TPD Insurance Claims in Australia

What is TPD insurance and where do you have it?

TPD insurance pays a lump sum if you become totally and permanently disabled because of illness or injury. It can help with living costs, medical care, home modifications and one-off expenses (Moneysmart). Unlike a negligence claim, no one has to be at fault, and unlike workers compensation the injury does not have to be work-related.

Most people are covered without knowing it. Super funds usually provide default TPD cover, and you can also hold a policy directly with an insurer or through a broker. If you have had more than one job, you may have cover in more than one fund. Check every super statement, and ask each fund for the insurance certificate and the product disclosure statement (PDS).

The definition decides the claim

Every insurer defines total and permanent disability differently, and the definition in your policy is the test you must meet. Moneysmart describes the three common definitions:

Read the PDS so you know which definition applies, when cover started and ended, any exclusions for pre-existing conditions and whether a waiting period applies (Moneysmart). The date you stopped work matters because cover must have been in force at that time.

How a TPD claim works, step by step

1. Find the cover. Ask each super fund whether you had TPD cover on the date you last worked and request the policy terms.
2. Notify the fund. Tell the fund you intend to claim. The fund passes the claim to its insurer.
3. Complete the claim forms. Your statement, an employer statement and treating doctor reports. The insurer may arrange its own medical examinations.
4. Wait for the assessment. Insurers assess capacity for work against the policy definition, often over several months. Keep treatment going and keep records of every appointment.
5. Receive the decision. If the insurer accepts, the fund pays the benefit into your super account or to you. If it declines, you receive written reasons.

The claim is against the policy, not against anyone who caused the injury, so you can pursue it alongside a CTP, workers compensation or negligence claim. Tell your lawyer about every claim so that offsets are handled properly.

Tax, timing and other things people are not told

Moneysmart warns that a TPD payout may be taxed at up to 22% if you are under 60, so the amount you receive may not match the cover on your statement (Moneysmart). Get advice on how and when to withdraw the benefit from super, because the timing can change the tax.

Policies also carry conditions on when cover stops: leaving a fund, an inactive account, reaching a certain age or missed premiums. Cover inside super can also be switched off automatically on low-balance or inactive accounts unless you opt in. If your account has been inactive, ask the fund exactly when cover ceased.

Unlike court claims, TPD claims do not have a single statutory limitation period, but policy conditions, super rules and complaint time limits apply. Do not wait: evidence of your capacity at the time you stopped work becomes harder to collect every year.

What the insurer looks at

Insurers assess a TPD claim against the policy definition on the evidence, and four things carry most weight:

• Treating doctor reports. Your GP and specialists are asked whether you are unlikely ever to return to work within the definition. Consistent, detailed reports matter more than the number of them.
• Your work history and training. Under an “any occupation” definition the insurer considers every job your education, training or experience suits, not only the one you had. A clear account of your skills and limits helps.
• Treatment and rehabilitation. Insurers look for a stabilised condition and attempts at treatment or retraining. Gaps in care are read as capacity.
• Independent medical examinations. The insurer may send you to its own specialists. Attend, be accurate and keep a note of what was said.

Keep copies of every form and report you submit. If the insurer asks for more information, respond in writing and keep the dates; delay on the insurer’s side is itself a ground of complaint.

If the claim is declined or delayed

A declined claim is not the end. First use the fund’s internal complaints process. If that fails, the Australian Financial Complaints Authority (AFCA) can consider complaints about superannuation trustee and insurer decisions, including declined disability claims and unreasonable delay. AFCA’s superannuation jurisdiction has no monetary limit, but specific time limits apply to some superannuation complaints, so lodge promptly (AFCA).

A lawyer is most useful when the medical evidence has not been presented against the right definition, when the insurer relies on a pre-existing condition exclusion or when there is more than one fund. Ask about experience with super and insurance claims and about how fees are calculated on a lump-sum claim. Our No Win No Fee guide lists the questions to ask.

TPD alongside your other claims

A TPD benefit does not depend on who was at fault, so it can run beside a workers compensation claim, a car accident claim or a negligence claim. Each has its own rules about whether other payments reduce it. Keep a list of every claim, benefit and decision with dates, and share it with anyone advising you. The compensation calculator covers injury claims, not insurance benefits, so treat TPD as a separate line in your planning.

Frequently asked questions