Self-employment is far more appealing to some professionals than the idea of working for someone else. You are your own boss which means you make the decisions. All profits go to you and you can choose your schedule. You never have to worry about coworkers or office drama. It sounds great, of course it doesn’t always come easy.
Being self-employed means you are responsible for your own success. Failure could mean no income and you may need to put in longer hours without the resources of a large company. Regardless of why you chose self-employment, it’s important to understand your benefits so you know what is available should you ever need to use them.
What Happens When You Are Injured as a Self-Employed Person?
Employees are typically entitled to a number of benefits like workers’ compensation, sick leave, and disability insurance through a superannuation fund. If you are self-employed, those benefits may not be available to you. Right now, approximately 17.2% of the workforce in Australia is self-employed. That comes to a total of 2 million individuals who may be affected should they fall ill or suffer an injury that prevents them from working.
Your superannuation fund may already provide TPD cover. Many do not realise that they are given this benefit. That being said, not all superfunds provide TPD automatically and may require you to elect the benefit. That’s why it’s so important to read your benefits thoroughly and make any changes as needed before you find yourself in a situation where you need assistance. You might also have private insurance for disablement.
Making a TPD Claim While Self-Employed
If you have TPD insurance, you will be required to meet the definition of total and permanent disablement. As every insurance policy is different and there is no single definition of total and permanent disability, it is critical to read and understand what you are covered for.
Your insurer will require more than your word when reviewing your claim. For example, you will need to give medical reports, medical certificates, police reports or other incident reports..
Does My Hirer Have to Contribute to my Superfund?
If you are classified as an independent contractor, then your hirer is not required to contribute to your superfund. An independent contractor is someone who has a high level of control over the work performed. They make decisions about hiring other to provide assistance. They are usually hired to handle a specific task or length of time and will submit invoices and have an ABN.. They also pay their own tax and GST and do not receive any paid leave.