WORKERS' COMPENSATION VERSUS INCOME PROTECTION
If you are relying on the Workers’ Compensation scheme as adequate cover against becoming disabled, you may be compromising the financial wellbeing of your family.
Workers’ compensation is designed to protect employers from employee workplace related claims. It’s not an all-purpose income protection cover as most illnesses and injuries occur outside the workplace and if you’re a sole trader or in a partnership you are unlikely to even be covered by workers’ compensation.
Where do illnesses and injuries happen?
75% of injuries in Australia happen outside of work# and from those that do suffer an injury at work, 36% do not receive any financial assistance*.
Over 2.6 million Australians aged under 65 are living with a physical disability^, with many including conditions like cancer, stroke, heart disease and depression that in most cases will not be covered by Workers Compensation.
Income Protection Cover
Income Protection cover can pay benefits of up to 75% of your income to help you and your family meet the cost of living if you are injured or ill. It is usually tax deductible, provides 24/7 cover, and whether the illness or injury happens at work is irrelevant.
There are other types of cover that you may wish to consider too, such as Critical Illness cover and Total & Permanent Disability. All are designed to help you financially if you can’t work due to illness or injury.
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# 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/abs@.nsf/mf/4825.0.55.001/ accessed on 30 August 2012.