TPD Claim Guide | How to Make a Successful TPD Claim

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Superannuation TPD Claim Guide.

What is a TPD Claim?

A TPD claim is a claim for a lump sum payment under a TPD insurance policy. Most Australians have a TPD insurance policy connected to their superannuation funds, however some people also take out separate TPD policies. When you make a TPD insurance claim you’re claiming a lump sum on top of your superannuation fund balance.

What is TPD Insurance?

TPD stands for total and permanent disability. A TPD insurance policy provides you with a lump sum payment if you can’t work due to the severity of an injury or illness.

Am I eligible to make a TPD claim?

If you’ve been off work for three or more months due to injury or illness, with no prospect of returning to work, then it’s possible that you’re eligible to make a TPD claim. Different policies have different provisions and definitions, so you’ll need to check your policy to confirm that you qualify to make a claim.

What is considered a total and permanent disability?

As a general rule, if you’ve been unable to work due to an injury or illness for an extended period (usually more than three months) with no expectation to return to work, then you may satisfy the definition of TPD that applies to your policy.

Your TPD policy might cover you for:

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.

A specialist TPD lawyer will be able to look at your superannuation fund (or funds) and advise you about your TPD entitlements. Some law firms will provide free advice over the phone, so it’s worth calling before you make a claim.
A lawyer advising a client on making a successful TPD claim.

Making a Successful TPD Claim.

How do you successfully claim TPD?

To make a successful TPD claim you’ll need to contact your superannuation fund, and they will typically ask you to complete a number of forms. After an initial assessment, the super fund with pass your TPD claim onto the insurer to do an assessment. The insurer will then make a decision about whether to approve or deny your claim.

The key to successful TPD claims is completing the application thoroughly and providing all the necessary documents, such as medical records or workers compensation files, to substantiate your claim. However, since most people have never lodged a TPD claim before, they’re in a position where they’re simply responding to ad-hoc requests from the superannuation provider or the insurer, which can be a lengthy and frustrating process. If you make even one error during this process it can seriously jeopardise the success of your claim.

Many people use a specialist TPD lawyer to manage their TPD super claim on their behalf and give themselves the best possible chance of success. Some TPD lawyers will handle your claim on a no win no fee basis, so you only need to pay the legal fees after you receive your lump sum payment.

Why would a TPD claim be denied?

Some common reasons for insurers rejecting TPD insurance claims include:

  • Lodging your claim too late
  • Your policy becoming inactive – this may be because you closed your account or the account has been inactive for some time
  • Not meeting the definition of disability in your policy
  • Applying before the minimum waiting period
  • Not meeting work history requirements
  • A dispute over the evidence you have provided
  • Not meeting age restrictions
If your TPD claim has been rejected, you might still be able to get the insurer’s decision reversed. For example, if your TPD claim was rejected because it was lodged too late, there might be circumstances beyond your control that caused the delay. Speak to a specialist TPD lawyer to find out your options and whether you can get the insurer to reverse its decision.

What injuries and illnesses qualify for a TPD claim?

Here are some examples of injuries, Illnesses and mental health conditions that might qualify for a TPD claim. This is not a complete list, but includes some of the injuries, illnesses and conditions that can prevent people from working.

Examples of Injuries:

  • Carpal Tunnel
  • Loss of a limb
  • Back injuries resulting in spinal fusions
  • Loss of speech
  • Loss of hearing
  • Paraplegia
  • Quadriplegia

Examples of Illnesses:

  • Cancer
  • Motor Neurone Disease
  • Multiple Sclerosis
  • Muscular Dystrophy
  • Dementia
  • Alzheimer’s disease
  • Parkinson’s disease
  • Chronic lung disease
  • Severe rheumatoid arthritis
  • Cardiomyopathy
  • Primary pulmonary hypertension

Examples of mental health conditions:

  • Anxiety
  • Depression
  • Post-traumatic stress disorder (PTSD)
  • Schizophrenia
  • Bipolar disorder
A lawyer explaining the TPD claim process.

The TPD Claim Process

How long do TPD claims take?

Generally speaking, it takes 6-12 months for a TPD claim to be finalised.

Insurance companies generally assess TPD claims within six months. Some straightforward claims are finalised sooner– however with more complicated claims insurance companies often take longer than six months to make a decision.

Once the insurance company has made their decision on a TPD claim, the trustee of the superannuation fund must make their own separate assessment of the claim. This process usually takes between one and two months.

Can you claim more than one TPD payout?

If you have more than one TPD policy, you may be able to make multiple TPD claims – one for each policy. This is quite a common situation, as many people have multiple superannuation funds as a result of changing jobs over the years, and may have a TPD policy through each fund. Making a successful TPD insurance claim against one policy has no effect on any other TPD insurance you may have, but you’ll need to submit a separate claim against each policy.

How do I lodge a CTP Claim?

Here’s a step-by-step breakdown of the TPD claim process:

  • Identify all of your superannuation / TPD policies
  • Check if they were valid when you were injured or became ill
  • Take time to understand the approval criteria
  • Submit a thorough application, including all documents and medical records to substantiate your claim
  • Include a written submission explaining why the claim should be approved
  • Follow up with the insurer to make sure they have everything they need
  • Follow the dispute process if your claim is denied

Getting help with your TPD claim.

To make the claim process a lot easier and increase the likelihood of a positive result, many people use specialist TPD lawyers to manage their claims for them. The key to making a successful TPD claim is completing a thorough application and providing all the necessary documents, and the written submission explaining why your claim should be approved is also important. Specialist TPD lawyers have submitted hundreds of claims and know exactly what needs be done to get your claim approved.

Specialist TPD lawyers can also check your superannuation funds and find out what cover you have. If you have multiple superannuation funds, they can help you make multiple TPD claims.

Other things you should consider include:

  • Time limits for TPD claims
  • Minimum wait periods
  • Whether you meet work history requirements
  • Your age
  • Your evidence and whether it’s good enough
  • Any exclusions or eligibility clauses in your TPD insurance policy

These are all things that the best TPD lawyers can help you with and improve your chances of a successful TPD claim.

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A client receiving a TPD payout.

TPD Payouts

How much is a typical TPD payout from a superannuation fund?

TPD lump sums typically range between $60,000 and $300,000 but can be higher. You can find your insured benefit amount on your superannuation member statement if it has an attached TPD policy.

If you make a successful TPD claim, you’ll generally be given the option to then withdraw this lump sum from your superannuation account together with your existing superannuation account balance.

Is a TPD payout considered taxable income?

A TPD payout is not classed as taxable income, but if you withdraw any part of your TPD payout from your super fund as a lump sum, you’ll have to pay “superannuation lump sum withdrawal tax”. The amount payable is different for everyone, and if you have multiple super funds, the amount will be different for each fund you make a withdrawal from.

Here’s a summary of how superannuation lump sum withdrawal tax is calculated:

  • There’s no tax payable if you’re aged 60 or over
  • If you’re under 60, the amount of tax you’ll pay depends on your age and your “eligible service date” (usually the date you became a member of your superannuation fund)
  • If you haven’t reached your preservation age, then some of the withdrawal amount will be tax free, and some will be taxed at 22%
  • If you have reached your preservation age (but you’re not yet 60), you can withdraw up to $200,000 tax free
  • If you withdraw more than this amount, a portion of the additional amount will be tax free, and the taxable portion will be taxed at 22%

Do TPD payouts affect Centrelink?

A TPD claim payout has no impact on your Centrelink or other benefits (such as child support payments), because the lump sum is paid into your superannuation account. Superannuation is excluded from Centrelink means testing if you’re under the Centrelink Age Pension age.

However, if you withdraw your any part of your TPD payout (or any part of your existing superannuation) balance, it may impact your Centrelink entitlements. Different Centrelink benefits are means tested in different ways, so it’s a good idea to get professional financial advice on your entitlements before you access your TPD lump sum or superannuation account balance.

TPD Claim Story:

Mary’s story.

Mary was diagnosed with MS in 2015. Literally overnight her life became all about hospital visits and specialist appointments. But when she reached the point where she couldn’t work, Mary was suddenly faced with the reality of her financial future – and as a single mum with two kids, it looked pretty bleak.

It was actually Mary’s sister who asked if she had TPD cover through her super. She’d never heard of TPD and had to look it up – and to complicate matters, she had multiple super policies. Mary literally had a box full of ten years of unopened mail from her super funds, and was daunted by the prospect of going through them to work out what cover she had.

Mary saw an ad for Law Partners when she was Googling TPD so she called us and we took it from there. We went through her super statements and worked out Mary had five TPD policies. We got her a total payout of over $1million, which has been life-changing for Mary and her children.

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