Total and Permanent Disability (TPD) Claims
If you become sick or are injured and are unable to return to work, you may be entitled to make a total and permanent disability (TPD) claim.
Some people take out TPD insurance personally whilst many others will have TPD insurance under their superannuation policy. In some cases, you could have more than one superannuation policy with TPD insurance and you can make more than one claim.
If successful, a TPD claim can result in a large lump sum being paid out. The lump sum will include all of your superannuation contributions, as well as the insurance benefit amount, less any tax payable. Alternatively, you can choose not to receive a lump sum and to reinvest it (with a superannuation fund) or to receive monthly instalments.
Am I eligible to make a TPD claim?
If you become sick or injured and are unable to return to work, you may be entitled to make a total and permanent disability (TPD) claim. Most insurers and superannuation funds will require that you be off work for at least six (6) months before you become eligible to make an application for TPD insurance benefits.
It depends on what your policy of insurance or superannuation policy states but normally you have to show that you are unlikely to ever return to any work for which you are reasonably qualified by way of education, training or experience (or something similar to this). You do not have to prove that you will never, ever return to work. You only need to show that you are unlikely to return to any work for which you are reasonably qualified.
Once your claim had been approved and paid out, there would be nothing preventing you from using that money to retrain or re-educate yourself and then move into another field of work or occupation.
Some policies provide that you only have to show that you are unlikely to ever return to your own occupation (as opposed to any occupation), so if you are a carpenter and cannot return to doing carpentry work, then you would be entitled to your TPD insurance benefit, even if you could work at Bunnings providing customers with carpentry advice.
How do I make a TPD claim?
Once it becomes clear that you are not going to be able to return to work, you would contact your TPD insurer or superannuation fund and ask them to provide you with the relevant application forms to make a total and permanent disability claim.
The application process normally requires you to complete an Application Form for Total and Permanent Disability Benefits (or something similar) and for two (2) of your treating doctors to complete Medical Attendant’s Statements (or something similar) confirming that, in their opinion, you are unlikely to ever return to any work for which you are reasonably qualified. The insurer or superannuation fund also usually requires your employer to complete an Employer’s Statement (or something similar) which confirms that you were working when you became disabled through injury or illness.
The TPD insurer or superannuation fund will then compile any supporting information they require and may even ask you to undertake an independent medical examination at their cost before making a decision in relation to your claim.
Often, the claim will need to be approved by the both the TPD insurer (engaged by the superannuation fund) and the Trustee (ie the board) of the superannuation fund.
Once approved, the insurer or superannuation fund will ask how you would like the benefits paid (eg as a lump sum, as an annuity or reinvest all or some of the payout). You should seek financial advice about this before deciding.
How can our firm help?
It is important that you frame your Application for Total and Permanent Disability Benefits in the right way, so as to ensure that you are providing the full and complete picture to the insurer or superannuation fund about what work you have done, the duties involved and why it is that you can no longer do that type of work. We can help with this.
Sometimes treating doctors can also be sceptical about whether you are going to be able to return to work or not and they might not comprehend that this only relates to returning to work for which you are reasonably qualified (not all work whatsoever). We write to your treating doctors to explain the process and to make sure they fully understand the situation before they complete their Medical Attendant’s Statement.
Insurers also like to reject claims where they can. Often the insurer will obtain medical evidence, from one or more independent medical specialists, which provides that, in the specialist’s opinion, you can actually return to work in some capacity.
In cases where this is simply not right, we would set about obtaining expert medical evidence to the contrary. We would ask the medical specialists (eg an Orthopaedic Surgeon and/or an Occupational Therapist) the right questions in order to determine whether those return to work options are actually realistic. Once we have their medical report(s), we then provide submissions to the insurer or superannuation fund as to why the insurer’s decision to reject your claim is wrong.
If the insurer refuses to reverse their decision, then we would consider court action against the insurer and/or the trustee.
Don’t delay! Strict time limits can apply with respect to total and permanent disability claims. Speak with one of our expert personal injury lawyers today. We offer free initial advice.
So, what is required of you during the claim process?
You can live your life normally and we will take the pressure off you by handling the vast majority of your claim. What we will need from you might include the following:
- You will need to attend an initial appointment with us to provide relevant information about your TPD policy and your injury;
- You will need to provide us with your employment history and why it is that you believe you cannot return to any work which you have done in the past;
- You will need to provide us with copies of any relevant documents that might be required by the insurer including your resume / CV, employment information, tax documents and an impact statement (setting out how your injuries have affected you);
- You will have to review the Application for Total and Permanent Disability Benefits form, to ensure we have all details correct, and then sign that claim form;
- You may need to attend upon your doctors so that they can complete the Medical Attendant’s Statements, that we will send to them, in your presence; and
- You may need to attend some medicolegal appointments for us and the insurer to obtain independent medical evidence about the work restrictions that you have.
Once you have been off work for six (6) months, you will be able to lodge your TPD claim. You can, however, start preparing the relevant application forms and obtain all supporting evidence required before then, so that they are ready to go, if it seems obvious that you are not going to be able to go back to work.
The short answer is “as soon as possible”. This is so we can:
- determine what TPD benefits you might have;
- advise you as to your rights and entitlements;
- ensure that you are telling your doctors everything you need to tell them about your injury;
- assist you with lodging your claim;
- make sure that what you put in your application form is accurate and comprehensive;
- make sure that the doctors who are completing the Medical Attendant’s Statements have all relevant information; and
- determine whether you need independent medical evidence to support your claim (from, perhaps, an Orthopaedic Surgeon, a Psychiatrist and/or an Occupational Therapist).
No. If the injury or illness has caused you to be incapacitated for work, then you will have a right to bring a TPD claim. It does not matter what caused your injury or illness. Your injury does not have to have happened at work.
This will not necessarily be fatal to your claim. It depends on the terms of your policy.
If you were asked to disclose any pre-existing injury or illness and you failed to do so, then the insurer will try and “avoid” your policy and cancel your insurance (as if you had never taken out the insurance at all).
You should seek legal advice any time an insurer rejects your claim or voids your policy, as there may be steps that can be taken to appeal their decision.
To maximise your chances of getting the TPD payout approved, you should:
- Seek legal advice as early as possible;
- Really think about and document what duties are involved with the work you have done in the past and why it is that your injuries are now preventing you from returning to any work for which you are reasonably qualified;
- Make sure the doctors understand the duties that are required in those jobs and why it is that you cannot do some or all of those duties anymore; and
- Obtain supporting expert medical evidence where required.
If you return to work and remain employed, then you will not be entitled to make a claim under your TPD insurance.
If, however, you had to retrain in order to be able to return to work in a different capacity, then you may still be entitled to claim the TPD insurance benefits, but they will have to be paid into your superannuation fund, rather than you receiving a lump sum in your hand.
If you have attempted a return to work but failed to maintain that employment due to your injury or illness, then you would still be entitled to bring a claim.
Most times the TPD insurance is held within a superannuation policy. The claim, therefore, will be made against your superannuation fund and their insurer.
Some people, however, have private TPD insurance policies, so the claim in that case would be directly against the TPD insurer.
The amount payable if you are found to be totally and permanent disabled depends on the amount of TPD Insurance that you had as at the date of disablement (the date you last worked).
With TPD insurance held under a superannuation policy, the TPD benefit plus any superannuation benefits would be paid, less any tax payable on the superannuation benefits.
No tax is payable on private TPD insurance, so the amount insured would be paid out.
The amount that was payable as at the date of disablement (the date you last worked) is the amount that the insurer has to pay, even if that amount has since reduced.
The date of disablement is defined by the policy and can change from one policy to the next. It is, however, usually considered to be the date you last worked in your normal role, prior to becoming sick or injured.
If we consider your TPD claim to have reasonable prospects of success, then we will act on your behalf on a no win no fee basis.
This depends on how much work is done. Our fees are typically 20% to 40% less than the bigger firms and are extremely competitive compared to any of the smaller personal injury firms around.
Our unparalleled expertise and experience sets us apart from other firms and we pride ourselves on ensuring that our clients achieve the best results possible and that they always receive the lion’s share of any settlement.
For more information on how we charge, click here.
No. If you proceed to court and make a claim for breach of contract or breach of fiduciary duty, however, then you may be liable to pay some or all of the legal costs that the trustee of the superannuation fund and/or the insurer incurred.
The insurer has six (6) months to make a decision but they can extend that period of time if there are unexpected circumstances.
There are no time limits, however, on a trustee of a superannuation fund to make a decision unfortunately. You can, however, treat their failure to make a decision within a reasonable period of time as a rejection of your claim and can then pursue any other legal avenues available to you.
There are three (3) different ways to appeal a rejected TPD claim, namely:
- make an internal despite resolution (IDR) complaint to the superannuation fund’s complaints section;
- make a complaint to the Australian Financial Complaints Authority (after you have lodged an IDR complaint); and/or
- lodge proceedings in court.
An IDR complaint can be worthwhile, particularly in circumstances where you are able to obtain further medical evidence or other evidence to support your claim. If the complaint is about a decision of the superannuation fund, then they have 45 days to respond. If your complaint is about a decision of an insurer, they have 30 days to respond.
If you have no success with the IDR process, then you can lodge an appeal with the Australian Financial Complaints Authority (AFCA). The process with respect to these appeals is as follows:
- you lodge your appeal;
- a case manager is appointed;
- the parties exchange supporting documents and make submissions;
- a conciliation conference is held between the parties by phone;
- if there is no resolution at that conference, the case manager will provide their recommended outcome;
- the recommendation is binding if both parties agree; and
- if no agreement, then the complaint proceeds to the ombudsman for a final determination.
A determination by the ombudsman binds the superannuation fund and/or insurer if you accept it. It is not, however, binding on you and you can choose to pursue court action if you are unhappy with the determination. Only decisions involving superannuation funds can be appealed on questions of law to the Federal Court.
The third option with respect to appealing the decision of a superannuation fund and/or insurer is to commence court proceedings for breach of contract and/or breach of fiduciary duties (eg a failure to act in good faith). The matter then proceeds as a normal litigation matter. Unfortunately, this means that it can take many months, if not years, to resolve. There is, of course, a chance to negotiate a resolution of the matter at any time, including at a mediation which is normally held prior to the matter proceeding to trial.
The advantage of proceeding to court is that, if you are successful, you will recover the TPD insurance benefit plus at least some, if not all, of your legal costs as well as interest on the insured amount.
Yes. Once you become incapacitated and are confident that you are not going to be able to return to work (or at least any work for which you are reasonably qualified), you should ask your superannuation fund or insurer to cancel your insurance. That will then stop them from deducting any further insurance premiums.
If you did pay some premiums after you became incapacitated, you can ask for them to be reimbursed to you.
Yes. These claims can run concurrently and will not impact on each other at all. You can claim your TPD insurance, as well as any compensation or damages from your other claim.
No. TPD insurance is completely separate from any other claim and is not refundable.
Yes. You can make a claim for all three (3) where eligible. Payment of your TPD benefits will not impact on your NIIS or NDIS benefits.
Yes. You can be in receipt of Centrelink benefits and also receive TPD benefits. The only relevance that the lump sum you receive from your TPD insurance will have to Centrelink is in terms of your assets. If you remain below the asset threshold, then your entitlement to receive Centrelink benefits will not be affected.
You can lodge a TPD claim after you have been off work for six (6) months.
You have up to six (6) years after you became aware, or should have become aware, that you were totally and permanently disabled to make a complaint to the Australian Financial Complaints Authority (AFCA).
If you have already complained directly to the superannuation fund or insurer through its internal dispute resolution (IDR) process, then you need to make a complaint to AFCA within two (2) years of getting the IDR response from the fund or insurer.
With respect to court proceedings, you need to commence proceedings within six (6) years from the date of disablement.
These time limits may be extended in special circumstances, so if there is any doubt as to whether you are in time or not, you should seek urgent legal advice to discuss.
In Australia, the TPD insurance component of the lump sum that is paid to you is not taxable. Some of your existing superannuation benefits, however, will be taxed before being paid out to you. You should seek financial and/or accounting advice about this where applicable.
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*Strict time limits apply when making a claim. Do not delay.