Most people insure their car, their house and their phone. Far fewer insure the thing that pays for all three.
If you could not work from tomorrow, your salary would stop long before your bills did. Here is exactly what happens, and what the gap looks like in euro.
What does the State actually pay if you cannot work?
Less than almost everyone assumes.
If you are a PAYE employee in Ireland, two things happen. First, Statutory Sick Pay. Your employer must pay you for up to five days a year, at 70% of your normal daily wage, capped at €110 a day. The Government considered raising this to ten days and decided against it, so five days is the legal floor in 2026.
Then Statutory Sick Pay runs out, and you move to Illness Benefit from the Department of Social Protection.
Illness Benefit pays a maximum personal rate of €254 a week in 2026, up from €244 following Budget 2026. It is not a percentage of your salary. It is a flat rate based on your average weekly earnings in the relevant tax year, which for a 2026 claim means your 2024 earnings. There are three waiting days at the start of any claim, and it is taxable.
That is the safety net. Five days at 70%, then up to €254 a week.
What is your actual gap?
Do this now. It takes two minutes.
- Take your gross annual salary and divide by 52. That is your weekly income.
- Subtract €254. That is your weekly shortfall, assuming you qualify for the maximum rate, which not everyone does.
- Multiply by 52. That is your annual shortfall if you were out of work for a full year.
On a €60,000 salary, your weekly income is roughly €1,154. Illness Benefit at the maximum rate replaces €254 of it. The gap is €900 a week, or around €46,800 over a year.
Your mortgage does not shrink to match. Neither does the energy bill, the crèche, the car loan or the weekly shop.
The part that catches self-employed people out
If you are self-employed and paying Class S PRSI, you do not qualify for Illness Benefit at all.
Not a reduced rate. Nothing.
Your options are means-tested payments such as Disability Allowance, which assess your household income and savings before paying anything. If you have a working spouse or money in the bank, you may receive nothing at all.
This is the single biggest protection blind spot we see. Business owners and sole traders who have carefully covered their premises, their stock and their public liability, and have covered precisely nothing for the one asset the entire business depends on, which is their own ability to turn up and work. If you are running your own business, our page for self-employed and business owners is a reasonable place to start.
How long does Illness Benefit last?
Up to two years, or 624 payment days, if you have at least 260 weeks of PRSI contributions. With between 104 and 259 weeks it is one year, or 312 payment days. After that, if you are still unable to work, you may qualify for Invalidity Pension, which is a long-term payment with its own conditions.
Two years sounds like a long time. It is not, if the thing that stopped you working is not going to resolve in two years.
What income protection actually does
Income protection is an insurance policy that pays you a regular replacement income if illness or injury stops you working. Typically it covers up to 75% of your earnings, less any State benefits you receive, and continues paying until you can return to work or reach your chosen retirement age.
Three things worth knowing before you look at a quote.
The deferred period is the main pull on cost: This is how long you wait before the policy starts paying: commonly 13, 26 or 52 weeks. A longer deferred period means a cheaper premium. The right choice depends on your savings and whether your employer has a sick pay scheme beyond the statutory minimum.
The premiums qualify for tax relief: Income protection is one of the few personal insurance policies where you can claim relief at your marginal rate on premiums paid to a Revenue approved permanent health benefit scheme. Relief is capped at 10% of your total income for the year and applies to income tax only, not PRSI or USC. For a higher rate taxpayer that still changes the real cost of cover considerably, and any benefit the policy pays out is taxable as income.
Your occupation matters more than your age: Underwriting looks hard at what you actually do all day. Two people the same age can be quoted very differently depending on their job.
What to do this week
- Find out what your employer actually provides. Many companies have a sick pay scheme well beyond the statutory five days, and some have group income protection you are already covered by and do not know about. Ask HR for it in writing.
- Do the gap calculation above. Write the number down.
- Check whether you already have cover. Some pension and mortgage arrangements include elements of protection. People are frequently either uninsured or paying twice.
- If you are self-employed, treat this as urgent rather than interesting. You have no State safety net at all.
- Talk to someone who can compare across insurers. Different insurers take very different views of the same occupation and the same medical history.
Protection is the least interesting part of a financial plan right up until the day it is the only part that matters. If you want to work out where you stand, book a call and we will go through it properly.
