Sarah is 33 and works as an accountant in a firm in the city centre. She’s mostly on time – though last week she was late because her cat vomited on the floor. Sarah suspects that Jim, the cat in question, took one look at the hardwood flooring in the hallway and thought ‘nah, the carpet is a way better shout.’
Sarah’s a great employee; she’s even started contributing to her employer pension scheme.
But then Sarah gets sick.
She’s out of work for a week because of cramps. The company she works for are decent and pay her 10 sick days a year. Sarah’s not worried.
But then the cramps don’t go away and she finds out she’s got stomach cancer and she’s about to face a long medical battle, and God knows how long out of work.
Those 10 paid sick days are all the company offer.
So, what happens next? And what if something like that were to happen to you?
Stories like Sarah’s happen all the time. Life happens – and sometimes it happens hard. Most of us don’t really think about protecting our salary in the event of sick leave – it’s not something we consider when negotiating over a new job or your current contract.
You’re probably too busy finagling over the dollar bills you’re making.
But sick pay is important – especially if you’ve got a good employer who is willing to cough up for more than a few days.
Because here’s the thing: an employee (that’s you) has no right under employment law to be paid while on sick leave.
None at all.
Your company doesn’t owe you a cent. It doesn’t matter if you’re toiling at your desk long past office hours or if you take the mick with extremely extended lunchbreaks – we all have the same rights when it comes to sick pay – none!
The amount of paid sick leave you get is up to your employer, though most businesses settle for three days – which, in the grand scheme of an entire working year, isn’t a whole lot. Especially as you get older and you end up with hangovers that last longer than those three days and after one particular session you’re keeled over your desk until the Tuesday, clutching your stomach and considering selling all your worldly possessions and living out of the back of a van while you travel around Europe.
Your kids could go live with their gran.
We can dream can’t we?
In all seriousness, make sure you know your company’s sick pay policy – including how many days you’re entitled to. Also find out how soon your employer requires a medical certificate – it’s usually after two or three consecutive days off and should say when you’ll be able to go back to work.
And just a little pro-tip for you: if you’re an annual leave and you’re ill and you get a cert to prove it, you should get the day back and can take it off at a later date.
Deep breaths, sunshine because we’re about to look at the cold, hard facts of being long term out of work. It ain’t pretty.
So, depending on your exact circumstances, you’ll be looking at various options – all of which have terrifying names like ‘Partial Capacity Benefit’.
Your next question, no doubt, is how much those benefits pay. I’m not going to go through an exhaustive list right now as it’s on a case by case basis, but to give you an idea we’ll look at Illness Benefit, which we’ll say Sarah, who I mentioned earlier, is on for a year while she recovers.
Sarah isn’t married and doesn’t have any kids. It’s just her and her pukey cat.
Sarah would be looking at a personal rate of €203 a week – or €812 a month. If Sarah is lucky, the accountancy firm she works for will also cover a certain amount of her wages, but that’s rare.
Neither could I, to be honest. And that’d just be me – we’re not even factoring in my three demons kids or the wife.
Life is expensive.
So is being sick, especially long-term.
Yes, it’s crap but it’s even worse if you’re unprepared.
When it comes down to it, you have two options to insure yourself in case you have to take a considerable amount of time out of work.
Those two options are: Serious Illness Cover and Income Protection.
Serious Illness Cover has a couple of different names because the insurers thought, “yes, let’s make this even more complicated.” Like Sarah’s cat, they could be accused of being an asshole.
It’s usually known as Serious Illness Cover or Critical Illness Cover. If you get any of the serious/critical illnesses covered by your policy, you get a tax-free lump sum. Most people with Serious Illness Cover get pay-outs for one of cancer, heart attack, or a stroke. I go in-depth in my ultimate guide to Serious Illness Cover here, but in brief what I’ll say is this: Serious Illness Cover is good if you have no other types of insurance.
It’s not a patch on Income Protection, which is your other option.
I’ve described Income Protection as the big daddy of insurance and I’m going to tell you why right now. You go to work to make money. That money funds your lifestyle. If that money dries up, you’re in big, big trouble.
So what if you could back up that money? Insure it, if you will.
That’s exactly what Income Protection is. You can insure up to 75 percent of your salary (less social welfare entitlements) for as long as you need it, right up until you retire.
The catch, of course, is that you need to pay your premiums, but imagine the peace of mind it would offer if, like Sarah, you found out you had cancer or some other awful disease.
It’s pretty affordable too – and I’m not just saying that because I’m a broker.
Let’s look at Sarah again. Let’s say she took out a policy a year before she got ill. She was earning €55,000 as an accountant and wanted to insure the full 75 percent of that (less social welfare, she can insure €30,694), with a deferral period of 13 weeks (how long she’d have to be out before the policy kicks in).
Tax relief applies on Income Protection, so for €39.80 every month, Sarah would receive 75 percent of her salary (less social welfare!) until she’s recovered and can go back to work.
And all for a tenner a week.
It’s worth considering, isn’t it?
Crappy sick pay?
Reckon you’d struggle to live on Illness Benefits of €203 a week?
Make the smart decision and protect your future.
You’ll never be younger; premiums will never be cheaper. Take the plunge.
Give me a call on 057 93 20836 and let’s get it sorted or complete this short questionnaire to get the ball rolling.
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