Most workers fully recover from their injuries or illnesses, but for those who don’t, TPD insurance can offer vital compensation. A TPD claim provides financial support in the form of a superannuation lump sum.
TPD insurance is provided through your superannuation fund provider or insurer. Many people get help from a TPD claims lawyer to make the process easier and their case stronger.
What is TPD insurance?
TPD stands for Total and Permanent Disability, also known as Totally and Permanently Disabled. Total and permanent disability insurance is designed to cover bills and the cost of living for those who can’t go back to work because of severe sickness or injury.
Eligibility for a total and permanent disability claim
To make a successful TPD claim, you must meet all the criteria of the claims assessment, which will vary based on your insurance policy. There are five factors that the claims assessor will consider when they evaluate your TPD claim:
- Severity of disability – the level of disability needs to be severe enough that you are unable to return to work in the future and that you will need ongoing medical treatment.
- Superannuation coverage – there are two different types of TPD insurance for workers: own occupation and any occupation. Own occupation TPD means you cannot work your own occupation anymore. Any Occupation means that you cannot work any occupation that you are qualified for.
- Length of employment – you must have a minimum of 12 months of work history to qualify for compensation. Whether you worked part-time or full-time is considered, as well as your hours.
- Ability to perform daily tasks – some policies cover expenses for services that help you with day-to-day activities such as grooming, walking and eating.
- The need for ongoing medical care – the injured party must prove that they have an ongoing medical condition. Proof of medical-related appointments is enough to meet this criterion.
Common TPD claim injuries and illnesses
There are many different physical and mental conditions that can qualify you for a TPD claim. Below are some of the most common injuries, diseases and mental health disorders that can cause permanent disability.
- Amputation of a body part
- Carpal tunnel syndrome
- Hearing loss
- Spinal injuries
- Loss of vision in one eye
Illnesses and Diseases
- Heart Disease
- Alzheimer’s Disease
- Multiple Sclerosis
Mental Health Conditions
- PTSD (post-traumatic stress disorder)
- Bipolar Disorder
How to lodge a TPD claim
The claims process will vary based on the type of superannuation fund you have and the insurance company. However, the process is generally the same for everyone. Here’s how it works.
- Collect all of your TPD insurance policies.
- Check to see if they were active at the time of your injury or illness.
- Make sure you meet the criteria.
- Contact your insurer or superannuation fund to lodge.
- Include a written statement that explains why your claim is valid.
- Follow up with the insurer to make sure they have all the documents and information that they need.
If your claim is denied you can file a dispute with the insurer through their Internal Dispute Resolution Process (IDR).
Important things to know about the TPD claim process
Making a successful TPD claim isn’t easy. Unfortunately, some cases are complicated and contentious. The application needs to be meticulously filled out and all the documents to substantiate the claim e in order. Another important part of the application is a submission letter that explains why your claim is valid.
Every so often news stories of insurance companies unjustly denying people their benefits appear in the headlines. This doesn’t happen in most cases, but it does show how important it is to understand your policy.
This is why many people turn to a professional who specialises in TPD insurance claims. Lawyers who work with TPD claims can help you locate all of your TPD policies. They can also minimise the risk of rejection.
Some important factors to consider before making a TPD claim are:
- The time window for lodging a claim.
- Waiting periods.
- The insurer’s definition of TPD.
- Whether you have enough evidence.
- Exclusions or age limits.
A TPD specialist can determine how strong of a case you have for a payout and help you get everything you are entitled to.
Tips for making a successful claim
- Know what you are covered for. Before you file a TPD claim, it helps to read your policy thoroughly so you know what kind of coverage you have. Gather your medical records and any other evidence proving your claim.
- Get in touch with your insurance provider. It’s important to cooperate with your provider during the process and give them as much information as possible. It is also your responsibility to disclose any relevant information related to the TPD claim to your provider. You may also be required to attend post-illness rehabilitation or medical appointments.
- Get your documents in order. Paperwork is an incredibly important part of the process. You need to fill out the application completely and provide all the necessary documents to support your claim. Don’t forget to double-check your application before submission, as even one mistake can put the application at risk of being rejected. While the claims process can be complicated and lengthy, if you have an eligible claim, a carefully written application and the time available to correspond with the insurer, anyone can submit a strong case.
Why do TPD claims get rejected?
Your TPD claim may be denied if your insurance company doesn’t feel that you meet the criteria for benefits. Below is a list of some of the common reasons TPD claims are denied:
- Lack of necessary medical documents
- The claim was lodged too late
- The insurer feels you don’t meet the disability criteria in your policy
- A dispute over the evidence
- Because of a pre-existing condition
- Medical treatment is deemed as inappropriate
- The disability occurred before the elimination period ended
If your TPD claim was rejected, don’t give up. You still have options. If your claim was denied because of paperwork or because it was lodged too late, you may still be able to get it approved. If you have questions about your total permanent disability claim, contact us today to get advice from a legal expert.
How long does it take to process a TPD Claim?
On average, cases take 3-12 months to process. If there are no disputes or issues with the application, a typical claim should be processed within three months of the date you completed the application. Some cases are more complicated and can take up to six months to settle. Difficult cases can drag on for years. After your claim is assessed the insurance provider will accept, decline or defer the TPD claim.
Can you claim more than one TPD payout?
It’s common for people to have two or more superannuation funds from working different jobs over the years. If you have more than one superannuation account, you can file multiple claims for the same injury. You will be taxed based on how you use the superannuation fund lump sum, and each policy will have a different tax rate.
What is the average superannuation fund lump sum?
There are thousands of TPD claims paid out each year. Superannuation lump sums can be anywhere from $60,000 to $300,000. Once the insurer awards the benefit, you have the option to accept the payment in full or by instalments. You can offset taxes if you leave the full amount in the superannuation account until you reach preservation age, which depending on when you were born is between 55-60.
Do you pay tax on a TPD payout?
TPD payouts are not taxable after the claim is approved and placed into your superannuation account. It is taxable once you withdraw any part of your payment from the account before the preservation age.
Here’s how the superannuation lump sum is taxed:
- Clients over 60 will receive funds tax-free.
- For those under the age of 60, assessable income is taxed.
- Some withdrawals are taxed at 22%, while some are exempt from taxes.
- If you have reached the preservation age and are under 60, you can withdraw up to $205,000 tax-free.
Do TPD payouts affect Centrelink?
A TPD claim payout will not affect your Centrelink pensions or other benefits (Disability Support Pension, Child Care Subsidy, etc) because the money is put into a superannuation account. The withdrawal of superannuation/TPD funds is not considered for Centrelink means-testing as long as you are under the Age Pension age.
However, what you do with the TPD funds may affect your Centrelink benefits. For example, if you withdraw money to use for legal fees or debts, it will not have any effect on your Centrelink benefits. If any money remains in your account after you’ve made payments, it could lead to a reduction in Centrelink benefits.
Centrelink has different means-testing for different types of payments. Financial advisors are helpful for guidance on how you can withdraw your superannuation TPD lump sum to avoid unnecessary taxes.
A TPD claim success story
After she graduated from university, Julie climbed the corporate ladder in the design industry. She was a single mom with a good job. Everything was going well until bowel cancer entered the picture. Her symptoms gradually developed until she could no longer work. Her diagnosis was confirmed and she felt like everything in her life was slowly slipping away.
One day, her brother asked her if she had TPD coverage through a superannuation fund. She didn’t even know what TPD was but they found out that she had multiple policies. They were hopeful but discouraged by mountains of unopened superannuation fund statements. It would take a lot of work to figure out what kind of coverage she was entitled to.
Julie found What’s My Claim Worth through an ad on Google about TPD claims and contacted us. We set her up with a legal expert who went through her statements and found out that she had six policies.
She was awarded a TPD payout of a million dollars. She finally had time to rest and focus on her treatment. He also didn’t have to worry about how she was going to feed her children, buy them school supplies and live her day-to-day life.
How can What’s My Claim Worth help?
We can assist in calculating the value of your TPD claim and connect you with our network of specialist TPD lawyers who can work with you to get you the best outcome — No Win, No Fee (excluding defendant costs if the claim is litigated).