Clankaroo Posted August 7, 2015 Share Posted August 7, 2015 Hi all, This is a what-if question, not a real case. I checked what financial support you get if you get a long-term sickness and this looks quite scary : - 10 days paid by the employer, so clearly this applies to short-term sickness like colds, flu, etc. - sickness allowance paid by state : 520 aud fortnightly for a single person without children. They seem to check for assets before paying.. - waiting period for new immigrants : 2 years (!) Sydney being such an expensive city, I have no idea how someone could survive with 12.000 aud/year should this unlucky person have a sickness like cancer, need multiple surgery after an accident or get some other illness that would prevent him/her from working for a year or more. FYI the lifetime risk of getting a cancer is +- 40%. I come from a country in Europe where the protection in case of sickness is much better and the cost of living much lower. Is this really that bad or am I missing something here ? Thanks, Link to comment Share on other sites More sharing options...
Marisawright Posted August 7, 2015 Share Posted August 7, 2015 No, you're not missing anything. Sensible people take out Income Protection Insurance to cover for that eventuality. Link to comment Share on other sites More sharing options...
Parley Posted August 7, 2015 Share Posted August 7, 2015 You can purchase income protection insurance if you think you need it. Link to comment Share on other sites More sharing options...
Suzukiscottie Posted August 7, 2015 Share Posted August 7, 2015 Consider income protection insurance. Link to comment Share on other sites More sharing options...
Booma Posted August 7, 2015 Share Posted August 7, 2015 it depends who you work for. i get 20 sick days every year but they are accumulative so i have 80 days at the moment on full pay or 160 at half pay. my brother in law gets unlimited sick leave as long as he has a certificate from a doctor. Link to comment Share on other sites More sharing options...
kevsan Posted August 7, 2015 Share Posted August 7, 2015 and for serious issues you could look as critical illness cover etc as part of your life assurance package Link to comment Share on other sites More sharing options...
Clankaroo Posted August 7, 2015 Author Share Posted August 7, 2015 Is income protection insurance tax-deductible ? How common is it in Australia/Sydney to take out such an insurance ? Do you still get sickness allowance paid if you have taken out such an insurance ? It seems to me it's nearly mandatory in Sydney if you're serious about personal risk management, particularly if you have to pay a rent/mortgage. Link to comment Share on other sites More sharing options...
bristolman Posted August 7, 2015 Share Posted August 7, 2015 Is income protection insurance tax-deductible ? How common is it in Australia/Sydney to take out such an insurance ? Do you still get sickness allowance paid if you have taken out such an insurance ? It seems to me it's nearly mandatory in Sydney if you're serious about personal risk management, particularly if you have to pay a rent/mortgage. Sydney is a very expensive place to live so it makes sense to take whatever measures you can to safeguard your income in case of unforseen circumstances. Link to comment Share on other sites More sharing options...
Ken Posted August 7, 2015 Share Posted August 7, 2015 Is income protection insurance tax-deductible ? Yes (assuming it will produce taxable income upon a claim) Link to comment Share on other sites More sharing options...
Guest Posted August 7, 2015 Share Posted August 7, 2015 I found this quite a shock too, I was used to 6 months on full pay, 6 months on half pay and to then find I only had 10 days was quite unreal - they did accumulate but still. I did find that my pension had optional insurances though and of course you can pay for any additional insurance you want - income protection plans are very expensive though especially if you want them to pay out sooner than 6 months on sick leave & in any case I was declined - no reason given (they don't need to) but I suspect it was because I had previously taken anti-depressants (never hospitalised or under psychiatric care just a simple episode of PND). I was perfectly well when we moved to Australia but was subsequently diagnosed with Rheumatoid arthritis, it really was a wake up call on how financially difficult it is to be chronically ill in Australia with gap payments and prescription charges. My son also has a chronic disorder so we had a double whammy of charges. Link to comment Share on other sites More sharing options...
Parley Posted August 7, 2015 Share Posted August 7, 2015 Insurance is appropriate. It is unrealistic to expect the taxpayer to always pick up the tab. The country can't afford it. Most insurance companies don't pay out until 6 months after illness. So it is rare to be in that situation where you are off sick for over 6 months. But it is worth considering if you have a large mortgage and are th main/only breadwinner. Link to comment Share on other sites More sharing options...
Peach Posted August 7, 2015 Share Posted August 7, 2015 Must be just me that is happy with the cover my super fund provides: (iii) What are Total and Temporary Disability (TTD) Benefits? Some funds have weekly or monthly payments if you can’t do your usual job. these are called total or temporary disaibility (TTD) benefits or salary continuance or income protection payments. The payments can be up to 75% of your wage plus super and might be paid for up to 2 years - or perhaps even up to age 65. There is usually a qualifying period of 1, 2 or 3 months before payments can start. Payments are usually offset against workers’ compensation and sometimes transport accident and Centrelink payments. Temporary payments might stop if your employment is terminated or if you are paid a TPD benefit or if you get a Common Law sum-but not always. . (iv) Automatic Cover Most employment super funds provide disability cover without any health questions - up to certain limits. This means that if you already had an injury or illness before you joined the fund, you will still be covered for disability benefits - including if you stop work because of your injury or illness. However if you want extra cover, you may have to fill in a health questionnaire. Link to comment Share on other sites More sharing options...
Marisawright Posted August 7, 2015 Share Posted August 7, 2015 Is income protection insurance tax-deductible ? - yes, it is.How common is it in Australia/Sydney to take out such an insurance ? -it's not all that common, but that's only because people think "it won't happen to me" Do you still get sickness allowance paid if you have taken out such an insurance ? - possibly, it depends how long the waiting period is before it kicks in. It seems to me it's nearly mandatory in Sydney if you're serious about personal risk management, particularly if you have to pay a rent/mortgage. The thing with income protection is that once active, it normally continues to pay until retirement age - so it would be silly to worry about whether it will affect sickness alllowance in the short term. And yes, I agree that any sensible person should take out income protection insurance, either direct or through their superannuation fund. Sometimes the cover through the super fund is quite limited so it's always worth checking the detail. Link to comment Share on other sites More sharing options...
Bungo Posted August 7, 2015 Share Posted August 7, 2015 Is income protection insurance tax-deductible ? How common is it in Australia/Sydney to take out such an insurance ? Do you still get sickness allowance paid if you have taken out such an insurance ? It seems to me it's nearly mandatory in Sydney if you're serious about personal risk management, particularly if you have to pay a rent/mortgage. Why would insurance be tax deductible.. of course it is not, no more than your car insurance is.. But the situation is not as dire as you would think. Firstly you accumulate sick leave, so as long as you are not using up your ten days with a day here and there it will soon add up in order to cover the more prolonged illness. Also superannuation is compulsory in Australia and this would normally have some sickness related insurance that will pay out an income to cover lost earnings in the case of extended illness. Link to comment Share on other sites More sharing options...
Lbaines Posted August 7, 2015 Share Posted August 7, 2015 Why would insurance be tax deductible.. of course it is not, no more than your car insurance is.. But the situation is not as dire as you would think. Firstly you accumulate sick leave, so as long as you are not using up your ten days with a day here and there it will soon add up in order to cover the more prolonged illness. Also superannuation is compulsory in Australia and this would normally have some sickness related insurance that will pay out an income to cover lost earnings in the case of extended illness. Actually a lot of income protection premiums are tax deductible I received 30% of mine and my husbands premium back this year. https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Other-deductions/Income-protection-insurance/ Link to comment Share on other sites More sharing options...
Marisawright Posted August 7, 2015 Share Posted August 7, 2015 Why would insurance be tax deductible.. of course it is not, no more than your car insurance is.. But the situation is not as dire as you would think. Firstly you accumulate sick leave, so as long as you are not using up your ten days with a day here and there it will soon add up in order to cover the more prolonged illness. Also superannuation is compulsory in Australia and this would normally have some sickness related insurance that will pay out an income to cover lost earnings in the case of extended illness. Income Protection Insurance is most definitely tax deductible. Yes you accumulate sick leave, but that doesn't help in the early years - you can always cancel the insurance once you feel you have a comfortable buffer. The income protection insurance offered along with your super isn't always adequate: it may cover disability only, for instance. Link to comment Share on other sites More sharing options...
Peach Posted August 7, 2015 Share Posted August 7, 2015 Why would insurance be tax deductible.. The logic is that if you have taken out insurance you are less likely to be a burden on the tax payer, so are offered a tax incentive to take the insurance - I believe you can choose to to get the relief on the premium or the pay out... Link to comment Share on other sites More sharing options...
JockinTas Posted August 7, 2015 Share Posted August 7, 2015 No, you're not missing anything. Sensible people take out Income Protection Insurance to cover for that eventuality. Absolutely! That's something we made sure we had. Happily, never needed to use it. Link to comment Share on other sites More sharing options...
Guest Posted August 7, 2015 Share Posted August 7, 2015 Must be just me that is happy with the cover my super fund provides: (iii) What are Total and Temporary Disability (TTD) Benefits? Some funds have weekly or monthly payments if you can’t do your usual job. these are called total or temporary disaibility (TTD) benefits or salary continuance or income protection payments. The payments can be up to 75% of your wage plus super and might be paid for up to 2 years - or perhaps even up to age 65. There is usually a qualifying period of 1, 2 or 3 months before payments can start. Payments are usually offset against workers’ compensation and sometimes transport accident and Centrelink payments. Temporary payments might stop if your employment is terminated or if you are paid a TPD benefit or if you get a Common Law sum-but not always. . (iv) Automatic Cover Most employment super funds provide disability cover without any health questions - up to certain limits. This means that if you already had an injury or illness before you joined the fund, you will still be covered for disability benefits - including if you stop work because of your injury or illness. However if you want extra cover, you may have to fill in a health questionnaire. I douubt your super fund is providing that it will be an insurance policy linked with your super but you are paying for it! It might even be cheaper to pay directly, I was also happy with the optional cover that came with my super but I would seek advice from an IFA before allowing your super adviser to keep taking insurance deductions directly. Link to comment Share on other sites More sharing options...
Peach Posted August 7, 2015 Share Posted August 7, 2015 I douubt your super fund is providing that it will be an insurance policy linked with your super but you are paying for it! It might even be cheaper to pay directly, I was also happy with the optional cover that came with my super but I would seek advice from an IFA before allowing your super adviser to keep taking insurance deductions directly. Employer actually pays all my super insurance / fees - but is of course part of my total remuneration package, so is sure to be at my cost somewhere. IFA (who's fees are also a deductible) advises that buying through super is pre-tax and therefore efficient way of doing it -- moot because as I say employer covers that aspect. Link to comment Share on other sites More sharing options...
newjez Posted August 7, 2015 Share Posted August 7, 2015 Hi all, This is a what-if question, not a real case. I checked what financial support you get if you get a long-term sickness and this looks quite scary : - 10 days paid by the employer, so clearly this applies to short-term sickness like colds, flu, etc. - sickness allowance paid by state : 520 aud fortnightly for a single person without children. They seem to check for assets before paying.. - waiting period for new immigrants : 2 years (!) Sydney being such an expensive city, I have no idea how someone could survive with 12.000 aud/year should this unlucky person have a sickness like cancer, need multiple surgery after an accident or get some other illness that would prevent him/her from working for a year or more. FYI the lifetime risk of getting a cancer is +- 40%. I come from a country in Europe where the protection in case of sickness is much better and the cost of living much lower. Is this really that bad or am I missing something here ? Thanks, Even in Europe it depends who you work for. With bank of America I got ten days full pay, then, 6 months at 75%. Which meant I had to work through chemo which was hard. When I hit remission, they made me redundant. But I got a job with one of those nasty profit maximising (5%) energy companies that treat people like humans, and they give me six months full, 6 months half. Link to comment Share on other sites More sharing options...
Guest The Pom Queen Posted August 7, 2015 Share Posted August 7, 2015 Can you get IPS to cover existing illness after a waiting period? I can't get travel nor life insurance at the moment. Link to comment Share on other sites More sharing options...
Peach Posted August 7, 2015 Share Posted August 7, 2015 Can you get IPS to cover existing illness after a waiting period? I can't get travel nor life insurance at the moment. I keep telling ya, high sex drive isn't an illness. But if you're looking for an outlet x x x Link to comment Share on other sites More sharing options...
Marisawright Posted August 7, 2015 Share Posted August 7, 2015 Can you get IPS to cover existing illness after a waiting period? I can't get travel nor life insurance at the moment. There's usually a medical with IPS and if they do accept a pre-existing illness, you'll pay a higher premium. Another reason, actually, to take out your own IPS: I took out IPS when I first arrived in Oz and got it easily, because at that point my childhood asthma hadn't recurred and I got a clean bill of health. Fast forward only 5 years and my asthma was back with a vengeance - but the conditions of the IPS was that I didn't have to do any further medicals, so I kept that cover all the way through to age 60. Link to comment Share on other sites More sharing options...
Guest Posted August 7, 2015 Share Posted August 7, 2015 There's usually a medical with IPS and if they do accept a pre-existing illness, you'll pay a higher premium. Another reason, actually, to take out your own IPS: I took out IPS when I first arrived in Oz and got it easily, because at that point my childhood asthma hadn't recurred and I got a clean bill of health. Fast forward only 5 years and my asthma was back with a vengeance - but the conditions of the IPS was that I didn't have to do any further medicals, so I kept that cover all the way through to age 60. Yes, I cancelled my UK policy, had cover via my super in Australia and it cost me dearly as I had been diagnosed with RA by then - a relatively modest level of cover now costs me over £250 a month and was a right palaver to arrange. Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.