Work and money while sick
Sick leave, income protection, TPD inside super, the Australian safety net. What kicks in, when, and how to claim without being fobbed off.
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§ Journey
Sick leave, income protection, TPD inside super, the Australian safety net. What kicks in, when, and how to claim without being fobbed off.
The first time I worked out what my own income protection actually paid, what my super's TPD covered, and what Centrelink would do if both fell through, I'd been in the workforce for nineteen years and never once read the fine print. Most men I know are in the same position. We pay the premiums for two decades and discover the policy at the moment we need to claim it. That's the wrong order.
This module is the Australian safety net in plain English: the layers, what each one pays, when it kicks in, and how to claim without being fobbed off. Read it once now, even if your situation isn't urgent yet. The scenarios you don't expect are the ones that catch men out hardest.
When a serious illness stops you working, your income gets replaced (or partially replaced) from up to four sources, in this order:
Each layer has a wait, a cap, and a definition of "sick enough" that determines what you get. The order matters because you almost always have to claim them in sequence.
Under the National Employment Standards, full-time employees get a minimum of 10 days paid personal/carer's leave a year, accruing pro-rata, with unused leave rolling over indefinitely. If you've been somewhere five years, you may have 50+ days banked. Check your payslip; the balance is on it.
Two practical things:
If you run out of paid leave and need more time, your employer is not legally required to give you unpaid leave for a serious illness beyond what the Fair Work Act and your contract specify. Most decent employers will extend; some won't. Get the answer in writing before you assume.
This is the layer most men have without knowing the details. Income protection (IP) is a monthly benefit paid if you can't work due to illness or injury, usually 75-85% of your pre-tax income, after a waiting period (typically 30 or 90 days), payable until you return to work or hit the benefit period (usually to age 65, sometimes 2 or 5 years).
Three places it might be sitting:
How to find out what you've actually got:
When you claim, you'll need:
The waiting period is the crucial number. If your IP has a 90-day wait and you've only got 30 days of sick leave, there is a 60-day gap where nothing's coming in. Plan around it. Either run a small emergency fund, ask your employer for an early payment of accrued leave, or stretch it with savings.
A note on definitions. IP policies pay if you can't perform your own occupation (the job you were doing) or any occupation (any reasonable job for someone with your skills). Own-occupation is the better definition because it pays out in more scenarios. Many cheaper policies are any-occupation by default. Read your policy summary. The word matters.
Total and Permanent Disability (TPD) cover sits inside almost every super fund by default. It's a lump sum (commonly $100k-$500k, sometimes more for higher-balance accounts) paid if you can never return to your usual or any occupation due to illness or injury.
The two definitions, which matter a lot:
When to claim TPD:
How to claim, in plain steps:
A handful of men I know have been initially declined on TPD and won on AFCA review. The first decision is not always the final one.
If you have no IP, your TPD is being processed (or was declined), and your sick leave is gone, the Centrelink layer exists.
The two products that matter:
Practical: most men in the first year of a serious diagnosis end up on JobSeeker with a medical exemption rather than DSP, simply because DSP requires evidence of permanence that takes time to accumulate.
When the diagnosis hits and you can't work: use sick leave first. Apply for income protection inside the IP waiting period (don't wait until sick leave runs out, the paperwork takes weeks). Bridge the gap between sick leave ending and IP starting with savings or accrued leave. If the illness becomes long-term, start the TPD claim, knowing it will take months. If everything else fails or stalls, apply for JobSeeker with a medical certificate.
The "I'll claim later when it's serious" trap. Insurance claims are notification-sensitive. Some policies require notification within a fixed number of days of becoming unable to work. Late notification is a reason insurers cite to reduce or deny benefits. Notify early, even if you might not need to claim.
The "I don't want to use my sick leave in case I need it later" trap. You earned it. It's there for this. Save the heroics for when you're back at work.
The "the insurer will sort it out" trap. They will, eventually, if you push. They will not, if you don't. A claim that's been "in review" for four months almost always speeds up the day you ring and ask for a written status update. The squeaky claim gets paid first.
A diagnosis doesn't automatically translate into income. The system pays when you operate it.
Layer your claims. Read your policies. Push the paperwork.
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