Individuals with chronic diseases or who are at higher risk of illness may have already considered planning for illness. However, in light of the COVID-19 pandemic, preparing for illness can be useful whether or not you have an existing illness. If you fall ill, you most likely won’t be in the fittest position to consider your finances, so it’s a good idea to be aware of your options early.
Income protection insurance can provide you with payments of up to 85% of your pre-tax income for a set period of time if you are unable to work as a result of a sudden illness or injury. Income protection insurance covers things like prolonged illness and total or severe partial disablement, however, it does not cover situations such as redundancy, voluntary resignation from work, pre-existing conditions, or regular pregnancies. It may be particularly useful in the event that you:
- Are self-employed or are a small business owner because you may not have sick or annual leave.
- Have dependents or family members that rely on your income.
- Have debt that requires you to make repayments even if you are unable to work, such as a mortgage.
Accessing your super
There are limited circumstances in which you can access your super before you reach your preservation age or retire. However, you may apply for early release for the following reasons:
- Incapacity – when you are unable to work at all or need to work fewer hours due to a medical condition.
- Terminal medical condition – where you have a terminal illness or injury.
- Compassionate grounds – where you need to pay for expenses such as medical treatment or modifying your living situation or vehicle due to a severe disability.
Sick and carers leave
Sick and carers leave, or personal leave allows an employee to take time off in order to deal with personal illness, caring responsibilities and family emergencies. All employees except casuals are entitled to this leave.
Full-time and part-time employees are entitled to 10 days of sick and carer’s leave for each year of employment. However, if employees and employers have a registered agreement, award or contract, they can set out different entitlements of paid sick and carers leave as long as the amount isn’t less than the minimum 10 days. Employees accumulate sick and carer’s leave during each year of employment and the balance at the end of each year carries over to the next year.
When you are still unable to work due to an illness after you have run out of sick leave, you can take up to three months of unpaid sick leave. You cannot be dismissed from your job for this period, given that you can provide evidence of your illness.
In response to COVID-19, from 8 April 2020 the Fair Work Commission made determinations varying 99 awards with the addition of unpaid pandemic leave. Employees who are employed under one of the affected awards will be able to access up to 2 weeks of unpaid pandemic leave if they have been prevented from working as a result of:
- being required to self-isolate by government or medical authorities, or
- measures taken by the government or medical authorities. This can include enforceable government directions restricting the operations of non-essential businesses.
Full-time, part-time, and casual employees are entitled to the unpaid pandemic leave in full, without having to accrue it. The unpaid pandemic doesn’t affect other paid or unpaid leave entitlements, as employees do not have to use all their paid leave before accessing the unpaid pandemic leave.