What If You Could Not Work? Planning for Financial Pressure
Published Oct 23, 2026
Start with the next few months
If illness or injury meant you could not work for a while, start with the next few months rather than a distant worst case. For a Perth household, the practical question is which costs would continue, what resources would still be available and where a gap could appear.
This is not a prediction or a reason to buy a particular policy. It is a way to make decisions from a clearer picture. A plan can include savings, workplace leave, income from another household member and any cover already in place. Each source has its own limits.
Find the real monthly gap
Begin with a simple monthly budget. List income that is likely to continue, then the expenses that cannot easily stop: rent or mortgage repayments, groceries, utilities, transport, insurance premiums and debt repayments. Add irregular costs too, such as car servicing, school expenses or annual bills. ASIC MoneySmart recommends using bank statements so the budget reflects what you actually spend.
The result is not a standard percentage of income. It is the amount your own household needs to meet essential commitments. If you share costs, note what could continue from a partner's income and what cannot be reduced straight away. This makes the shortfall more useful than a broad rule of thumb.
Know how long leave and savings can bridge
Savings can help bridge a short gap, but only count money that is genuinely accessible and that you are willing to use. Do not assume that super, home equity or an investment can be used quickly without consequences. Put the available savings beside the monthly gap to see how many months it may cover.
For employees, check your actual personal and carer's leave balance rather than assuming a full year's entitlement is available. Under the National Employment Standards, non-casual full-time employees accrue 10 days a year and part-time employees accrue leave pro rata. Unused leave carries over. Casual employees do not receive paid personal and carer's leave. Your award, agreement or contract may provide more than the minimum.
Check cover without counting it twice
Look at any income protection, life or TPD cover held directly or through super. For income protection, the waiting period answers how long your resources need to last before an eligible payment can begin. The benefit period answers how long payments may continue while policy conditions are met. The policy's disability definition, work-hours requirement, exclusions and income evidence still matter.
Do not add every possible payment together as though each is guaranteed or paid at the same time. An income-protection payment is generally based on an eligible loss of personal income and can depend on verified pre-tax income, the insured amount and policy terms. Other payments, including leave, workers compensation or another policy, can affect timing or the calculation under some policies. Check the current PDS and schedule for the cover you hold.
Make a one-page plan before you need it
Write down the first point at which savings would be used, the paid leave balance, the end of any waiting period and the person who would contact an employer, insurer or super fund. Keep policy numbers, current schedules, recent payslips or tax records and a clear description of your usual duties together. Depending on the claim, an insurer may also ask for medical information, work details and ongoing progress forms.
A one-page plan will not answer every question, but it can show what needs checking now. It also makes it easier to see whether the household relies on a resource that may not be available, or whether the budget needs a smaller short-term buffer.
Review when work or income changes
Revisit the plan after a new job, reduced hours, a business change, a large new commitment, extended leave or a super-fund change. These events can change both the household gap and the way existing cover applies. Check super cover before changing funds or closing an account, because premiums reduce the balance and cover can end under inactivity, balance, employment or age rules.
A review does not have to end in new insurance. It may simply confirm the role of savings, leave and current cover. Before reducing, cancelling or replacing a policy, understand the existing terms and the status of any replacement arrangements. This is general information only. Policy definitions, eligibility, exclusions, offsets and claim requirements vary. Read the relevant PDS and consider personal advice before making a decision.
Key takeaways
- Work out the household costs that would continue and the income still available
- Check actual paid leave, accessible savings and existing cover together
- Policy terms and offsets determine how an eligible benefit may respond
- Review before changing cover or relying on a selected monthly amount
Helpful next steps
Sources
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START HEREArticle author
Tim Grapiglia
Founder and Financial Adviser
This article provides general information only. Read the sources and relevant policy documents before making a decision.