Does the 70% income replacement cap apply to my full salary, or is there a sliding scale at higher income levels?

The 70% APRA cap applies on a sliding scale at higher incomes, not on your full salary, and every panel insurer reduces the replacement ratio above a stated income tier. The first-tier threshold and the step-down rate differ between insurers, so the cap operates differently for high earners.

The legal anchor is APRA's Individual Disability Income Insurance Information Paper (October 2021). All nine retail policies on the IMFL panel comply, and each one publishes the tier and step-down in its current PDS.

How each panel insurer tiers the 70% cap

| Insurer | First tier (full 70%) | Step-down tier | PDS reference | |---------|-----------------------|----------------|---------------| | AIA | 70% of the first $20,000 of monthly pre-disablement income | Reduced bands above that level | Priority Protection PDS v32 (9 Nov 2025), Section 5.1.2 | | TAL | 70% of the first $25,000 per month ($300,000 per annum) of earnings | Capped above $300,000 p.a. | Accelerated Protection PDS (12 Dec 2024), Section 2.6 | | Zurich | 70% of the first $240,000 of annual earnings | 50% on the next $60,000 | Zurich Wealth Protection PDS (1 Nov 2025), Income Safeguard section | | OnePath | 70% of the first $300,000 of annual income at cover start | Tiered reduction above $300,000 | OneCare PDS (1 Oct 2025), Income Secure section | | NEOS | 70% of the first $25,000 per month of regular income | Reduced above $25,000 per month | NEOS Protection PDS (6 Dec 2024), Income Support section | | Encompass | 70% of the first $240,000 of annual pre-disability earnings | Reduced above that level | Encompass Protection PDS (26 Sep 2025), Income Protection section | | Acenda | 70% on the first $240,000 of earnings | 20% on the next band, for 6 months only | Acenda Insurance PDS (27 Sep 2025), Income Replacement Ratio | | Futura | 70% of the first $25,000 per month of regular income | Reduced above that level | Futura Protection PDS (1 Oct 2025), Income Protection Cover | | ClearView | 70% under Income Protection Flex (IP70) | IP60 option steps down further | ClearChoice PDS (13 May 2024, Update 5 June 2025), Section: Income Protection |

What "gross monthly income" actually means at claim

PAYG employees

The insurable income is usually your base salary plus consistently received bonuses, commissions, and overtime, averaged over the 12 months before the waiting period started. Single, exceptional bonuses are excluded by most PDSs.

Self-employed

Net business income (gross revenue less allowable business expenses, before personal income tax) is the standard insurable figure. That figure is often materially lower than gross drawings, so the 70% cap applies to a smaller base than business owners assume.

Super contributions

The Super Contribution Option, where included, pays an extra benefit on top of the 70% cap rather than within it. Confirm the structure in the relevant PDS.

What this means for your benefit calculation

If you earn under the first-tier threshold (roughly $240,000 to $300,000 per year, depending on insurer), the full 70% applies on gross earnings. Evidence is still required at claim. If you earn above the threshold, your effective replacement ratio on aggregate income is below 70%. Always verify the current tier figures against the latest PDS, since insurers update these from time to time. This is general information, not personal advice.