Income protection and sick pay can work together by covering different stages of a period when illness or injury prevents you from working.
Your employer may continue paying some or all of your salary initially, while income protection is generally designed for a longer absence and normally starts only after an agreed waiting period, known as the deferred period.
So the important question isn’t simply whether you have sick pay; you also need to know how much you would receive, how long it would last and what would happen afterwards.
How do income protection and sick pay work together?
Think of your income during a long-term illness as a timeline.
Your employer’s sick-pay scheme may support you first. Depending on your circumstances and PRSI record, State Illness Benefit may also apply. If you remain unable to work beyond the deferred period on an income protection policy, an eligible claim could then begin.
The exact sequence depends on what you already have.
Someone receiving six months of full sick pay is in a very different position from someone entitled only to statutory sick leave. You may also have group income protection through work without realising how much it provides.
Can income protection and sick pay be paid at the same time?
Potentially, but that doesn’t normally mean receiving full sick pay plus the maximum income protection benefit.
Income protection policies usually set a maximum benefit based on your previous earnings. The CCPC says individual policies typically have a maximum claim of 66% or 75% of earnings, with employer sick pay, Illness Benefit and other relevant income potentially deducted when the insurer calculates what it will pay.
For example, if a policy allows for a benefit of up to 75% of your earnings, you should not assume you will receive that 75% on top of half salary from your employer and State benefits. The calculation depends on the policy terms and the other income you are receiving.
How should income protection and sick pay fit around a deferred period?
The deferred period is the length of time you must remain unable to work before an income protection benefit can begin.
Your sick-pay entitlement is therefore one of the first things to consider.
If your employer provides 13 weeks of full sick pay, for example, a deferred period around that length could potentially allow the two forms of support to follow one another. If you receive six months of sick pay, a longer deferred period may be worth considering.
If you receive very little employer sick pay, however, a long deferred period could leave you relying on savings, State benefits or other household income for several months.
There’s no single deferred period that suits everybody; your sick pay, emergency savings, household expenditure and budget all matter.
What sick pay are you entitled to in Ireland?
Before thinking about a long-term absence, establish exactly what your employer would pay you, as there’s an important difference between Ireland’s statutory minimum and a more generous company sick-pay scheme.
What is statutory sick pay in Ireland in 2026?
Eligible employees currently have five days of statutory sick leave per calendar year.
The payment is 70% of normal earnings, subject to a maximum of €110 per day. Employees generally need at least 13 weeks’ continuous service, and the absence must be medically certified.
Five days is the statutory minimum rather than a description of what every employee receives, but your employer may provide considerably more.
What if your employer has its own sick-pay scheme?
Check your employment contract, HR policy or employee-benefits information. You want to know:
- how long you receive full salary;
- whether your pay subsequently reduces;
- when employer sick pay stops;
- whether previous absences affect your entitlement; and
- whether you also have group income protection.
For example, “six months’ sick pay” could mean six months on full salary, or it could mean three months on full pay followed by three months on half pay. Those two arrangements create very different income gaps.
What should you check about income protection and sick pay?
The starting point is understanding what would happen to your household finances if your normal salary stopped. Look at your existing benefits alongside what your income actually pays for.
How much sick pay do you actually have?
Put your entitlement into a simple timeline. For example:
- Weeks 1–13: Full salary
- Weeks 14–26: Half salary
- After week 26: Employer sick pay ends
That tells you much more than simply knowing your employer provides “six months’ sick pay”. If you change jobs, check the new arrangement rather than assuming your existing benefits will follow you.
How long could your household manage on reduced income?
Consider your essential monthly expenditure, including your mortgage or rent, food, utilities, childcare, transport, loans and insurance. Then look at the resources you could rely on:
- emergency savings;
- your partner’s income;
- State benefits;
- workplace benefits; and
- expenses you could realistically reduce.
Suppose your household needs €3,500 a month for its main commitments but the income available during a long-term absence falls to €1,500; then that €2,000 difference is the issue you need to consider. Looking at an actual monthly shortfall is much more useful than simply asking whether you “have sick pay”.
What protection do you already have through work?
Sick pay and group income protection are not necessarily the same thing:
- Sick pay usually means your employer continues paying your salary, or part of it, for a specified period.
- Group income protection is a workplace insurance arrangement that may provide longer-term replacement income, subject to the scheme rules.
If you have group cover, check the percentage of earnings covered, deferred period, deductions for other benefits, how long payments could continue and what happens if you leave the employer. The aim should be to identify a genuine gap rather than duplicate protection you already have.
What happens when sick pay reduces or ends?
You mightn’t move directly from full salary to no salary, as some workplace schemes provide full pay initially and then half pay before stopping altogether. For example:
- Months 1–3: Full salary
- Months 4–6: Half salary
- After month 6: No employer sick pay
This matters when considering your deferred period because financial pressure could begin before your employer stops paying you completely. If half salary covers your essential expenditure comfortably, you may be able to manage that period differently from somebody whose household needs almost all of their normal earnings.
What about illness benefit?
If you meet the relevant conditions, Illness Benefit may provide some State support when you are unable to work.
However, State benefits should be considered alongside your normal salary and household expenditure rather than treated as a direct replacement for your earnings.
Illness Benefit can also be taken into account when an insurer calculates an income protection payment.
How much income could income protection provide?
Income protection is designed to replace part of your earnings rather than leave you financially better off while unable to work.
The CCPC says the maximum claim under an individual policy is typically 66% or 75% of previous earnings, although policies vary. Employer sick pay, Illness Benefit and other income can then affect the amount actually payable.
Imagine someone earns €60,000 and has a policy allowing a maximum benefit of 75% of earnings. Seventy-five per cent of €60,000 is €45,000. That doesn’t automatically mean the insurer pays €45,000 a year regardless of any sick pay or benefits the person continues receiving.
A simplified way of looking at it is: maximum benefit under the policy – relevant sick pay – relevant State or other benefits = potential insurer payment.
The actual calculation depends on the policy.
You should also understand factors such as the deferred period, definition of incapacity, benefit cessation age, exclusions and underwriting rather than focusing only on the percentage of salary covered.
Is there tax relief on income protection?
Qualifying contributions to a Revenue-approved Permanent Health Benefit scheme can receive Income Tax relief, subject to Revenue’s conditions.
Revenue currently limits relief to premiums equal to 10% of your total income for the relevant tax year.
Tax treatment depends on the particular arrangement, so it should form part of the overall assessment rather than being the reason for choosing a policy.
Does good sick pay mean you do not need income protection?
Not necessarily, but good employer benefits can substantially change what additional protection might be appropriate.
If your employer provides six or twelve months of strong sick pay, you have considerably more short-term support than someone receiving only the statutory entitlement.
The next questions are:
- What happens when that sick pay ends?
- Does it remain at full salary throughout?
- Do you already have group income protection?
- How long could your savings support you?
- Would your workplace protection disappear if you changed jobs?
Equally, somebody with generous sick pay followed by strong group income protection may already have substantial cover.
Additional protection should therefore be considered around the gap you actually have rather than on the assumption that everybody needs the same arrangement.
What if you’re self-employed?
If you work for yourself, you won’t have an employer providing company sick pay. That makes emergency savings, other household income and the length of any deferred period particularly important. You need to consider how you would fund your normal commitments during the period before any longer-term protection could begin.
How Covermore can help you protect your income
Protecting your income starts with understanding what you already have, which means looking at your sick pay, employer benefits, savings, household expenditure and existing protection before deciding whether there is a gap.
This is the approach behind one of our seven steps to financial freedom: protecting your income, which begins by considering your current income, sick pay, workplace benefits, savings and regular financial commitments.
If a gap does exist, our income protection advice service can help you understand the options available and how they could fit your circumstances.
So, if you’re unsure how long your sick pay would last or what would happen once it ended, get in touch with our team of experienced financial advisors so they can help you work through what you already have and whether there is a gap to address.
Note: This article provides general information rather than personal financial, insurance or tax advice. Eligibility, benefits, underwriting and tax treatment depend on individual circumstances and the terms of the relevant policy or scheme.
Income protection and sick pay FAQs
Q: Can I get income protection if I already have sick pay through work?
A: Yes. Having employer sick pay doesn’t automatically prevent you from taking out income protection. The key question is how long your sick pay lasts and what happens when it ends. Your existing workplace benefits will usually influence the deferred period and the amount of additional protection that may be appropriate.
Q: Can income protection and sick pay be paid at the same time?
A: Potentially, but you shouldn’t assume you’ll receive your full sick pay and the full income protection benefit at the same time. Employer sick pay, State benefits and other relevant income can affect how much an insurer pays under an income protection claim. The exact calculation depends on the terms of the policy.
Q: Does Illness Benefit affect income protection payments?
A: It can. State Illness Benefit may be taken into account when an insurer calculates the amount payable under an individual or group income protection arrangement. The way this works will depend on the policy or scheme.
Q: What if my employer pays six months’ sick pay?
A: Six months of sick pay can provide a useful financial buffer, but it’s worth checking exactly how the scheme works. You may receive full salary for the entire period, or your pay could reduce part-way through. You should also check what happens once the six months ends and whether you have any group income protection through work.
Q: What is a deferred period in income protection?
A: The deferred period is the length of time you must be unable to work before an income protection benefit can begin. Your employer’s sick-pay arrangements are often an important factor when choosing a deferred period. For example, if your employer provides 13 weeks of full sick pay, you may consider whether a deferred period around that timeframe is suitable.
Q: Is income protection the same as sick pay?
A: No. Sick pay is usually provided by your employer for a defined period when you’re unable to work. Income protection is an insurance policy designed to provide replacement income during a longer period of illness or injury, subject to the policy terms.
Q: How much of my salary can income protection cover?
A: The amount depends on the policy. Individual income protection policies commonly set a maximum benefit as a percentage of your previous earnings. Other income, including employer sick pay or State benefits, may then be taken into account when calculating the actual payment.
Q: Do I need income protection if I have good sick pay?
A: Not necessarily. Good employer sick pay can reduce the short-term financial risk of being unable to work. However, it’s still worth checking what happens once that benefit ends, whether you already have group income protection, and how long your household could manage on reduced income.
Q: What happens to my income protection if I change jobs?
A: That depends on whether your cover is personal or provided through your employer. If your income protection is part of a workplace benefits package, it may end when you leave that employer. A personal policy may continue, subject to its terms, so it is worth reviewing your protection whenever your employment changes.
Q: Does income protection apply if I am self-employed?
A: It can. If you’re self-employed, you won’t have employer sick pay, so your savings, household income and chosen deferred period become particularly important. Your occupation, earnings and health will also affect the cover available.