Media Q&A: Will income protection payments stop if I return to part-time work?

I’m a self-employed childminder who recently had to give up work due to a back injury. I had an Income Protection policy in place and I’ve been receiving payments from it for the last six months. I’m considering returning to work part-time, if my doctor allows it, but if I do so, would my Income Protection payments stop?

Your Income Protection payments may not stop if you return to work on a part-time basis, depending on the terms of your policy. Some policies have a ‘proportionate payment’ benefit which allows for a partial benefit payment based on reduced earnings.

For example, let’s say you previously worked 40 hours a week as a childminder earning €35,000 a year and you had an Income Protection policy protecting €26,250 (75pc) of your salary per annum until your 65th birthday. If your doctor clears that you can return to work on a part‑time basis for 20 hours a week and your part‑time earnings come to €17,500 a year - your income would be half of what it was before your injury. With a ‘proportionate payment’ benefit on your Income Protection policy, you would still be entitled to a payment – calculated on the basis of the 50pc reduction in your earnings. So you would be paid a reduced gross benefit amount of €13,125 per year (50pc of €26,250) from your policy. This payment will continue until your health improves sufficiently that you can return to full‑time work or you reach age 65. Please note, this calculation is based on one insurance provider’s approach, which may vary by provider – we’d recommend getting in touch with your Financial Broker to review your policy.

ENDS

This article was published in The Irish Independent on 23 August 2025.