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Income Protection Insurance for Casual Employees

     Copyright (c) 2014 Kerrie Peacock

The Australian Bureau of Statistics reports that there are currently 3,527,800 part-time/ casual employees in Australia (based on a survey carried out in April 2014). This represents approximately half the number of full-time employees in Australia, of which there are 8,045,100. Such figures indicate just how significant the number of casual employees is within Australia. Unfortunately, many insurers don't offer flexible enough terms of coverage that would conveniently cater for casual employees.

Although there have been improvements in catering to casual employees in provision of income protection insurance, there are still a number of challenges for this category of workers. Some of the barriers faced by causal workers include:

(i) Strict requirements by insurance companies

(ii) No automatic provision of income protection inside super funds

(iii) Termination of income protection cover after extended periods without employment

Strict Requirements By Insurance Companies

Income protection insurance for full time workers is less complicated than for casual employees. The main reason is that insurers require a proper assessment of your financial capacity to pay your premiums. To determine such financial standing, various insurers have certain requirements for casual employees:

• Although casual workers would have a lower working period requirement compared to full time workers, there is still a minimum working hours' limit. This minimum working hour limit is usually 20 hours each week. However, this generally only applies to white collar and/ or professional occupations. These are occupations classified as AAA (professional white collar workers, excluding workers in medical or related occupations), AA (professionals with tertiary qualifications in medical or related occupations) and A (the rest of the employees in white collar jobs).

• Apart from the minimum working hours, casual employees would also have to provide proof of having had continuous employment or self-employment for a period of 12 months within Australia

• For casual workers situated in New Zealand, they would have to provide proof of a 24-month continuous work history.

By setting such conditions for casual employees, the insurer would mitigate the risks that casual employment faces in form of unexpected job termination.

No Automatic Provisions Of Income Protection Cover Inside Super

Various super funds will not provide automatic income protection cover to casual employees. For instance, most Super SA (Superannuation of the Government of South Australia) members joining Triple S (a super scheme for public sector employees in SA) will automatically get income protection insurance. However, casual employees are among the Super SA members who aren't eligible for automatic income protection insurance.

Part time employees would first require making an official application in order receive income protection insurance under Super SA. This application requires greater levels of detail compared to that requested for fulltime employees applying for income protection insurance. Casual employees have to fill in a detailed personal profile of any existing medical conditions, history of illness, previous treatments and details of doctors visited; whereas, full time employees would only provide personal details (contact details).

Terminations Of Income Protection Insurance Casual Employees

Based on the regulations under Super SA, payments of income protection insurance benefits will cease 12 months after you stop working as a casual. This happens, because the super fund considers this as termination of your employment.

Article Source:

Kerrie Peacock possesses an in-depth understanding of the personal insurance industry in Australia. For details on a cover that can work for you visit

Posted on 2014-06-10, By: *

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Note: The content of this article solely conveys the opinion of its author.

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