Can You Work After a TPD Payout?
There are some situations where you can return to work after a TPD payout. For example, if new medications or rehabilitation techniques become available, and that results in an improvement in your condition, you might find that you’re able to retrain and take on some work.
The intent of TPD insurance is to provide a safety net to Australians who are unable to continue working due to an injury or illness, by paying out a lump sum benefit. But different insurers and policies have different definitions of total and permanent disability.
In this article we explain how to interpret your TPD policy to understand what you can and can’t do after a TPD payout.
Returning to work after a TPD payout – understanding your TPD policy.
If you’re making a claim for TPD, it’s important to understand the terms of your own TPD policy or policies. Definitions of total and permanent disability generally fall into two main categories:
- Being unlikely to be able to return to work in your occupation
- Being unlikely to be able to return to work in any occupation
So, with some TPD claims in Australia, you don’t necessarily have to be unfit for all work to make a successful TPD claim.
Being unlikely to be able to return to work in your occupation.
If your TPD policy pays a benefit for being unable to work in your occupation, that means you’re eligible to claim if you can no longer work in the occupation that suits your training and experience due to an injury or illness. So, for example, if you’re a qualified builder and you sustain a back injury that prevents you from doing building work, you can claim a lump sum benefit through your TPD policy.
However, in this example, the back injury may not prevent you from retraining and doing some other work – for example, working in an office job. So, under a policy with this definition it’s likely you can return to suitable work after your TPD payout.
Being unlikely to be able to return to work in any occupation.
If your TPD policy pays a benefit for being unable to work in any occupation, then you’re only eligible to claim if your injury or illness prevents you not only from working in your own occupation, but also from retraining and working in any other occupation.
So, for example, if you’ve developed a mental illness that stops you from going to work altogether, you would be eligible to claim a lump sum benefit.
But what happens in this example if you undergo new therapy that results in an improvement in your condition after your TPD payout? If your condition improves to the point where you can start to return to some sort of employment, then you can generally do so, even if you have received a lump sum TPD benefit.
Will I have to pay back my TPD lump sum if I return to work?
No – once a benefit has been paid out, there’s generally no requirement to repay it if you’re able to return to work in the future.
However, it’s important to note that when you make a TPD claim you must provide true and accurate information to the insurer so that they can correctly assess your eligibility for a payout. If you knowingly provide information that’s not true, then the insurer may claim that you made a fraudulent claim and seek repayment.
Once again, it’s important to note that different insurers and TPD policies have different terms and conditions, so it’s important to understand the terms of your policy before you make a claim.
Where can I get advice on my TPD claim?
Because the terms and definitions in TPD policies vary so much, it can be difficult to interpret your policy and understand your entitlements. Law Partners has a dedicated team of TPD specialists who have helped thousands of Australians make successful TPD claims.