Yes, you can often claim Total and Permanent Disability (TPD) insurance after losing your job through redundancy or termination, as long as your cover was active when your illness or injury first prevented you from working.
Key points:
- TPD eligibility depends on when your disability began, not your employment status
- Redundancy or termination does not automatically cancel TPD cover
- Cover may continue after job loss if superannuation requirements are met
- Claims can often be lodged after employment ends
This guide will:
- Explain when you can claim TPD after redundancy or termination
- Show how to maintain TPD cover while unemployed
- Outline key time limits and eligibility rules
- Identify the steps to take if you develop a disabling condition
Understanding TPD Claims After Job Loss
Does TPD insurance require current employment?
No. TPD insurance assesses your condition based on when you stopped working, not when you make the claim. This means you can lodge a TPD claim months or even years after losing your job, provided your disability occurred while your cover was active.
Example: Sarah was made redundant in January 2024. In March 2024, while still covered, she was diagnosed with severe depression, preventing her from working. She can claim TPD even though she's been unemployed since January, because her disabling condition arose while her cover was active.
How does redundancy affect my TPD cover?
Redundancy doesn't immediately cancel your TPD cover, but it creates risk. Your cover continues as long as you remain a super fund member and meet insurance continuation requirements.
The main danger is the 16-month inactivity rule under the Protecting Your Super reforms. If no contributions are made to your super account for 16 consecutive months, your insurance cover, in many cases, will be automatically cancelled.
Key points:
- Your cover doesn't end the day you lose your job
- Making even small voluntary contributions keeps your cover active
- Some super funds offer temporary cover extensions during unemployment
Your Rights and Obligations
What you're entitled to:
- Maintain TPD cover during unemployment by making voluntary super contributions, preventing automatic cancellation under the 16-month rule
- Claim TPD retroactively if your disabling condition began while your cover was active, even if you lodge after your cover has lapsed
- Access multiple TPD policies if you have cover through different super funds, potentially increasing total compensation
What you must do:
- Contact your super fund as soon as possible following redundancy to confirm cover status
- Make regular voluntary contributions before the 16-month deadline. Even $10 per month can keep cover active. These can be made through your MyGov account
- Notify your insurer within policy timeframes once you become aware that you meet the TPD definition
Common Scenarios and Questions
Can I claim TPD if I was made redundant 6 months ago and am now too sick to work?
The short answer: Yes, if your illness developed while your cover was still active.
What to do:
- Check when your symptoms began. If they started before the cover lapsed, you can claim based on that onset date
- Contact your super fund immediately to confirm cover status
- Gather medical evidence showing when your condition began and how it is preventing you from working
Important note: Timing is measured from when your disability occurred, not when you lodge the claim.
What if I withdrew my super after redundancy? Have I lost my TPD cover?
The short answer: Possibly, yes. If you closed your super account entirely. Partial withdrawals may not affect cover.
What to do:
- Check with your fund immediately whether your account and insurance remain active
- Review the withdrawal paperwork to see if you cancelled your insurance
- Check other super funds using the ATO's online services to find your super
Important note: Closing a super account typically cancels whatever insurances were associated with it. Always contact your fund before making withdrawals.
Does the 16-month rule mean I have 16 months to claim after redundancy?
The short answer: No. The 16-month rule is when your coverage automatically cancels if you make no contributions. It’s not a deadline on when you can make a claim.
What to do:
- Make voluntary contributions before 16 months expires to prevent cancellation
- Understand you generally need to be off work for 6 months before lodging, and have up to 6 years from the date of disablement to complain to AFCA
Important note: The 16-month clock starts from your last contribution, not your termination date.
Can I claim if I was terminated for performance issues while already sick?
The short answer: Yes, the reason for termination doesn't affect your TPD eligibility if you meet the criteria for being disabled.
What to do:
- Document when your health issues began relative to employment problems
- Obtain medical evidence linking your condition to the inability to work
- Focus on your medical disability, not termination circumstances
What's the difference between ‘own occupation’ and ‘any occupation’ TPD definitions?
The short answer: ‘Own occupation’ TPD assesses the inability to perform your pre-disability job. ‘Any occupation’ requires the inability to work in any job you're suited for by education, training or experience.
What to do:
- Check your policy's TPD definition by requesting your Product Disclosure Statement (PDS)
- For ‘own occupation’ policies, medical evidence should focus on your specific pre-redundancy job duties
- For ‘any occupation’ policies, gather evidence showing you cannot perform any work you're reasonably qualified for
Important note: ‘Own occupation’ policies may transition to ‘any occupation’ after 2-5 years. It’s important to check these details and stay abreast of any notifications of changes. Learn more about Own Occupation' vs. 'Any Occupation in TPD policy definition.
Can I claim TPD from multiple super funds if I had several jobs?
The short answer: Yes, if you maintained separate TPD policies through different super funds, you can potentially claim from each.
What to do:
- Identify all super accounts using the ATO's MyGov service
- Check each fund's insurance status as of the date you were given disabled status
- Lodge separate claims with consistent medical evidence across all claims
Step-by-Step Process to Protect and Claim Your TPD Cover
- Contact your super fund within 2-4 weeks of redundancy to confirm TPD cover status
- Set up voluntary contributions immediately if you're not working; even $10 a month maintains cover
- Keep health records from the date you first stopped work, including symptom onset dates and doctor visits
- Confirm you meet the TPD definition after being off work for 6 months (or your policy's waiting period)
- Request your insurance documents, including policy wording, PDS, and benefit statement
- Obtain comprehensive medical evidence from treating doctors, specialists, and independent examiners
- Lodge your TPD claim with all medical evidence, employment history, and proof that your cover was active
- Follow up on the IDR process if your claim is denied (super funds have 45 days to respond)
- Escalate to AFCA if needed; do this within 2 years of the IDR response
Documents you'll need:
- Medical reports and specialist assessments demonstrating you meet the policy's TPD definition
- Employment and superannuation records proving your cover was active when you became disabled
- Functional capacity evidence demonstrating how your condition prevents you from working
Legal Framework
Primary legislation: TPD claims are governed by the Superannuation Industry (Supervision) Act 1993 (SIS Act), which defines TPD standards, and the Insurance Contracts Act 1984 (ICA), which regulates policy terms.
What this means for you:
- Your policy terms at the disablement date apply: Recent Federal Court decisions confirm insurers assess claims under the policy as active when you became disabled
- Super funds must act fairly: The SIS Act requires trustees to act in members' best interests
- You have dispute resolution rights: Free dispute resolution through AFCA (Australian Financial Complaints Authority); it handled over 1,200 TPD disputes in 2023-24
Red Flags and Warning Signs
When to act immediately:
- You've been made redundant with a chronic health condition - Contact your super fund within weeks; don’t wait for the 16-month clock to run out
- You've received a TPD denial based on lapsed cover - However, you believe your disability began while covered
- Your super fund is sending cancellation warnings - Contribute immediately, even by a relatively small amount
- You stopped work due to illness, but your employer recorded it as a resignation - Gather clear medical evidence of when your disabling condition began
Common mistakes to avoid:
- Withdrawing all your super without checking if this will cancel the insurance plan
- Waiting too long to lodge, thinking you need to be unemployed for a specific period
- Assuming redundancy cancels your cover
- Failing to document when symptoms began relative to your cover dates
When to Seek Legal Advice
Get advice as early as possible, especially if:
- Your TPD claim has been denied due to lapsed cover, insufficient evidence, or policy exclusions.
- You're unsure whether your disability occurred while your cover was active, or you've missed the 16-month deadline
- Your super fund is delaying your claim or requesting excessive information
- You have multiple potential claims across different super funds or compensation schemes
Seeking legal advice early on can help you:
- understand your full rights, including retrospective claims or appeal options
- access rehabilitation and support services sooner
- protect your claim from pitfalls like inconsistent statements or missed deadlines
- meet AFCA's strict time limits
Key Takeaways
Remember these essential points:
- Redundancy doesn't automatically cancel TPD cover - Insurance typically continues until you've made no super contributions for 16 months under the Protecting Your Super legislation
- You can claim TPD after losing your job if your disabling condition arose while your cover was active
- Make voluntary super contributions to prevent the 16-month auto-cancellation
- Timing is measured from disability onset, not claim lodgement - You can often claim retrospectively even if your cover has lapsed
- Contact your super fund immediately after redundancy to confirm cover status before the 16-month period ends
Get Help Now
Smith's Lawyers has extensive experience helping Australians navigate TPD claims after redundancy, including complex cases involving lapsed cover, multiple super funds, and AFCA appeals.
Contact Smith's Lawyers today:
- Call 1800 960 482 for a free, no-obligation consultation with our TPD claims specialists
- No upfront costs: We operate on a No Win, No Fee, No Catch® basis
- Request a call back: Use the form below to have our experienced team get in touch at a time that’s convenient for you
Don't let redundancy or termination fears stop you from claiming the TPD benefits you're entitled to. Contact us today to discuss your situation and protect your rights.
