomas can accept no liability for any decisions that you may make based on the information on this blog/website
The reality is that workers compensation is there to protect employers from workplace claims from employees, please do not make the mistake of thinking that as you are covered by workers' compensation then you do not need income protection insurance.
Income Protection vs Workers’ Compensation
Workers’ Compensation has different benefits and laws in each state but the key differences between the two types of cover are as follows:
Workers' compensation as stated above is designed to protect employers from employee workplace related claims. This does vary by state however an example of coverage is due to recent legislative change in NSW travel to and from work is no longer covered.
There are generally four types of payments if injured at work:
• Income replacement
• Permanent impairment
• Death benefits
• Medical expenses
There is generally a capping of the benefit period after 130 weeks unless the person is totally incapacitated, or if partially fit to work – they are working at least 15 hours per week.
Benefit Payments generally vary depending on length of time on claim and whether client is
totally unfit to work or meets partial incapacity. Generally the amount reduces after 13 weeks on claim.
One benefit to employees is that employers foot the bill for this cover.
Income protection insurance on the other hand is designed to protect your most important asset being your income. It replaces up to 75% of income to cover bills and other day to day expenses.
Cover is 24 hours a day, 365 days a year anywhere in the world and is used for when you are sick or injured and unable to work. Benefits vary dependant on contract but can be paid to age 70. Premiums are tax deductible and cost as little as $4 per day.
Please note for sole traders and partnerships workers' compensation doesn't apply whereas income protection is available.
To support the need for Income Protection please consider the following facts -
• 75% of Australians that were injured between 2005 – 2006, suffered the injury outside of work^
• Less than 36% of people receiving financial assistance following a work-related injury, received financial assistance through Workers’ Compensation*
• Over 2.6 million Australians aged under 65 are living with a physical disability#, including conditions like cancer, stroke, heart disease and depression, that in many cases will not be covered by Workers’ Compensation.
One of the key points from my perspective is that as the employer is footing the bill then it is essentially common sense to assume cover will only look after you at work.
Let myself, Sean Thomas from Southern Advisory review your specific situation to ensure you have some cover in place. Call 0405 313 630 or email me [email protected].
# AIHW (2008) Australia’s Health 2008, Cat. no. AUS 99, Canberra
* Australian Bureau of Statistics, Work-Related injuries 2009 – 2010.
^ http://www.abs.gov.au/ausstats/[email protected]/mf/4825.0.55.001/accessed
on 30 August 2012.
Disclaimer
The information on these pages is provided in good faith and is to the best of our knowledge accurate. We provide it without any warranty as to its correctness of statement or opinion or its suitability for any particular purpose. Any advice on this blog/website is of necessity general in nature and not specifically tailored to suit differing individual circumstances. For that, you must seek and we advise that you do seek financial advice from a licensed professional. Sean Thomas can accept no liability for any decisions that you may make based on the information on this blog/website
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