Picture this — it’s a Monday morning, you’re halfway through a bathroom renovation, and a quick slip off a ladder sends you straight to hospital. Broken ankle. Eight weeks off the tools. No work. No income Protection. No backup.
For a lot of tradies, that’s not a “what if” — it’s a very real risk.
When you’re self-employed, there’s no sick leave, no workers’ comp safety net, and no boss to keep paying you. Your business stops the moment your body does.
As Experts from The Finance Shed often says:
“Your body is your biggest asset. If it’s out of action, your income is too.”
Let’s break down what really happens when you can’t work — the financial fallout most tradies underestimate — and no income protection can keep your finances, family, and future secure.
The Harsh Reality: Tradies Are Among Australia’s Most Injury-Prone Workers
According to Safe Work Australia, construction and trade workers make up one of the highest groups for serious injury claims each year.
Falls, back injuries, repetitive strain, machinery mishaps — the list goes on.
Even minor injuries can take you out of work for weeks or months, and serious ones can derail your career entirely.
No income protection, every week off means:
- No money coming in
- Bills and mortgage payments piling up
- Stress on your partner or family to cover costs
- Possible debt from living expenses
It’s not dramatic — it’s math.
The Real Cost of No Income Protection
Let’s put numbers to it.
Scenario 1:
You earn $80,000 a year ($6,666/month before tax).
You break your wrist and can’t work for three months.
Loss of income: $20,000+
Ongoing bills: mortgage/rent, utilities, insurance, food, vehicle repayments.
Extra costs: physio, medical appointments, maybe help on unfinished jobs.
Now imagine if that break was your leg — or a spinal injury that takes six months to heal. That’s $40,000–$50,000 gone.
Most tradies don’t have that kind of cash sitting around.
And if you dip into credit cards or personal loans to survive, you’re just digging a deeper hole.
Real-World Story: Johnny’s Wake-Up Call
Johnny’s a 37-year-old carpenter from Newcastle — typical hard worker, great at his trade, running a small crew. He never bothered with income protection.
Then one weekend, while helping a mate move, he tore his ACL. Surgery, rehab, six months off.
With no income protection, Johnny had to:
- Sell his work ute to cover rent
- Max out two credit cards
- Watch his business reputation fade as clients went elsewhere
By the time he could get back on the tools, he was $25,000 in debt and had to start over.
Johnny’s story isn’t unique — it’s happening to tradies across Australia every week.
The Safety Net: How Income Protection Works
Income protection is like financial scaffolding — it holds you up when your body can’t.
If you’re injured or too sick to work, your policy pays you a regular income (usually 70–85% of your earnings) until you can get back on the job.
It’s designed to cover your essential expenses — mortgage, food, insurance, car payments, kids’ costs — so your lifestyle doesn’t collapse.
Typical Features:
- Benefit amount: 75–85% of your income
- Benefit period: 1 year, 2 years, 5 years, or up to age 65
- Waiting period: 14, 30, 60, or 90 days
- Tax treatment: premiums often tax-deductible for self-employed tradies
What About Workers’ Compensation?
A lot of tradies think, “I’m covered by workers’ comp, right?”
Not necessarily.
Workers’ compensation only covers you if you’re an employee and the injury happens at work.
If you’re self-employed, subcontracting, or have your own ABN, you’re likely not covered.
Even if you are, it usually only covers basic medical costs and part of your lost wages — nowhere near full replacement.
That’s where income protection comes in. It’s designed for self-employed tradies, not just employees.
Adding Extra Protection: TPD and Trauma Cover
Income protection covers your monthly income while you recover — but what if you can never go back to work?
That’s where TPD (Total and Permanent Disability) and Trauma Insurance step in.
- TPD Insurance pays a lump sum if you’re permanently unable to work again in your trade.
- Trauma Insurance pays a lump sum if you’re diagnosed with a serious illness (like cancer or heart attack).
These policies are lifesavers for long-term recovery and rebuilding your financial future.
Expert’s Take — “Your Body Is Your Business”
Expert from The Finance Shed has seen too many good tradies fall apart financially after an accident:
“Tradies insure their utes, their tools, their trailers — but not their own body, which earns the money to buy it all.
If you’re your own boss, no income protection is your sick leave. It’s your safety net.”
He often encourages tradies to see insurance not as an expense, but as part of being finance fit.
The CARE Model Connection — R for Risk
In The Finance Shed’s CARE model, “R” stands for Risk — protecting your income, assets, and business from the unexpected.
Without income protection, all the other pillars — Cashflow, Assets, Exit — start to crumble.
A single injury can undo years of hard work if you’re not protected.
Income protection keeps your CARE model balanced, even when life throws you off track.
Conclusion:
Your skills, strength, and effort are what keep your business running.
If that suddenly stops, income protection is what keeps your bills paid and your business alive.
So don’t leave your livelihood to luck.
Even a basic policy can mean the difference between recovery with peace of mind or months of financial stress.