What is the difference between Income Protection and Salary Continuance insurance?

Income Protection (IP) and Salary Continuance (SC) cover the same risk: monthly income replacement when illness or injury stops you working. The labels are used interchangeably in industry, but in practice retail IP and group SC inside super differ in structure, portability, and benefit definitions.

Every panel insurer on IMFL's panel issues retail IP under AFSL-licensed retail contracts. Group salary continuance is a separate product sold through super trustees and employers, often with different terms.

Retail IP versus group salary continuance

| Feature | Retail IP (panel) | Group salary continuance (super) | |---|---|---| | Distribution | Broker-advised, individually underwritten | Bulk-underwritten, employer or trustee selected | | Owner | The insured person | The super-fund trustee | | Portability | Stays with you across jobs | Often ends when you change employers or funds | | Benefit period | 2 years, 5 years, or to age 65 | Commonly 2 years; some funds offer 5 years | | Replacement rate | 70% cap (APRA October 2021) | 70% cap (same APRA rule) | | Premium funding | After-tax dollars, generally tax-deductible to the individual | Pre-tax super contributions, paid from balance | | Underwriting depth | Full medical underwriting at application | Limited or automatic acceptance for default cover | | Definitions | Own-occupation for first 24 months on most panel PDSs | SIS-Regulation 'temporary incapacity' framework, often narrower | | Benefit destination | Paid to your bank account | Paid to your super account, with potential tax on later access |

Why the distinction matters at claim time

Group salary continuance is tied to the SIS Regulations 'temporary incapacity' definition. That is a tighter test than the retail own-occupation test most panel PDSs apply for the first 24 months on claim. The TAL Accelerated Protection PDS (12 December 2024), Section 2.6 explains the retail own-occupation test. The AIA Priority Protection PDS (Version 32, 9 November 2025), Section 5.1.2 sets out the equivalent retail mechanics. Group SC contracts inside super sit under the relevant trust deed and SIS regs and are typically published in the super fund's own insurance guide, not in the panel PDSs.

Tax treatment

• Retail IP: premiums generally deductible to the individual under ITAA 1997 s8-1. Benefits assessable as income.
• Salary continuance inside super: premiums funded from the super balance (not personally deductible). Benefits paid to your super account may be taxed when accessed, depending on age and component.

Combined strategies

Many IMFL clients hold both. Default group SC inside super covers a short benefit period and basic definitions. Retail IP tops up to the 70% cap with longer benefit periods and own-occupation cover. The 70% cap applies across all sources combined under APRA's October 2021 framework. See Topic 16 anti-stacking citations in the panel PDSs.