September 2016 Video Blog #7- Income Protection Vs Workers’ Compensation

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September 2016 Video Blog #7- Income Protection Vs Workers’ Compensation

Employees may not have sufficient cover if they believe
their Workers’ Compensation cover alone is sufficient.
The reality is that income protection and Workers’ Compensation
are separate and very different types of cover. Workers’
Compensation payments may not meet people’s financial needs
in a number of events.
Workers’ Compensation cover is designed to protect employers
from workplace claims from employees. It’s not an income
protection cover as:
1. most illness and injuries occur outside the workplace, and
2. the coverage may not be adequate.
And with recent reforms to Workers’ Compensation legislation,
particularly the changes in NSW, the way Workers’ Compensation
claims are assessed and benefits paid means there is an even
greater need to educate clients on the differences on
the two types of cover.
Recent Legislation Changes
Those relying on Workers’ Compensation may be impacted by
legislative changes. A summary of the recent reforms announced
in NSW, that impacted both new and existing claimants, can be
found in the following NSW Work Cover Fact Sheet: http://www.
workcover.nsw.gov.au/formspublications/publications/documents/
wc-changes-fact-sheet-overview-3795.pdf
Employees may be confused about the purpose of workers’
compensation. It is therefore important to make sure your
clients understand the differences between income protection
and workers’ compensation. The risk to the individual may be
significant if they believe workers’ compensation cover alone
will be adequate as an all-purpose replacement for income
protection cover.
Key Facts
75% of Australians that were injured between 2005 – 2006,
suffered the injury outside of work1
Less than 36% of people receiving financial assistance following
a work-related injury, received financial assistance through
Workers’ Compensation2
Over 2.6 million Australians aged under 65 are living with a
physical disability3, including conditions like cancer, stroke,
heart disease and depression, that in many cases will not be
covered by Workers’ Compensation.
1 AIHW (2008) Australia’s Health 2008, Cat. no. AUS 99, Canberra
2 Australian Bureau of Statistics, Work-Related injuries 2009 – 2010.
3 http://www.abs.gov.au/ausstats/abs@.nsf/mf/4825.0.55.001/ accessed
on 30 August 2012.

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