Key facts about the long term sickness income gap
1. Most people think their home is their most valuable asset when it usually is their lifetime
income. So we insure our homes and cars but not our incomes.
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Unprompted, most people, 45% of employed 18-64 year olds thought their home
was their most valuable asset over a lifetime and only 24% their lifetime income.
Told that $50,000 a year over 40 years was $2 million before tax, 46% then said their
lifetime income and 29% said their home.
Only 26% of households have someone with Income Protection insurance.
In New Zealand:
2 to 3 out of 10 households will have someone with Income Protection insurance
4 out of 10 will have someone with Medical insurance
6 out of 10 will have someone with Life insurance
6 out of 10 will have someone with Home insurance
7 out of 10 will have someone with Household Contents insurance
8 out of 10 households will have someone with Vehicle insurance

2. Most people severely underestimate the likelihood of being off work for a long period
caused by sickness.
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60% of employed New Zealanders think that your chance of being unable to work for
6 months or more is the same or greater following an accident rather than sickness.
In reality for employed 18-64 year old New Zealanders, the likelihood of being off
work for 6 months or more following sickness is 1.8 times that of following an
accident.

3. Many people don’t understand that Social Welfare or ACC may not be able to help them.
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51% of people 18-64, in employment are not aware that their partner’s income (if
$30,000 or more) will preclude them from receiving all or part of a Job Seeker
allowance (previously known as a sickness benefit at a maximum of $340 a week).
1 in 5 New Zealanders think wrongly that ACC covers long term sickness that
prevents employment.

4. As a result most people are financially vulnerable if they have a long term illness that
prevents them working.
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Each year 54,800 households experienced a sickness event that meant they are
unable to work for 3 months or more.
Only 1 in every 8 households struck by serious illness preventing employment for 6
months or more had income protection insurance in place when it happened.

5. 1.54 million New Zealanders (76% of 18-64 year old New Zealanders) have no income
protection insurance.
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Many families are vulnerable with 47% of employed 18-64 year olds being unable to
pay all current household expenses and maintain their standard of living only 4
weeks after their sick leave, annual leave and savings have been used up.
Respondents who were employed, 18-64 years of age reported an average
requirement of $683 per week if the primary earner in the household was not able
to work. (Source - Horizon Research Income Security Survey July 2015)