Picture the morning you can't go to work. Not a sick day. A diagnosis, a back that won't take your weight, or a mind that won't switch back on.
An employee would get sick pay. As a self-employed sole trader in Ireland, your income simply stops. You pay Class S PRSI, which Citizens Information confirms generally covers no short-term illness payments: no Illness Benefit and no Statutory Sick Pay.
Everything else keeps going. The mortgage. The van loan. The childcare. The phone, ringing with customers who now need someone else.
In 25 years as a financial planner, I've sat with sole traders on the far side of that morning. Here is what the numbers say, and what to do while you're well.
What the State pays a sole trader
Start with the safety net you've already paid for. You pay Class S PRSI at 4.2% of your income, rising to 4.35% from 1 October 2026. If you can't work, here is what that buys:
Weeks 1 to 52: no PRSI-based payment, only means-tested supports.
After about 12 months: Invalidity Pension, if you have 260 paid contributions, at up to €259.50 a week.
For a sole trader earning €70,000, that replaces about 19% of income, and only after a year out.
That leaves the question every sole trader should ask: how long could your own savings carry you?
Ireland by the numbers
| The fact | Source |
|---|---|
| The average Aviva income protection claim lasted 7.8 years in 2025 | Aviva Ireland claims data, 2025 |
| People in Ireland expect their savings would last about five and a half months without income; 20% say under a month | Royal London Ireland survey, June 2026 |
| 46.1% of Irish households could not maintain their standard of living for three months without income | CSO, SILC 2025 |
| Psychological illness (26%), orthopaedic conditions (25%) and cancer (21%) caused most Aviva income protection claims | Aviva Ireland claims data, 2025 |
| An estimated 1 in 2 people in Ireland will receive a cancer diagnosis in their lifetime | National Cancer Registry Ireland |
Five and a half months of savings. 7.8 years of claim.
The average person told Royal London their savings would last five and a half months. The average Aviva income protection claim in 2025 lasted 7.8 years, roughly 17 times longer.
Most people can absorb the first month. The damage comes later. Month six, when the savings run dry. Month twelve, when your regular customers have found someone else. Year three, when you're choosing between selling your equipment and remortgaging your home.
Nor is it only a risk for later life. Aviva's youngest claimant in 2025 was 23, and one claim was paid just 13 weeks after the policy began.
It rarely ends a life. It regularly ends an income.
The biggest causes of claims are common, not exotic: mental health, back and joint conditions, and cancer. Cancer is a good example. Survival keeps improving: the National Cancer Registry reports five-year net survival of 86% for people diagnosed aged 15 to 44.
That's good news, and it changes the financial risk. The likely outcome of a serious illness today is not a death claim. It is months or years of treatment and recovery, when you're alive, your bills are live and you can't work.
Two ways the same illness plays out
Illustration: a sole trader with taxable profits of €80,000 injures their back and can't work for three years.
| When | Without income protection | With income protection (75% of profits, 13-week deferred period) |
|---|---|---|
| Weeks 1 to 13 | Savings cover the bills | Savings cover the bills |
| Month 4 | The overdraft starts paying the mortgage | €5,000 a month starts arriving |
| Month 12 | Savings are gone; customers have moved on | Still paid, every month |
| Year 2 | Invalidity Pension of up to €259.50 a week, if you qualify | Still paid, often with recovery support |
| Year 3 | Selling equipment or remortgaging is on the table | Back to work with your home and trade intact |
Over those three years, the policy pays €165,000. Over Aviva's 2025 average claim of 7.8 years, it would pay €468,000.
Everything in the right-hand column comes from one decision, made while you were well. Here is how that cover works.
How income protection works for sole traders
Income protection pays you a monthly income if any illness or injury stops you working, after a waiting period you choose, until you recover or reach your chosen retirement age.
It covers up to 75% of your taxable profits. With no Illness Benefit to deduct, sole traders can generally insure the full amount.
You choose when it starts. Deferred periods are usually 4, 8, 13, 26 or 52 weeks; the longer the wait, the lower the premium.
Revenue shares the cost. Premiums get income tax relief at your marginal rate, up to 10% of total income, claimed on your Form 11. At 40%, a €200 monthly premium costs you €120. Benefits are taxed as income.
Why no two sole traders need the same policy
A roofer with seasonal income and a solicitor with steady fees face the same risk but need very different cover. These details decide whether a claim pays:
Your occupation definition. You should be paid if you can't do your own job, not any job.
How your income is measured. Insurers check your accounts at claim stage, and some average several years of profit. If your income fluctuates, the wrong insurer can shrink your payout.
Your deferred period. It should match your real cash reserves, not a guess.
Your health history. Irish Life's 2025 claims review lists back and joint disorders among the common non-disclosures on income protection. Getting disclosure right now protects your claim later.
Frequently asked questions
Can sole traders get Illness Benefit in Ireland?
No. Illness Benefit only counts PRSI Classes A, E, H and P. Sole traders pay Class S, which does not qualify.
Is income protection tax deductible for sole traders?
Not as a business expense, but premiums get income tax relief at your marginal rate, up to 10% of total income, claimed on Form 11.
How likely am I to need income protection?
Industry "one in X" figures vary widely and are rarely traceable to Irish data. What Irish claims data shows is how long claims last once they start: 7.8 years on average at Aviva in 2025.
Your income is the engine of everything you've built
Over a 40-year working life, a sole trader earning €70,000 a year earns €2.8 million, before a single price increase. You insure your van, your tools and your public liability. The income they produce deserves the same care.
Your circumstances are your own: how your income moves, what you've saved, your health, your family and your plans. The right cover is designed around them, and that starts with a conversation.
Book an Income Protection Review with a Certified Financial Planner. Together we will:
Work out what your earnings are worth over your working life, and what the State would pay if they stopped
Test your savings against a long claim, not a short one
Recommend cover built around your trade, income and budget, with the tax relief included
Premiums are based on your age and health when you apply. The best time to protect your income is while you're well enough to. Book your Income Protection Review Here
This article is for general information only and does not constitute financial, tax or legal advice. Tax treatment depends on individual circumstances and may change. Financial Planning Matters is regulated by the Central Bank of Ireland.