TPD and income protection claims

A total and permanent disablement (TPD) claim is made through your superannuation fund or a retail insurance policy. Many Australians do not realise they have this cover, and are often surprised by how much they were insured for at the time they stopped working because of injury or illness. In simple terms, a TPD claim involves demonstrating to the insurer that, because of an injury or illness, you are unlikely ever to work again in an occupation suited to your training, education or experience.

Our lawyers take care of the preparation for you, so you do not need to worry about where to start. We request the relevant documents from government bodies such as the ATO, Medicare and Centrelink, and we contact your treating doctors directly to gather medical records and complete any required medical statements. Preparing a claim usually takes around four to six weeks, depending on how quickly your doctor and employer respond. We keep you updated weekly throughout this time, so you are never left wondering how your claim is progressing.

Once your claim is lodged with the insurer, a case manager carries out an initial assessment of everything provided. If the insurer asks for more information or documents, we get it to them as quickly as possible. The Life Insurance Code of Practice recommends a timeframe of six months for a decision on a TPD claim, however this can be extended under some circumstances, and our lawyers chase weekly updates to hold the insurer accountable and keep you informed. Because of these regular follow ups, many of our clients see an outcome within three to four months of lodgement.

At times an insurer may be minded to decline your claim rather than admit it. In these instances a procedural fairness notice is issued, giving you a genuine opportunity to respond to the issues identified. If further information is needed to support your claim, we obtain it on your behalf. Our lawyers are experienced in responding to these notices, and have often achieved a positive outcome before an adverse finding is made. That saves you both time and money compared with fighting a decline.

Most declines come down to one of a few things: the medical evidence describes a diagnosis, but not what it actually prevents you from doing at work; the insurer argues you could retrain for a different role; your cover is said to have lapsed before you stopped working; or the claim form, medical history and employer records do not match up. None of these is unusual, and each can be addressed. The first step is to read the decline letter against the exact wording of your policy's disability definition, because that definition, not a general idea of "disability", is what your claim is actually assessed against.

Every fund runs an internal dispute resolution process, and that is the first formal step after a decline. A good submission engages with the trustee's specific reasoning rather than simply restating the original claim. In practice, that usually means obtaining a supplementary report from your treating doctor or specialist that speaks directly to your capacity for work suited to your training, education or experience, and putting your employment history in order. There is usually no strict deadline for lodging the internal complaint itself, but if the matter later needs to be litigated, strict time limits do apply. So it is still worth starting the work as soon as the decline letter arrives rather than assuming there is no urgency at all.

Where an internal review fails, the next step may be a complaint to the Australian Financial Complaints Authority (AFCA). This process is free for the claimant, and AFCA can substitute its own decision for the trustee's, including directing that a benefit be paid.

It is also slow, and the outcome depends heavily on the file that was built earlier. We make sure all the evidence is gathered and in order before we lodge an AFCA complaint, rather than sending it in bits and pieces afterwards. We usually go down the AFCA path for smaller claims, and consider court action for larger ones where it makes more financial sense.

Where AFCA does not resolve the matter, or where the amount and issues involved justify it, we bring proceedings against the trustee or insurer. Litigation is used when the situation calls for it, and only after a candid assessment of the medical evidence and the policy wording. We brief a barrister, who will also provide their view on prospects and often act on a speculative basis. Before we proceed with the litigation process, we tell you plainly whether we think the claim can be won, and what it will take.

Income protection pays a monthly benefit of your insured benefit amount or a percentage of your pre disability earnings, whichever is lesser, while illness or injury prevents you from working. It can sit inside superannuation or in a policy you hold directly, and many people hold both income protection and TPD cover. The two are assessed differently: TPD generally requires a degree of permanency to the incapacity preventing you from working within your education, training and experience, while income protection does not. An income protection claim can be accepted, paid, and later cease as your condition changes, or if you return to work.

Where an insurer stops or reduces payments, declines the claim, or applies an offset you did not expect, the same review pathway applies: the internal complaints process first, then AFCA. We act on both TPD and income protection claims together where they arise from the same illness or injury, so the evidence gathered for one supports the other.

Superannuation usually carries death cover alongside TPD, and many policies also allow a benefit to be paid early where a person is certified as terminally ill. A terminal illness benefit is paid to the member during their lifetime, so it turns on the medical certification the policy requires rather than on capacity for work, which makes it a different question from a TPD claim even where the same illness is involved.

A death benefit is different again. The insured amount is paid to the fund, and the trustee then decides who receives it, which is not always the person named on the form. That decision can be objected to, and the objection is dealt with by the trustee before any complaint to AFCA. We act for dependants and for legal personal representatives on both the insurance claim and the question of who the benefit should go to.

These claims sit in the same superannuation and insurance framework as the rest of this page, and the review pathway is the same: the trustee first, then AFCA, then court where it is not resolved.

If you have held more than one job, you may hold more than one super fund, and more than one insurance policy as a result. A decline on one claim does not necessarily affect the others, and each is assessed on its own policy terms. See claiming with multiple super funds.