You can sometimes claim total and permanent disability cover when you are not working, but the date you stopped work and whether your cover was still in force usually decide the claim.
Mostly, yes. The two questions that matter most are the date you ceased work, and whether your cover was still in force at the time.
Many people assume that TPD is only for those who are in a job when they become unwell. That is mostly correct, but not how some policies are written. The policy wording, not the assumption, decides who qualifies.
Why the date you stopped work matters
TPD cover is usually held through a superannuation fund, and the cover is provided by an insurer under a group policy. Most policies ask when you stopped work and why. Two dates tend to carry weight:
- the date you last worked, and
- the date your illness or injury began to stop you from working.
If you stopped work because of your claimed condition, the insurer will usually look at what happened on and around that date. If you stopped work for another reason first, such as redundancy, caring for family or a break from work, the insurer will look at whether the condition was already disabling you, and whether your cover was still in place.
The same facts can be read in different ways. That is why records from the time, such as medical notes, employer letters and fund statements, are so useful.
Why cover being in force matters
Cover under a super fund can end or change. Your TPD cover can be affected significantly through various conditions, such as periods without contributions (usually understood to be 16 months), a change of fund, reaching a certain age or a cap on cover for people who have been out of work. Some funds also write to members before cover lapses, and some send those notices to an old address rather than by email.
Because of this, a claim from someone who is not working often turns on a simple question: was the cover still active when the disability began, or when the person stopped work? If you have more than one fund, that question may have more than one answer. Our FAQ on multiple super funds explains why it is worth checking each of them.
How the definition applies when you are not employed
TPD definitions are not the same across funds. Broadly, they fall into two kinds.
| Kind of definition | Who it usually applies to | What the insurer tests |
|---|---|---|
| Own occupation or any occupation | People who were working before the disability began | Whether you are unlikely ever to return to work suited to your education, training and experience |
| Activities of daily living | People who were not working, or not working regularly, when the disability began | Whether you cannot perform certain everyday tasks without help, or cannot do them at all |
Some policies use only one of these. Others apply one test to people who were working and a different test to people who were not. A person who has been out of work for a long time may find the second kind applies to them, and that test is measured against daily life rather than a former job.
For a fuller picture of how the main test works, see our article on what a TPD claim is. The related FAQ about still working a little covers the opposite situation.
Common situations
Each of these comes up often, and none has a single answer:
- You lost your job before you became unwell. The insurer may ask whether the disability or the job loss came first, and whether your cover continued after you left the employer.
- You stopped work because of your health, then left it a long time. Delay is not automatically fatal, but the policy may set strict timeframes for giving notice of a claim. Prompt advice is wise.
- You are between jobs. The question is usually whether your cover continued during the gap and which definition applies to you.
- You are caring for others or studying. The insurer may treat you as not employed, and the daily living style definition may apply.
What the insurer will want to see
Whatever your situation, expect requests for:
- the policy or product disclosure statement that applied on the relevant date,
- your employment history, including the date and reason you stopped work,
- medical evidence about your condition and how it affects you, and
- evidence about your cover, such as statements and notices from the fund.
The insurer must follow strict timeframes set by the regulator when it handles a claim. The claim should not drift because you are unsure whether you qualify.
Money questions that follow
A claim can raise questions that sit outside the law, such as how a payment is treated for tax, how it interacts with Centrelink, or whether it affects child support. These arise because a TPD payment may be made out of a super fund, and they depend entirely on your own circumstances. They belong with your accountant or financial adviser. We give legal advice, not tax or financial advice.
What to do next
If you have stopped work because of an illness or injury and are not sure whether you can still claim, do not assume the answer is no.
- Write down the date you last worked and the date your condition began to affect you.
- Collect your fund statements and any letters about your insurance cover.
- Gather your medical records and the names of the doctors treating you.
- Seek advice promptly, because policies and the law set time limits that can end a claim. Our FAQ on time limits is a starting point.
You can test your situation with our claim check, or contact us to talk it through. We cannot promise any outcome, but we can tell you whether your claim looks worth pursuing.