Category: Coverage
After 24 months on claim, every retail Income Protection policy issued from October 2021 re-assesses your benefit basis under APRA's two-year income reset rule, and the disability test usually tightens at the same point. The recalculation aligns payments with current earnings for your role, rather than your at-application income.
The rule was introduced through APRA's Individual Disability Income Insurance Information Paper (October 2021) to keep IP benefits sustainable and aligned with current workforce earnings. All nine panel PDSs reflect the rule.
| Insurer | What happens at the 24-month mark | PDS reference | |---------|-----------------------------------|---------------| | AIA | Income Protection CORE 70/60 variant steps benefit down from 70% to 60% of pre-disablement income after 24 months. Reduction-band variants also tighten after 24 months. | Priority Protection PDS v32 (9 Nov 2025), Section 5 | | TAL | Definitions and offset rules tighten after 24 months of payments. Disability test moves from own occupation to any occupation. | Accelerated Protection PDS (12 Dec 2024), Section 2.6, Section 9 Glossary | | Zurich | First 24 months on monthly benefit assessed on own occupation; after 24 months assessment moves to any occupation. | Zurich Wealth Protection PDS (1 Nov 2025), Income Safeguard | | OnePath | After two years on claim, assessment of disability moves to any occupation. In the first 2 years on claim, monthly income is calculated on at-application basis. | OneCare PDS (1 Oct 2025), Income Secure section | | ClearView | 70% of pre-disability earnings paid until 24 months, then claim definitions change. | ClearChoice PDS (13 May 2024, Update 5 June 2025), Section: Income Protection | | NEOS | Until 24 months, assessment is on ability to work in own occupation. For all other waiting period and benefit period combinations beyond that, definition tightens to regular occupation criteria. | NEOS Protection PDS (6 Dec 2024), Income Support Cover | | Encompass | On claim for any one or related illness or injury for longer than 24 months, the definition of total disability and partial disability moves to the any occupation test. | Encompass Protection PDS (26 Sep 2025), Income Protection section | | Acenda | 24-month structure embedded in Income Replacement Ratio Amount calculation. After 24 months, payment basis and definitions update. | Acenda Insurance PDS (27 Sep 2025), Income Protection section | | Futura | For the waiting period and the first 24 months of claim, original disability tests apply. After 24 months, tests tighten. | Futura Protection PDS (1 Oct 2025), Income Protection Cover |
The monthly benefit is reset to reflect what your role would be earning today, based on industry benchmarks for the occupation you held immediately before claim. If wages in your role have risen, the benefit may go up. If wages have stagnated or your role no longer exists at the same level, the benefit may fall.
Most panel PDSs tighten the disability test from own occupation to any occupation at the 24-month mark. This means you must now be unable to work in any occupation for which you are reasonably suited by education, training, or experience, not just your original role.
Some insurers also step down the replacement ratio. AIA's Income Protection CORE 70/60 variant reduces from 70% to 60% of pre-disablement income after 24 months (Priority Protection PDS v32). Other variants apply reductions to the offsets applied against the monthly benefit.
If you have in-claim CPI escalation included, the reset and the CPI uplift work together. CPI is applied to the monthly benefit each year, while the reset re-anchors the basis of that benefit at month 25. The two operate as separate adjustments, not as alternatives. Always check the PDS for the precise interaction, since wording varies.
If wages in your occupation are rising, the reset can lift your monthly benefit. This was part of APRA's intent: keep claim payments aligned with the broader workforce so that claimants are not under-paid relative to current earners.
If your occupation has declined in real terms or no longer exists, the reset can reduce your monthly benefit. This introduces uncertainty into multi-year financial planning, particularly for older claimants whose roles may have been automated or restructured.
Pre-reform contracts (typically agreed value, indefinite benefit periods, no income reset) are not subject to the 24-month reset. Those policies continue at the original basis. Replacing a legacy policy with a current contract usually means losing the no-reset feature, so check carefully before any policy switch.
This is general information, not personal advice.
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