The short answer is you'll likely qualify for a TPD (Total and Permanent Disability) claim if you have TPD insurance and a serious illness or injury that permanently prevents you from working.
Let's unpack this further to make sure you have all the information you need.
Understanding TPD Insurance
TPD insurance pays a lump sum if you become totally and permanently disabled. Many Australians have this type of insurance through their superannuation fund, but it can also be a standalone policy.
Important Note: It is crucial to check your superannuation policy or standalone TPD insurance cover to understand the specific terms and conditions. Learn more - will a TPD claim affect your superannuation balance?
Two Main Types of TPD Insurance
- Own Occupation: This means your policy covers you if you can no longer work in your specific job or profession due to your injury or illness. This type of coverage tends to be more expensive and is often found outside of superannuation.
- Any Occupation: This is the more common type of TPD insurance within superannuation. It covers you if you can no longer work in any job that you might reasonably be suited to based on your education, experience, and training.
What Does "Total and Permanent Disability" Mean?
Though specific definitions may vary slightly between insurers, the general criteria are usually:
- You have a significant illness or injury: This could be a physical injury, mental health condition, or a combination of the two.
- You're unable to work in your usual job (for "own occupation" coverage) OR any job you are reasonably suited for (for "any occupation" coverage).
- Medical evidence supports that you're unlikely to ever recover enough to return to suitable work.
Examples:
- Construction Worker: A severe back injury leaves them unable to perform any heavy lifting or manual labor. They might meet the TPD criteria, especially under the "any occupation" definition.
- Accountant with Depression: A diagnosed mental health condition prevents them from concentrating or handling the responsibilities of their profession. Depending on the policy, they might meet the TPD criteria.
The 3-Month Waiting Period
The majority of TPD policies have a waiting period before claims can be made. This is a set period of around between 3 and 6 months, during which you must have been continuously unable to work because of your injury or illness.
These waiting periods are built into almost every TPD policy in Australia to ensure that your disability is not temporary.
In our experience, this waiting period is a common surprise for people who want to make a TPD claim. A lot of people assume that they will be able to lodge a claim as soon as they stop working. When they discover that there is a mandatory waiting period, they often worry they have missed an important deadline.
You should not wait to get help
Just because you have to wait to file your claim doesn’t mean you should simply sit around doing nothing for 3 to 6 months. It’s a good idea to engage an experienced lawyer at the earliest opportunity so they can begin working on your claim before the waiting period ends.
During the waiting period, a lawyer can:
- Search for your super fund(s) and request copies of your TPD policy
- Find out if you have TPD cover through more than one fund (a lot of people do)
- Begin gathering vital medical evidence and reports from your treating doctors and other specialists
- Review the wording of your policy in order to understand whether you are covered under an "own occupation" definition (unable to do your specific job) or an "any occupation" definition (unable to do any job you are suited to by education, training and/or experience)
Preparing thoroughly in this manner will let you submit your claim the moment the waiting period ends and let you get the compensation you deserve as soon as possible.
Your Injury Does Not Have to Be Work-Related
It’s a common misconception that only people who were injured at work can make TPD claims, but that’s actually not the case.
Total and Permanent Disability (TPD) insurance provides cover based on your inability to work, not how or where you suffered your injury or illness. Whether you were hurt at work, at home or playing sport, or if you became unwell due to a medical condition, is immaterial.
A lot of people we speak to regarding TPD claims are under the assumption they can only claim TPD for a workplace injury, but they’re wrong. TPD is an insurance policy attached to your superannuation that pays out when you meet the policy definition of being totally and permanently disabled, regardless of the cause.
What conditions can you claim TPD for?
TPD claims can be made for a wide range of injuries and illnesses, including:
- Back and spinal injuries (whether from work, a car accident or a fall at home)
- Mental health conditions such as depression, anxiety and PTSD
- Chronic illnesses, including cancer, heart disease and autoimmune conditions
- Genetic and degenerative conditions such as multiple sclerosis or Parkinson's disease
- Traumatic brain injuries from any cause
One of our recent clients injured her back at home and didn’t realise she could actually make a claim, incorrectly assuming that TPD was only for workplace injuries. Her eventual payout was $200,000.
If you have suffered an injury or illness which prevents you from working, the cause won’t disqualify you from making a claim.
Also read: The TPD Claims Process: Step-by-Step Guide
What Matters Is Your Policy at the Time of the Injury, Not Now
It’s vital that you understand this key point about TPD claims: your entitlement is based on the insurance cover you had when you became unable to work, not the cover you currently have.
We regularly speak to people who incorrectly assume they have no TPD cover and, therefore, nothing to claim. However, what matters is the cover they had at the time they were rendered unable to work.
That insurance can still be accessed even if the fund has merged or been closed.
Why your current super balance does not tell the full story
There are several things that can change between the time you stopped working and the time you check your super:
- Your super balance may have been reduced due to ongoing insurance premiums, fees and/or withdrawals
- Your fund may have cancelled your TPD cover because of inactivity or a low balance
- Your fund may have merged with another, and the new fund shows different cover
None of these changes affect your right to claim under the policy you had at the time you became unable to work.
The 12-month employment rule
If you were employed within 12 months of the time your injury or illness prevented you from working, it’s almost certain that you had default TPD cover through your employer's super fund. The majority of Australian employers are required to make superannuation contributions for their employees, and most default super funds automatically include TPD insurance.
If you can't remember the name of the fund, or the fund no longer exists in its original form, a lawyer will be able to find your lost super and trace your TPD insurance through the Australian Taxation Office and the fund's records.
Under 25? You May Not Have TPD Cover
If you are under the age of 25, you might not have TPD insurance through your super fund regardless of whether your employer is making regular super contributions.
The Putting Members' Interests First Act 2019 (Cth) made it so that super funds cannot automatically take out TPD insurance (or life insurance) for members under 25. This change was to protect young and casual workers from having their super balances whittled away by insurance premiums they did not need or know about.
The practical effect of this is that most workers under 25 need to actively opt in so they can get TPD cover. If you’re under 25 and unable to work because of injury or illness, it is still worth checking your fund's records.
Some workers opt in without remembering, and certain employer funds applied for exemptions from this rule. A lawyer will be able to confirm your cover by requesting your policy documents directly from the fund.
Your Cover Decreases as You Get Older
TPD cover typically reduces as you get older, with certain policies ending entirely once people reach 60 or 65. The exact age and reduction schedule depend on your specific fund and policy, but the general rule is the same across most funds: the amount you are insured for goes down each year after a certain age.
We have found that most people over 55 are surprised to learn their TPD cover is much lower than it was a decade ago, or even that it has expired entirely. If you are approaching 60 and believe you may have a TPD claim, it is worth checking your cover amount as soon as possible.
What this means in practice
- A worker who had $200,000 in TPD cover at age 45 might have $80,000 or less by the time they reach 58
- Some policies reduce cover in stages (for example, a reduction every 5 years after age 50)
- Some policies end completely at 60, while others continue to 65 but with reduced cover
- If your cover has dropped, the amount you can claim is based on the cover in place at the time you became unable to work, not the original or maximum amount
If you are over 55, have a serious injury or illness and have not yet looked into TPD, do not delay engaging a lawyer to help you. The difference between checking your cover at 58 and checking it at 61 could be drastic
What if I Only Meet Some of the Criteria?
Insurance policies can be complex. It's important to seek expert legal advice about your individual situation. You could still have a claim, even if you don't seem to fit the exact definitions.
How Smith's Lawyers Can Help
If you have been injured or contracted an illness that permanently prevents you from working and want to know if you qualify for a TPD claim, contact us for a free case review.
- Free Initial Consultation: We'll review your policy and your circumstances to give you clear advice on whether you have a potential claim. Phone us at 1800 960 482.
- No Win, No Fee. No Catch®: We know financial stress is the last thing you need. That's why we operate on a ‘No Win, No Fee, No Catch’ basis, meaning you won't pay a cent if your claim is unsuccessful.
- Experts at Getting TPD Claims Approved: Our lawyers have decades of experience successfully navigating complex insurance claims. We'll fight for your right to the compensation you deserve.
Don't delay; contact Smith's Lawyers today and find out if you qualify for a TPD payout.
