Directors sick benefit

roadrunner

Registered User
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One of our Directors has been out sick for the past 5 months.
He is on S rate for PRSI so I`ve been told he would not be enttiled to sick pay benefit.
Are there any other schems we could recoup the cost of his salary.
Is there something called Key person in Insurance policy that could be claimed.
any help would be much appreciated.
 
Is there something called Key person in Insurance policy that could be claimed.
That would depend on what insurance cover the company had in place before the episode started presumably? This has nothing to do with SW though.
 
This is one of my pet subjects. Ireland is unusual in providing no method for self employed people (or directors of small companies) to voluntarily contribute extra welfare payments in order to be covered for sickness benefit. The issue is an important one with an ageing population as self employment may be the only work option for many over-40s in the future, especially with an economic downturn.

The problem is that the private sector will not cover anyone who has practically any type of existing condition - ie most over-40s, so income protection insurance is a non-runner as the "alternative". The loopholes in most income protection insurance policies are vast, they rarely pay out anyway.

I think that not having a provision for PRSI/sickness benefit cover for self employed and small business owners is going to exacerbate the hard times to come for the people least able to handle it, and is a very old-fashioned attitude on the part of the state. Lots of older workers would be happy to work away at small businesses and self employment allows a lot more flexibility for people who have health conditions - but no-one is going to opt for self employment at the expense of their social welfare safety net, so you end up with people unnecessarily on "medical retirement" or disability benefit.

Part of the problem is that very few people in Ireland, including the 13% or so self-employed, actually know that they have no coverage for sickness (once you are over one year self employed).

I am personally in a situation where I would like to return to self employment but at 46, I ain't going to chance it... to the best of my knowledge the only way to stay in cover would be to do 16 hours or so of any PAYE job for 46 weeks a year but also to run a small business. That's tough going even if you're 25...

If there is some obvious solution to this dilemma please enlighten me, but I don't think so, and unfortunately giving a hand to the self-employed is sadly not at the top of most political, trade union, business group or civil servant agendas. I wish someone would raise it as part of the next partnership agreement. I have tried to talk about it on radio a couple of times but it is too complex a subject for a simple media bite.

Best wishes

Imogen
 
I have to say that I disagree with your statement that "The loopholes in most income protection insurance policies are vast, they rarely pay out anyway". There are really only 3 companies in Ireland that offer income protection plans on a stand alone basis - without a personal pension etc attached. The provider of the best plan is Friends First. I believe that over 90% of their claims are successfully paid out, which is considerably higher than alot of other types of insurance.

You are largely correct in saying that they will not pay out if you have an existing condition, but that seems fair enough to me. When assessing your application, if there is evidence of an illness already existing that would ordinarily warrant a claim, why would they cover it? They are afterall, a business. They will however cover every other possible eventuality, just an exclusion on the existing illness. This exclusion is declared to the applicant in full and in writing before they start the plan. If someone has a history of being out of work due to back problems, that is all they will not cover. The person will still be covered if something else happens to them.

My understanding of it all may be naively simple... If you are self employed, you are not eligible for any State benefit. Thats not great, but that the way it is and it is our choice to become self employed. If you are an employee of a company, and assuming your PRSI payments are up to date etc, you are eligible for disability benefit of at least €9,622 per annum as an individual. Even this isn't great, but it's something. If your employer does not provide for any short, medium or long term sick pay (which they are not obliged to do), whether you are your own employer or an employee, then you should strongly consider an income protection plan as an alternative. Your only other options are to a) hope that nothing happens to you, b) live off your savings (!), c) live off your family & friends or d) find yourself in alot of trouble financially.

I do have a vested interest in this subject as one of my own websites is www.incomeprotection.ie, however I am also bound to give good, honest advice to clients based on fact, not sales. I have to justify every recommendation that I make to a client. There are plenty of publicly available, success stories available for people claiming a long term income from an income protection policy.

It can be quite easy to justify most types of insurance as sensible and useful, but yu have to draw the line somewhere and I, personally / IMHO etc, believe that once you have covered your debts with life cover, the next best step is to cover your income, which is afterall your biggest asset.

Sorry... rant over!

PS. Key man insurance is genrally just a life assurance policy that a company will take out on the life of an important employee, so if they die, the company will have the resources to recruit someone of an equal calibre to take their place. It would also serve to cover the company against any potential loss of business if that employee had a particularly good relationship with a client that gave them alot of business.
 
Both my doctor and I were outraged that I was turned down for income protection insurance basically just for being honest and not for any good medical reason as long ago as the early 1990s. I have never had a day off sick since as a result of the condition I declared. There is no fair appeal process and the people who make the decisions do not appear to have suitable medical training. I shall refrain from mentioning the company involved.

Obviously if you do not declare a condition, your medical notes are discoverable when you claim, and then the policy does not pay out. The problem is that the decisions which are being made are not being made with relevant medical knowledge.

I am glad that you declared your interest, "sense", as you are making money out of selling something which should be provided by the state and on an equitable basis, and is in other European countries. The point I am making is it is actually costing the state money by people ending up on "medical retirement"/benefits because self employment is not an option for them and they cannot get income protection insurance, which in any case is of highly doubtful value.

Can you produce any evidence of the proportion of claims made which are paid out on these policies? I doubt it.

This is going to become a much bigger problem with an ageing population and a downturn in the economy. Somehow I cannot see the private insurance sector taking up the slack, or the politicians being able to see the long view on it... Yet another example of Boston winning over Berlin unfortunately.

Best wishes

Imogen
 
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