Illness Benefit is an income support payment for people of working age who are unable to work due to illness and who satisfy certain social insurance conditions. The scheme is intended to provide income replacement for insured persons during short spells of incapacity or illness. Other payments such as Invalidity Pension and Disability Allowance are available to people who are unable to work long-term because of a disability or a medical condition.
Although only intended to cater for short term illness there was, prior to the introduction of changes provided for in the Social Welfare (Miscellaneous Provisions) Act 2008, no limit on the amount of time for which Illness Benefit could be paid to people who had more than 260 social insurance contributions. An OECD review entitled "Sickness, Disability and Work: breaking the Barriers" noted that paying illness or sickness benefit without a time limitation was very unusual across the OECD, and pointed to the risk that people in such circumstances will never return to the labour market.
Against that background, the 2008 Act provided that entitlement to Illness Benefit is now limited to two years (or 624 days) duration for claims arising after the 5th January, 2009. The new legislative provisions apply only to new claims and, accordingly, where a claim for illness benefit arose prior to the 5th January 2009, the previous arrangements continue to apply.