Income Protection
for FIFO Workers

What is Income Protection for FIFO Workers?

Income protection (IP) insurance pays a monthly benefit — typically up to 75% of your pre-disability income — if you're unable to work due to injury or illness. For FIFO workers, this is arguably the most important type of cover, because your income is your biggest asset and the hardest thing to replace if you can't get on the plane.

Unlike workers' compensation, income protection covers you for any illness or injury — not just those that happen on the job. If you have a car accident on your week off, suffer a serious illness, or need surgery that puts you out for six months, IP keeps money coming in while you recover.

How FIFO Income is Calculated for IP Purposes

One of the most common mistakes FIFO workers make is underestimating their insurable income. Most insurers will consider:

• Base salary
• Regular overtime (if it's consistent and documentable)
• Site allowances and remote area allowances
• LAFHA (Living Away From Home Allowance) — some insurers include this, some don't

Your adviser will work with you to maximise the income figure used for your IP policy, so your benefit genuinely replaces your real income rather than just your base rate.

Waiting Period and Benefit Period

Waiting period — how long you wait before payments start (typically 30, 60, or 90 days). If you have savings or sick leave to cover a short gap, a longer waiting period lowers your premium significantly.

Benefit period — how long payments continue (2 years, 5 years, or to age 65). For FIFO workers, a longer benefit period is recommended. A serious injury or illness at 38 could leave you unable to do physical site work for years — you don't want payments stopping after 2 years.

Agreed Value vs Indemnity Value

This is an important distinction for FIFO workers whose income can fluctuate:

Agreed value — your benefit is locked in at the time of application based on your income then. If your income drops (e.g. fewer shifts, roster change) your benefit stays the same. These policies are harder to get but better value for high-earning FIFO workers.

Indemnity value — your benefit is calculated based on your income at the time of claim. More common now, and works fine if your income is stable, but could pay less if you've had a period of lower earnings.

IP for FIFO Workers Inside vs Outside Super

Income protection can be held inside super, which means premiums are paid from your super balance. However, IP inside super is typically limited to a 2-year benefit period and may have more restrictive definitions. For most FIFO workers with a high income, we recommend a retail IP policy held outside super for maximum flexibility and benefit period.

The premium is generally tax deductible for personally held income protection — one of the few insurance types where this applies.

What Does FIFO Income Protection Cost?

Premiums vary significantly based on age, occupation, income, waiting period, and benefit period. As a rough guide for a healthy male FIFO worker in a hazardous occupation:

• Age 30, $120k income, 30-day wait, to age 65: approximately $150–$250/month
• Age 40, $150k income, 60-day wait, to age 65: approximately $250–$450/month
• Age 45, $180k income, 90-day wait, 5-year benefit: approximately $200–$350/month

These are indicative only — the only way to get accurate figures is a proper comparison across multiple insurers.