8 July 2026 | See disclaimer
When illness or injury prevents you from working, the loss of regular income can put real pressure on your household finances. That’s where Budget Direct Income Protection comes in. This income protection insurance is designed to provide a monthly benefit when you’re temporarily unable to work, covering up to 70% of your before tax earnings. This helps you stay on top of living expenses while you focus on recovery.
Benefits of Budget Direct Income Protection
Budget Direct Income Protection is a flexible income protection cover that can be personalised to individual circumstances.
Anyone can apply online if you’re 18–60 and work at least 20 hours per week. If you’re 55 or older when you apply, the maximum benefit period you can select is 1 or 2 years, and cover ends on the policy anniversary after your 65th birthday.
How long do payments last for income protection?
Your benefit period is the maximum period you can receive benefits for a single income protection claim. With Budget Direct, you can choose 1, 2, 5 or 10 years.
If you select the 10-year benefit period, the maximum monthly income reduces by 14% after two years.
Your waiting period is how long you must be disabled and unable to work before benefits commence. Waiting period options are:
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30, 60 or 90 days.
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A 730-day (2-year) waiting period is also available if you have existing cover under a group salary continuance policy (for example, through your super account).
You may find that a suitable waiting period depends on your current savings, accrued sick and annual leave and how soon you would need payments to start.
Sum Insured (how much you are covered for):
Wondering how much income protection you can apply for? With Budget Direct, you can insure up to 70% of your income, before tax, to a maximum monthly benefit of $30,000.
The cover amount is calculated as 70% of the first $25,000 of your regular monthly income, plus 50% of the next $25,000. This keeps your insurance cover practical and balanced.
Occupation & Income Protection
Your occupation affects eligibility and insurance premiums because some jobs carry higher risk.
It’s important to provide accurate work details when you apply for income protection, so your income protection policy is valid and tailored to your individual circumstances. Self-employed Australians can also be covered, with policies that reflect variable income patterns and business responsibilities.
If you have a medical history or pre-existing medical conditions that interfere with your work, it’s worth reading our guide on life insurance with pre-existing medical conditions for further information about how it may affect your cover.
What’s Included in Budget Direct Income Protection
Built-In Benefits at No Extra Coast
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Waiver of Premium: Your premiums are waived while you receive payments on a successful claim.
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Recurring Disablement: If you relapse from the same condition within 6 months of returning to work, your claim continues without a new waiting period.
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Rehabilitation and Return-to-Work Support: Benefits can help cover the cost of rehabilitation programs, equipment or vocational training to assist your recovery.
Optional Extras
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Claim Payment Increase Benefit: Your monthly payments increase each year in the line with Consumer Price Index (CPI) to help offset inflation.
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Monthly Superannuation Benefit: You can add up to 11.5% of your sum insured to cover your super balance while you’re on claim.
For more on managing important personal documents and insurance details, you can read our article on how to keep important documents safe.
Managing Your Policy & Premiums
Life changes, and your insurance can adapt. If you get a permanent salary increase, the Future Income Increase Benefit lets you raise your cover by up to 15% (max $2,500) without another medical assessment, as long as you apply within 60 days.
If you experience a major life shift, such as unemployment, parental leave, or returning to full-time study, you can take advantage of the Premium Pause feature. This lets you temporarily pause your insurance costs for up to 12 months after your policy has been active for two years.
Both features help manage premium loading, variable age stepped premiums, or cash-flow needs over time
Making a Claim
If a medical practitioner certifies that you will be unable to work for the entire waiting period (e.g., 14 days or more), you could contact us to start the claim process.
When you make a claim:
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Your income protection benefit is the lesser of your sum insured or your income replacement amount.
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If you earn other payments or post-disability income while claiming, your monthly benefit may be reduced (offsets can apply, such as workers’ compensation).
For clarity on related protection options, you can learn more about the difference between critical and terminal illnesses.
Important Exclusions and Limitations
No benefit is payable if you haven’t earned income in the 12 months before your disability.
Claims will not be paid for sickness or injury related to:
- Self-inflicted injury or attempted suicide (within the first 13 months of cover)
- Normal, uncomplicated pregnancy or childbirth
- Participation in criminal activity
- War or acts of war
- Pre-existing conditions not disclosed and accepted when you applied
Budget Direct Income Protection can help provide financial security when life doesn’t go to plan. It’s flexible and straightforward, so that you can focus on recovery without the added worry of household bills. Remember to speak to a financial adviser if you need tailored guidance.
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