Work and money while sick

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.

The four-layer Australian safety net

When a serious illness stops you working, your income gets replaced (or partially replaced) from up to four sources, in this order:

1. Sick leave (employer-funded, NES minimum 10 days/year, unused leave accumulates).
2. Income protection insurance (private, monthly benefit, usually 75-85% of pre-tax salary).
3. TPD inside super (lump sum, paid if you can't return to your usual or any occupation).
4. Centrelink JobSeeker / Disability Support Pension (means-tested, last-resort safety net).

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.

Layer 1: Sick leave

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:

• You can typically use sick leave consecutively. Burning two weeks for surgery and recovery is normal. Get a medical certificate from your GP for any absence over two days. Keep a copy.
• Long-service leave kicks in after 7-10 years (varies by state). Once eligible, it's typically 2 months at full pay per 10 years' service, pro-rata. If you're long-tenured, this is real money. Use it after sick leave, before income protection.

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.

Layer 2: Income protection insurance

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:

• Inside your super fund (default cover for most large funds, often basic and capped).
• A standalone retail policy (more comprehensive, usually broker-arranged).
• Through your employer (group cover, sometimes generous, sometimes minimal).

How to find out what you've actually got:

1. Log into your super fund's member portal. Look for "insurance" or "cover summary." Note the IP benefit, waiting period, and benefit period.
2. Check your last few payslips for any deductions for IP (in some workplaces it's salary-sacrificed).
3. Search your email for any standalone policy documents. They usually arrive annually.
4. If you used a financial adviser to set up your insurance, call them. They have the schedule on file.

When you claim, you'll need:

• Your policy number and the insurer's claim form.
• A medical certificate or specialist letter confirming you can't work.
• Proof of income (recent payslips, last tax return).
• A claim statement from your employer confirming you're off work.

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.

Layer 3: TPD inside super

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:

• TPD-Own occupation. Pays if you can't perform your specific job ever again. Easier to claim. Less common in default super cover.
• TPD-Any occupation. Pays if you can't perform any job for which you are reasonably suited by training, education or experience. Harder threshold. The default in most industry super funds.

When to claim TPD:

• After you've exhausted sick leave and IP.
• When the medical evidence supports the conclusion that you can't return to work, not just "for now" but for the long-term.
• Often months or years into the illness, not in the first weeks.

How to claim, in plain steps:

1. Contact your super fund's claims team. Most have a dedicated claims line.
2. Request the TPD claim pack. They'll send forms, including a treating doctor's statement, your own statement, and (often) an employer statement.
3. Get your specialist and GP to complete the medical sections. This is where most claims slow down. Stay on top of it.
4. Submit. Expect 3-6 months for a decision on a clean claim, longer if disputed.
5. If declined, you can request internal review and, if that fails, escalate to AFCA (the Australian Financial Complaints Authority) for free.

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.

Layer 4: Centrelink

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:

• JobSeeker Payment (formerly Newstart / Sickness Allowance). Means-tested, partner's income counts. If you have a medical certificate showing you can't work, you can be exempt from mutual obligation requirements while you recover. The payment is modest; it is a floor, not a wage.
• Disability Support Pension. For long-term, permanent inability to work. Higher payment than JobSeeker but harder to qualify for; you need substantial medical evidence of permanent impairment. The application process is long.

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.

The order of operations, in one paragraph

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.

What to do this week, regardless of urgency

• Find your IP policy. Log in. Note the benefit, waiting period, definition (own/any occupation), and insurer name. Save the schedule to your one folder.
• Find your TPD cover. Same exercise. Note the lump sum and definition.
• Check sick and long-service leave balances. Payslip or HR portal.
• Tell your partner where these things live. If you're the one who pays the bills and tracks the policies, your partner needs to know how to reach all of it. Today, ideally.

Three traps in the system

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.

Further watching

• How much insurance is enough? Life cover, income protection and TPD
• How to make a claim on income protection and life insurance