Working in fishing or farming on the Eyre Peninsula comes with unique risks. Income protection insurance can replace up to 75% of your salary if you’re unable to work due to injury or illness—but is it the right investment for your family and situation?
Introduction
Imagine waking up to discover that an accident has left you unable to work for the next six months—or longer. How would the mortgage be paid? What about groceries, school fees, and the everyday expenses that keep a household running? For fishers and farmers on the Eyre Peninsula, this scenario isn’t a distant possibility—it’s a genuine occupational hazard.
Commercial fishing is recognised as one of Australia’s most dangerous industries, with a fatality rate of 9.2 deaths per 10,000 workers. Farming isn’t far behind, with the agriculture sector recording the highest worker fatality rate of any industry in Australia—more than seven times the national average. Machinery rollovers, deck slips, repetitive strain, and long hours under intense physical pressure are daily realities for regional workers.
Income protection insurance offers a financial safety net: a monthly benefit payment (typically up to 75% of your pre-tax income) if illness or injury prevents you from working. But for families in Port Lincoln and across the Eyre Peninsula, the question remains: is it worth the cost? This article explores what income protection is, how it works, what it costs, and whether it makes sense for those in high-risk regional occupations like fishing and farming.
What Is Income Protection Insurance?
Income protection insurance is a type of insurance policy designed to replace lost employment income if a person becomes unable to work due to illness or injury. According to Moneysmart.gov.au, managed by the Australian Securities and Investments Commission (ASIC), these policies typically pay up to 75% of a person’s pre-tax salary as a monthly benefit.
How It Differs From Other Insurance Types
Income protection insurance is distinct from other forms of personal insurance:
- Life insurance pays a lump sum to beneficiaries upon the policyholder’s death
- Trauma insurance pays a lump sum following diagnosis of a serious illness, such as cancer or heart attack
- Total and Permanent Disability (TPD) insurance pays a lump sum if a person becomes permanently unable to work
By contrast, income protection provides ongoing monthly payments to replace lost wages while a person is temporarily or permanently unable to work. This makes it particularly valuable for covering day-to-day living expenses during recovery periods.
Key Policy Features
When evaluating income protection policies, several features are critical:
- Waiting periods: The time between becoming unable to work and when benefit payments begin. Common waiting periods include 14, 30, 60, or 90 days. Longer waiting periods result in lower premiums but require greater personal savings to bridge the gap.
- Benefit periods: The maximum length of time payments will continue. Options range from two years, five years, or until retirement age (typically 65). Longer benefit periods provide more security but cost more.
- Agreed value vs. indemnity value: Historically, agreed value policies locked in a benefit amount at the policy’s start, regardless of income fluctuations. However, as of March 31, 2020, new agreed value policies ceased being offered in Australia due to sustainability concerns raised by the Australian Prudential Regulation Authority (APRA). New policies are now issued on an indemnity value basis, meaning the benefit is calculated based on income at the time of the claim.
- Ownership structure: Policies can be held personally or within a superannuation fund. Premiums paid personally are generally tax-deductible, while super-based policies are typically cheaper but have different tax treatments and may offer lower coverage.
For tailored advice on income protection and other insurance options, visit Eyre Financial Services’ insurance page.
Why Income Protection Matters for Eyre Peninsula Fishers
Port Lincoln is the heart of Australia’s Southern Bluefin Tuna industry, with the Eyre Peninsula’s fishing and aquaculture sector employing over 1,024 people and contributing approximately $403.4 million in exports. But the work is gruelling and dangerous.
The Unique Risks of Commercial Fishing
Commercial fishing consistently records the highest fatality rates among Australian occupations. Research published in Frontiers in Public Health found that commercial fishing in Australia has a contextualized annual fatality rate of 9.2 per 10,000 workers—the highest of any occupation. Between 2016 and 2020, fishing vessels accounted for 76.9% of all fatalities on domestic commercial vessels.
Common injuries and incidents include:
- Slips and falls on wet, moving decks
- Equipment-related injuries (nets, winches, ropes)
- Being struck by moving objects or marine fauna
- Vessel capsizes and persons overboard incidents
- Repetitive strain injuries from hauling gear
- Fatigue-related accidents after long shifts
- Drowning (accounting for 68% of fishing fatalities historically)
The Australian Maritime Safety Authority (AMSA) reports that in 2020, fishing vessels had the highest proportion of serious injuries (65.5%) compared to minor injuries among all domestic commercial vessels.
The Financial Impact on Fishing Families
Many fishers are sole income earners, or operate family businesses where income is tied directly to quota allocations and vessel operations. If the primary operator cannot work, income can cease entirely. Seasonal income patterns—such as the annual tuna season—add another layer of complexity, as months of earnings must cover year-round expenses.
Government support is limited and slow. The Centrelink Disability Support Pension (DSP) takes an average of 82.2 days to process, with some regions experiencing waits exceeding 200 days. Even when approved, DSP payments provide minimal income compared to a fisher’s typical earnings.
For those working in high-risk, physically demanding roles like tuna farming and aquaculture operations around Port Lincoln, income protection insurance can bridge the gap between injury and recovery—protecting not just income, but the family’s livelihood and financial security.
Why Income Protection Matters for Eyre Peninsula Farmers
Farming is the backbone of the Eyre Peninsula economy, producing 100% of South Australia’s grain exports, alongside livestock operations spanning beef cattle, sheep, and more. Yet farming is also one of Australia’s most hazardous industries.
The Unique Risks of Farming
The agriculture, forestry, and fishing sector recorded the highest worker fatality rate in Australia in 2024—13.7 deaths per 100,000 workers, more than seven times the national average. Between 2013 and 2023, there were 748 farm fatalities, averaging 79 deaths per year.
Common causes of injury and death on Eyre Peninsula farms include:
- Tractor accidents: Tractors were involved in 118 fatalities between 2013 and 2023, often from rollovers or being struck by unmanned vehicles
- Quad bike rollovers: Responsible for 117 fatalities in the same period
- Farm utility (side-by-side) incidents: Involved in 52 fatalities
- Machinery-related injuries: Crush injuries, amputations, and being trapped by moving equipment
- Repetitive strain and musculoskeletal injuries: Back pain, joint strain from lifting, handling livestock, and operating machinery
- Skin cancer: High UV exposure in outdoor work environments
- Mental health challenges: Drought stress, financial pressure, and isolation
Alarmingly, mental health is now the leading cause of Total and Permanent Disability (TPD) claims in Australia, accounting for nearly one-third of all TPD payouts in 2024—over $2.2 billion. Mental health TPD claims among individuals in their thirties have surged by 732% over the past decade. For farmers facing drought, commodity price volatility, and isolation, this trend is particularly relevant.
The Impact on Farm Operations
Unlike many occupations, farming often relies on unpaid family labour and multi-generational succession planning. If the primary income earner is injured, farm operations can grind to a halt. Seasonal income patterns—such as grain harvest revenue—must cover expenses spread throughout the year. An injury during critical planting or harvest periods can jeopardise an entire season’s profitability.
WorkCover (South Australia’s workers’ compensation scheme, administered by ReturnToWorkSA) only covers injuries arising from employment. It does not cover non-work-related illness or injuries sustained outside work. For self-employed farmers and family operators, coverage gaps are common, making personal income protection insurance all the more critical.
How Much Does Income Protection Cost in Port Lincoln?
The cost of income protection insurance varies significantly based on individual circumstances. However, understanding the key drivers of premium costs can help Eyre Peninsula families make informed decisions.
Factors Influencing Premium Costs
Several factors determine how much a person will pay for income protection:
- Age: Premiums increase with age, as older individuals are statistically more likely to claim. A 30-year-old might pay $30-$50 per month, while a 50-year-old could pay $120-$200 or more.
- Gender: Women have historically paid around 7% more than men for equivalent cover, though some insurers are moving toward gender-neutral pricing.
- Occupation classification: This is critical for fishers and farmers. High-risk occupations attract significantly higher premiums. In one study, carpenters paid 77% more than accountants for identical cover. Commercial fishers and farmers are often classified as high-risk, which can increase premiums by 50-150% compared to low-risk office workers.
- Smoking status: Smokers pay substantially higher premiums.
- Waiting period: A 90-day waiting period will be cheaper than a 14-day waiting period. Choosing a longer waiting period (e.g., 60 or 90 days) can reduce premiums by 10-20%.
- Benefit period: Policies covering until age 65 cost more than those with a two-year benefit period.
- Level of cover: The monthly benefit amount chosen (e.g., $3,000 vs. $6,000 per month) directly affects cost.
Indicative Premium Examples
While premiums vary between insurers, general industry benchmarks include:
- A 40-year-old male fisher with $5,000/month cover, 60-day waiting period, and benefit to age 65 might pay approximately $150-$250 per month.
- A 35-year-old male grain farmer with $4,000/month cover, 90-day waiting period, and two-year benefit period might pay approximately $100-$180 per month.
These figures are illustrative only. Actual premiums depend on the insurer, health status, and policy features selected.
Tax Deductibility
One significant advantage of income protection insurance is that premiums paid personally are generally tax-deductible according to the Australian Taxation Office (ATO). This means that if a person pays $2,000 per year in premiums and is in the 32.5% marginal tax bracket, the after-tax cost is approximately $1,350.
However, if the policy is held inside superannuation, premiums are not tax-deductible, though they are typically cheaper overall. Any benefits received from an income protection policy must be declared as assessable income in a tax return.
For more guidance on optimising insurance costs, visit Eyre Financial Services’ budgeting and cash flow page.
Is Income Protection Worth It? Weighing the Pros and Cons
For fishers and farmers on the Eyre Peninsula, the value of income protection insurance depends on individual circumstances. Here is a balanced view of the key advantages and disadvantages.
Pros vs. Cons of Income Protection Insurance
| Pros | Cons |
|---|---|
| Replaces up to 75% of income if unable to work, protecting family lifestyle and mortgage repayments | Ongoing premium cost—can range from several hundred to several thousand dollars per year |
| Premiums are tax-deductible, reducing after-tax cost | May not be necessary if substantial savings or alternative income sources exist (e.g., partner’s income, rental income) |
| Provides peace of mind, especially for sole income earners in high-risk occupations | Policy exclusions and waiting periods can limit when claims can be made |
| Covers both illness and injury, including mental health conditions (depending on policy terms) | Self-employed individuals may face difficulties proving income loss with indemnity value policies |
| Payments are ongoing, helping cover day-to-day living expenses during recovery | Benefits are taxable as assessable income |
When Income Protection Is Especially Valuable
Income protection insurance is most beneficial in the following scenarios:
- Sole income earners: Families relying on one person’s income are highly vulnerable to financial disruption.
- High debt levels: Mortgage repayments, equipment finance, and other debts continue regardless of ability to work.
- Limited savings: Those with less than three to six months’ expenses in emergency savings.
- High-risk occupations: Fishers, farmers, and other regional workers face statistically higher injury rates.
- Self-employed and small business owners: Without sick leave or employer-provided support, income can stop immediately.
When It May Be Less Critical
Income protection may be a lower priority for:
- Dual-income families with substantial savings: If one partner cannot work, the other income and savings can cover expenses.
- Individuals nearing retirement: Those close to accessing superannuation or the Age Pension may have alternative financial resources.
- People with significant passive income: Rental properties, dividends, or other income streams can reduce reliance on employment income.
Ultimately, the decision hinges on a family’s unique financial situation, risk tolerance, and obligations.
Alternatives and Complementary Strategies
Income protection insurance is just one component of a comprehensive financial safety net. Other strategies and insurance types work alongside income protection to provide holistic protection.
Building an Emergency Fund
Financial advisers generally recommend maintaining an emergency fund covering three to six months of living expenses in an accessible savings account. This fund can bridge the gap during a policy’s waiting period and provide a buffer for minor illnesses or injuries that do not trigger a claim. For guidance on building emergency savings, visit Eyre Financial Services’ budgeting and cash flow page.
Complementary Insurance Types
Other insurance products work alongside income protection:
- Trauma insurance: Pays a lump sum upon diagnosis of a serious illness (e.g., cancer, heart attack, stroke). This can be used for medical expenses, modifications to the home, or debt reduction.
- Total and Permanent Disability (TPD) insurance: Pays a lump sum if a person becomes permanently unable to work in any occupation suited to their education, training, or experience.
- Life insurance: Protects dependents by paying a lump sum upon death, ensuring mortgage repayments, education costs, and living expenses are covered.
For advice on life insurance and other protection options, visit Eyre Financial Services’ life insurance advice page.
WorkCover (Workers’ Compensation)
South Australia’s workers’ compensation scheme, administered by ReturnToWorkSA, provides income support for workers injured in the course of employment. However, significant limitations apply:
- Work-related injuries only: Illness or injuries sustained outside work are not covered.
- Limited duration: For non-seriously injured workers, income support is generally capped at two years (100% of lost income for the first 52 weeks, then 80% for the next 52 weeks).
- Seriously injured worker threshold: To receive ongoing support beyond two years, individuals must meet a permanent impairment threshold of 35% for physical injuries or 30% for psychiatric injuries.
- Self-employed exclusions: Many self-employed farmers and fishers remunerated by profit share may be excluded from coverage.
Because of these limitations, personal income protection insurance fills critical gaps.
Getting the Right Advice for Your Situation
Income protection insurance is not a one-size-fits-all product. The right coverage depends on a family’s income, expenses, debts, dependents, existing insurance, and personal risk tolerance.
The Role of a Financial Planner
A qualified financial planner can review a family’s complete financial picture and recommend tailored insurance solutions. They can help:
- Calculate the appropriate level of cover based on monthly expenses, debts, and family needs
- Compare policies from multiple insurers to find the best value
- Identify opportunities to structure insurance tax-effectively (e.g., inside or outside super)
- Review existing cover to avoid gaps or over-insurance
- Ensure policy definitions (e.g., disability, occupation) align with actual work roles
Trusted Local Guidance for Eyre Peninsula Families
Eyre Financial Services has extensive experience working with families across the Eyre Peninsula, providing advice grounded in an understanding of the region’s unique industries and challenges. The team understands the cyclical income patterns of grain farming, the physical demands of tuna aquaculture, and the realities of regional healthcare access.
To learn more about the team’s qualifications and experience, visit Eyre Financial Services’ Our Team page.
Working with a local financial planner means receiving advice that reflects the economic, social, and occupational realities of Port Lincoln and the Eyre Peninsula—not generic, one-size-fits-all recommendations.
Conclusion
Income protection insurance offers a critical financial safety net for fishers and farmers on the Eyre Peninsula—two of Australia’s most hazardous occupations. With commercial fishing recording a fatality rate of 9.2 per 10,000 workers and agriculture recording the highest injury rate of any industry, the risks are real and immediate.
For sole income earners, families with high debt, and those with limited savings, income protection can mean the difference between financial stability and crisis during recovery from illness or injury. The policies provide ongoing monthly payments, cover both physical and mental health conditions, and offer tax-deductible premiums—valuable benefits that offset their cost.
However, income protection insurance is not right for everyone. Families with dual incomes, substantial savings, or alternative income sources may find the premiums outweigh the benefits. Personal circumstances, risk tolerance, and financial obligations must all be carefully weighed.
Ultimately, the decision to invest in income protection insurance should be informed, deliberate, and tailored to a family’s unique situation. Reviewing existing insurance coverage, assessing vulnerabilities, and seeking professional advice are essential steps in building a robust financial safety net.
For Eyre Peninsula families working in fishing, farming, and other high-risk regional industries, the question is not whether income protection insurance has value—it’s whether it aligns with their financial goals, obligations, and peace of mind.
Frequently Asked Questions
Q1: Can I claim income protection if I’m off work due to mental health issues like stress or anxiety?
Yes, most comprehensive income protection policies cover mental health conditions, including depression, anxiety, and stress-related illnesses. However, some policies have waiting periods or exclusions for pre-existing mental health conditions, so it’s critical to read the Product Disclosure Statement (PDS) carefully.
Given that mental health is now the leading cause of TPD claims in Australia, and farming communities face significant stress from drought and financial pressure, this coverage is increasingly important. Policies issued after regulatory changes in 2019-2020 may have stricter definitions or caps on mental health claims, so seeking advice from a financial planner is recommended.
Q2: What’s the difference between income protection through my super and a personal policy?
Income protection through superannuation is typically cheaper because premiums are paid from pre-tax super contributions. However, any benefits paid are taxed, and the cover amount may be lower than actual income needs.
Personal income protection policies have higher premiums (though they’re tax-deductible), and policyholders have more control over policy features like waiting periods, benefit periods, and cover amounts. For high-income earners, those with complex needs, or individuals in high-risk occupations like fishing and farming, a personal policy is often more appropriate.
Q3: If I’m self-employed as a fisher or farmer, how do I prove my income for income protection claims?
Self-employed individuals typically need to provide tax returns, profit and loss statements, and business activity statements (BAS) to substantiate their income. This is why “indemnity” policies (which base payments on actual income at the time of claim) can be problematic for self-employed people with variable income.
Previously, “agreed value” policies allowed insurers and policyholders to agree on a set benefit amount upfront based on average earnings, removing the need to prove income loss at claim time. However, new agreed value policies ceased being offered in March 2020. Existing agreed value policies can still be maintained, making them particularly valuable for self-employed fishers and farmers with seasonal or cyclical income. If purchasing a new policy, it’s essential to work with a financial adviser who understands how to structure indemnity policies for variable-income earners.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Individuals should seek professional advice tailored to their specific circumstances before making insurance decisions.
