PROTECTING YOUR INCOME IN UNCERTAIN TIMES
With the medical profession taking the brunt of the pandemic, there has never been a more important time to clarify your sick pay entitlements and identify any potential interruption to your income. Read on for profession specific information & how to bridge the income gap.
There is no legal requirement for GP practices to provide sick pay cover, so GP assistants are not automatically entitled to anything. Depending on a GP’s employment status and / or contract of work, they may or may not receive sick pay. For those starting out, entitlements are likely lower so it's important to check your contract.
In order to qualify for Health Service Executive (HSE) sick pay, GPs must have a General Medical Services (GMS) list. GMS GPs are only entitled to sick pay when their list goes above 100 and can claim for a maximum of one year over a rolling four-year period. Their sick pay cover consists of three months full pay, then three months half pay. For GPs with lists from 100 to 699 patients, payment relates to the GMS income received. For lists over 700, there is a defined payment of €1,380.65 per week from weeks two to 13, dropping to €690.33 per week from weeks 14 to 26. In some cases of critical illness, the payment periods are increased to six months full pay, six months half with the relevant payment as dictated by panel size.
While this may constitute a reasonable benefit to assist with living costs, GPs face additional locum costs in order to ensure the continuity of their practice when unable to work themselves. There is an assumption that the HSE sick payment covers this cost however the practical reality shows a significant shortfall (around €1,120 per week for the first three months, then €1,810 per week up to six months based on an estimate locum fee of €500 per day and a GMS panel over 700). As mentioned above, this shortfall exists before the HSE sick payment starts to cover any personal or other professional costs.
NET LOSS TO GPs
At the present time a locum would cost c€500 per day, meaning that if you needed to take a week off work due to illness per week it would cost you €2,500 for the week.
After 6 months the situation becomes a little more austere. The sick pay reduces to €690 per week meaning the calculation would be as follows:
As with GPs, consultants’ entitlements vary depending on whether they undertake private work, HSE work or a combination of both. Your HSE work entitles you to sick pay (relating to HSE income only) for the first three months of any illness and half pay for the next three months. If you suffer a critical illness, payments may extend to six months full and six months half pay. At the end of that period you may go on to a State benefit of €203 per week.
Your private income is a different matter — you are not entitled to Illness Benefit or State aid on this portion of your earnings. For those with combined earnings, you will receive the HSE benefit on the HSE portion of your earnings only. Consultants with predominantly private work need to make their own arrangements to ensure income continuity in the case of illness.
Self-employed pharmacists face the same difficulty and are not entitled to State Illness Benefit. If they have a long-term condition that prevents them from working, they may become eligible for the State’s Invalidity Pension, but regular illness / injury is not covered. An additional challenge is that owner-occupier pharmacists must hire a locum to take their place or they cannot open their pharmacy, layering additional costs to their loss of income.
Employed pharmacists may be fortunate enough to be entitled to sick pay from their employer for a period of days or weeks from initially being unable to work — this really depends on the contract and there is no legal requirement. Some employers offer sick pay along the lines of two weeks in a rolling two-year period or one week per year, or possibly longer. Generally speaking, pharmacy groups do not pay Illness Benefit for much longer than that.
Overall, the most prudent thing to do is to clarify your position in relation to sick pay and ensure that it matches up with the costs that you need to live your life and run your business.
To seal any income gaps, it is advisable to consider a tailored income protection policy.
NO SICK PAY?
If you are exposed to a suspension of income from the first day of illness (most self-employed professionals) there are policy options that will cover you from day one. This way you guarantee income continuity throughout your career if you fall ill.
LIMITED SICK PAY
For those with a certain amount of cover (HSE or privately employed) you can arrange a policy that kicks in when your benefit reduces or ceases entirely. There are a variety of options running from 4 to 52 weeks deferred period.
We can help to assess your current circumstances and advise the best options for you. Simply get in touch and we will take it from there..
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