If illness or injury permanently prevents you from working, TPD insurance through your superannuation can provide crucial financial support. Many Australians don’t realise that their super fund may include TPD insurance, or they don’t know how to access it. This guide explains what TPD insurance in super is, who is eligible, how to make a claim, and when to seek legal assistance.
It is important to note that some super funds impose time limits for lodging claims after leaving employment. Acting promptly helps avoid missing critical deadlines.
What is TPD Insurance in Super?
TPD insurance provides a one-off lump sum payment if you are permanently unable to work. Many super funds offer basic TPD cover, which can help with medical bills, rehabilitation, and daily living costs. To qualify, you don’t need to prove that your injury or illness is work-related. However, most super funds use an ‘any occupation’ test. This means you must prove that you are incapable of ever engaging in any occupation for which you are or may become reasonably suited by your education, training or experience.
In some cases, TPD policies also assess a person’s ability to perform activities of daily living, such as personal care or mobility tasks. This standard applies to severe disabilities where work capacity may not be the sole factor.
Meeting the Eligibility Requirements for a TPD Payout
To qualify for a TPD payout, your disability must prevent you from going back to your old job or working in any other job suited to your skills. Your condition also needs to be permanent and make everyday tasks, like personal care or getting around, much harder.
Many policies require that you stay off work for at least six months before you can make a claim. It’s important to act quickly because if your super account becomes inactive (unused for a long period), your insurance could be cancelled under government rules. The date when the disability began can also affect eligibility. A delay in filing a claim or a period of account inactivity may complicate the process if the insurance policy has lapsed.
What’s the Typical Range of TPD Payouts?
TPD payouts usually range from $60,000 to $500,000, but the amount depends on the coverage in your policy. Older policies or higher contributions may mean a larger payout.
If you receive the payout before turning 60 (the usual retirement age for super funds), part of it may be taxed. The exact tax depends on when you joined the Fund, and whether you take the payment as a lump sum or turn it into regular income. We advise our clients to seek financial/accounting advice regarding their withdrawal options before proceeding with any withdrawal of approved TPD funds.
Steps to Successfully Make a TPD Claim
To make a TPD claim, start by checking if your TPD insurance is active. You can do this by looking at your latest super statement or logging into your account.
Next, gather medical reports from your doctors and specialists. Fill out the claim form and send it to your super fund along with all the required documents. Your insurer may ask for more assessments, such as an independent medical exam, to confirm your condition. You may need to attend these appointments and provide extra paperwork if requested.
Once everything is submitted, the fund’s trustee (the organisation managing your super) will decide on your claim. Complex claims may take more than 12 months to process.
Common Challenges When Making a TPD Claim
The TPD claim process can involve several obstacles. Many claims are rejected due to missing or insufficient medical evidence. Gathering complete and detailed documentation is essential to avoid delays or rejections.
Another issue can arise with inactive accounts. Under the Protecting Your Superannuation laws introduced in 2019, if your super account doesn’t receive a contribution for 16 months, the insurance could be cancelled. You should be given the option to ‘opt-in’ and restore or maintain your cover, so it is important to ensure your personal details, especially address, are always updated with the fund.
Strict policy definitions for disability or impairment can complicate the process. Insurers may request independent medical assessments or even conduct surveillance, especially for conditions like mental illness or chronic pain, to verify the claim.
Carbone Lawyers can assist by ensuring compliance with policy requirements and addressing any challenges that arise during the claim process.
Examples of How Legal Expertise Can Help
Handling TPD claims can be complicated, especially if you have multiple super accounts. Each account may have its own TPD policy, and sometimes one payout can reduce the amount you get from another policy (this is known as an offset clause).
If your claim is denied due to missing evidence or strict policy rules, Carbone Lawyers can help. We’ll gather additional documents and appeal the decision if there are grounds to do so. We can also take your case to the Australian Financial Complaints Authority (AFCA), which resolves disputes between consumers and financial institutions. If AFCA’s decision isn’t favourable, further legal action may be required.
For mental health claims, comprehensive reports from psychiatric specialists are often necessary. Carbone Lawyers can manage the process to ensure that all relevant evidence is submitted, increasing the likelihood of success.
Contact Carbone Lawyers
Carbone Lawyers offers free assessments to help you understand your entitlements and begin the TPD claim process. Acting promptly ensures your insurance remains active and prevents any missed deadlines.
Speak with a specialist lawyer today for expert guidance on your TPD claim. Our team will assist you through every step to secure your entitlements. Call us or complete an assessment form to begin your claim.
FAQs on TPD Insurance in Super
How can I find out if I have TPD insurance in my super?
Check your latest superannuation statement or log into your account. Some funds offer TPD coverage only to members over 25 or with balances exceeding $6,000. If you are unsure about your coverage, Carbone Lawyers can conduct a free policy review.
Can I make multiple TPD claims?
Yes, you can lodge claims for each super fund where you hold TPD insurance. Legal assistance helps ensure that offset clauses are applied fairly and maximise your total payout.
What should I do if my TPD claim is denied?
If your claim is denied, your super fund must provide specific reasons for the decision. Carbone Lawyers can assist with appeals through AFCA, as well as other legal avenues if needed.
How long does it take to receive a TPD payout?
Most claims are processed within 6 to 12 months. However, more complex claims, particularly those involving mental health conditions or independent assessments, may take longer.