A TPD payout is set by the sum insured in your superannuation policy and is not a fixed amount, so it depends on your cover, your fund, and your circumstances.
There is no fixed amount for a total and permanent disability payout. The figure depends on the sum insured under your specific policy, and which fund or funds hold your cover.
Many people ask this question expecting a simple number, but TPD insurance inside superannuation does not work that way. Each fund sets its own level of default cover, and members can usually apply for extra voluntary cover on top. If you are new to this area, our short guide to what a TPD claim is is a good place to start.
What actually sets the amount
The core figure is the sum insured, which is the amount your policy promises to pay if a claim is accepted. For default cover arranged automatically through your employer contributions, this amount is often fixed regardless of your salary, though many funds scale it down as members get older. Voluntary cover, arranged separately, is chosen by the member and will be a fixed amount. This will often be unaffected by age and results in higher premiums.
Because the sum insured sits inside your superannuation account rather than being paid directly by an insurer to you, the payout is also affected by ordinary superannuation rules, including how the money can later be accessed and any tax treatment that applies when it is withdrawn. This is a separate question from the claim itself, and it is worth raising with a financial adviser once a claim is accepted.
Why the same condition can produce different outcomes for different people
Two people with a similar medical condition can end up with very different payout amounts, and this often surprises claimants. The reason is that the amount is a feature of the policy, not of the injury or illness itself. Someone with a larger sum insured, perhaps because they held voluntary cover or were part of a more generous default scheme, will receive more than someone with only minimal default cover, even where the medical evidence supporting each claim looks similar.
This is also why our note on claiming with multiple super funds matters. If you have held more than one job and accumulated more than one superannuation account, you may have more than one TPD policy, each with its own sum insured. Each claim is assessed separately, so identifying every fund you have ever held is often the single biggest factor in the total amount ultimately available to you.
What can reduce the amount you receive
A payout is not always the full sum insured. Funds and insurers can apply offsets or deductions in some circumstances, and understanding these before lodging a claim helps avoid surprises later.
| Factor | Effect on the amount |
|---|---|
| Sum insured under the policy | Sets the maximum amount the claim can pay |
| Age based scaling in some default policies | Cover may reduce as a member gets older |
| Outstanding fees or insurance premiums owing on the account | May be deducted from the balance before release |
| Other insurance offsets specified in the policy terms | Some policies reduce the payout if another benefit has already been paid for the same event |
| Tax on the superannuation withdrawal | Applies separately from the claim decision and depends on age and account type |
Because these terms vary a great deal between policies, the only reliable way to know what applies to you is to read your own policy document or have someone review it for you.
Why we cannot give you a number in advance
We are not able to promise any particular outcome or amount, and anyone who does so before reviewing your actual policy documents should be treated with caution. What we can do is identify every policy that may apply to your circumstances, obtain the relevant policy wording, and work out what the maximum available cover is likely to be before a claim is lodged. This groundwork often changes the strategy for a claim, particularly where more than one fund is involved.
It is also worth remembering that a TPD payout is separate from any other entitlement you may have, such as an income protection benefit or a workers compensation claim. Our earlier article on income protection compared with TPD explains how these two types of cover interact and why people can sometimes claim both at once.
Time limits still apply
Even though the amount of a payout depends on your policy, the right to claim it does not last indefinitely. Strict timeframes set by the regulator and by each policy govern how long you have to lodge a claim and, if a decision goes against you, how long you have to seek a review. Our guide to time limits for personal injury claims in Australia sets these out in more detail. Because working out which policies apply and gathering the right evidence takes time, it is worth seeking advice well before any deadline approaches, rather than waiting until the last moment.
What to do next
If you want to understand what your own cover is likely to be worth, the first step is identifying the superannuation funds you were a member of around the time of ceasing work due to injury or illness, and obtaining the policy documents for each one. This is exactly the kind of groundwork we do for clients before a claim is lodged, so that the strategy reflects the real value of the cover available rather than a guess. Our no win, no fee arrangement means there is no cost to finding this out. Start with the entitlement check, or send us an enquiry and we will talk you through what applies to your situation.