You can usually claim total and permanent disability cover through your superannuation while you are receiving workers compensation, because the two claims are separate and decided under different rules.
Yes, in most cases you can claim TPD while you are on workers compensation. The two claims run under different rules, are decided by different organisations, and one does not automatically cancel the other. What needs care is how they affect each other, particularly the medical evidence and any settlement of the workers compensation claim.
Two separate claims, two separate decision makers
Workers compensation is a statutory scheme. It is run under state, territory or Commonwealth legislation and is handled by a workers compensation insurer on behalf of your employer. It exists to pay for treatment, weekly payments and, in some cases, a lump sum for permanent impairment.
A TPD claim is different. It is a claim under a life insurance policy held through your superannuation fund, and it is decided under the policy definition of total and permanent disability. The decision maker is the fund’s insurer, with the trustee of the fund involved in the process. Our FAQ on what a TPD claim is sets out the basics, and our article on who actually pays your TPD claim explains the roles of the trustee and the insurer.
Because the two schemes are separate, being accepted for workers compensation does not mean you meet the TPD definition, and being declined for one does not decide the other.
Why the claims can run at the same time
A TPD policy does not usually ask how your injury happened. It asks whether your condition, and your education, training and experience, mean you are unlikely to ever work again in the way the policy requires. That test looks at the effect of the condition, not at whether someone else was responsible for it.
For that reason a work injury can support both claims. You may be receiving weekly payments while the question of whether you can ever return to work is still open. A TPD claim often becomes relevant when treatment has run its course and your doctors say the restrictions are likely to be permanent.
How the two interact
The claims are separate, but they are not independent of each other. The main points of contact are set out below.
| Area | What to watch |
|---|---|
| Medical evidence | The same treating doctors and reports often feed both claims. What is said in one can be read in the other, so the descriptions of your capacity should be accurate and consistent. |
| Return to work plans | A workers compensation insurer may ask you to attempt suitable duties. Evidence from those attempts can be relevant to whether you are unlikely ever to work again. |
| Weekly payments | These are paid under the workers compensation scheme. A TPD benefit is a separate insured benefit, although some schemes and some policies take other payments into account. |
| Settlement or lump sum | Finalising a workers compensation claim can affect your rights and the evidence available later. It should not be done without considering the TPD claim first. |
| Policy terms | Some policies contain offset or definition wording that refers to other benefits. The terms of your own policy matter. |
Whether an offset applies depends on the wording of the policy and the scheme involved, so it should be checked against the actual documents rather than assumed.
Timing and settlement decisions
Many people focus on the workers compensation claim first because it is already under way. The risk is that a decision made there can shape the TPD claim later.
For example, if a workers compensation claim is finalised on the basis that you are fit for some type of work, that statement may be used when the insurer considers the TPD definition. A settlement may also close off benefits you would otherwise have been able to rely on. Equally, a TPD claim that is lodged late may run into policy conditions about when a claim must be made, and some policies require notice within a certain time frame after cover ends or after you stop work.
Strict timeframes set by the regulator or by the policy can apply to both claims. It is worth getting advice promptly rather than waiting until the workers compensation claim is finished. Our FAQ on time limits for personal injury claims in Australia gives a general overview.
Which fund and which policy
If you have worked for several employers, you may have cover in more than one superannuation account. Each policy is assessed on its own terms. Our FAQ on multiple super funds and TPD explains why it is worth checking every account, including old ones.
You should also check whether your cover was still in place on the date you stopped work. Cover can lapse or reduce, for example when an account is inactive, and a long period on workers compensation can be when that happens without anyone noticing.
Money questions that follow
If a TPD claim is accepted, questions about tax, Centrelink and withdrawing money from superannuation can follow. They arise because the benefit is paid into your superannuation account, and because other payments you receive may be counted in different ways by different agencies.
Your own position on those questions depends on your circumstances. The firm gives legal advice on the claim, not tax or financial advice, so those questions belong with your accountant or financial adviser.
What to do next
Start by collecting the documents you already have: the workers compensation claim acceptance, any medical reports, your work history and the statements for each superannuation account. Check the TPD definition in your policy, and note the date you stopped work.
Do not finalise or settle the workers compensation claim without first considering whether a TPD claim is open to you. Our claim check is a simple starting point, and you can contact us to discuss your situation. Prompt advice matters, because strict timeframes can apply and the decisions you make in one claim can affect the other.
Sources
- Australian Securities and Investments Commission, Report 633, Holes in the safety net: a review of TPD insurance claims, October 2019.
- Australian Financial Complaints Authority, superannuation complaints.