Your Essential Guide to the Super TPD Claim Process for the Best Payout

A successful super TPD claim helps relieve the financial burden of an illness, injury or mental illness that stops you from working. Learn how it works.
A man lodging a TPD claim on a desktop computer

Successful superannuation TPD claims help relieve the financial burden that accompanies an unexpected illness, injury or mental illness that stops you from working. Are you considering making a TPD claim? Our legal guide explains Total and Permanent Disability claims and how to make the most of TPD insurance claims.

Find out about typical obstacles to success and how a qualified TPD lawyer can help you secure your deserved insurance benefits.

Major Considerations

  • You must understand Total and Permanent Disability (TPD) insurance because it offers financial security when you can’t earn an income due to a range of disabilities caused by illness or injury.
  • To make a successful superannuation TPD claim, you must first satisfy your insurance policy definitions by supplying compelling evidence of your condition, like medical evidence and employment records.
  • An experienced TPD lawyer increases your chance of winning a claim, maximises your TPD compensation, and avoids common mistakes.
  • You can make multiple TPD claims when you have disability insurance cover with multiple super funds.
Insurance policy terms and condition document lying on a desk with a magnifying glass on top

About TPD Claims and Insurance Coverage

TPD insurance acts like a safety net when the unexpected happens, offering financial security. When illness or injury limits your ability to work, successful TPD claims provide income. There are several benefits to TPD insurance, including:

  • Financial protection
  • Peace of mind
  • Flexibility
  • Potential tax benefits

TPD insurance covers a broad range of scenarios, from physical disabilities resulting from accidents, injury or illnesses to diagnosed mental illnesses.

What is my TPD claim worth?

Defining TPD Insurance

TPD insurance is more than a mere financial buffer; it is an essential lifeline in times of need. The primary role of TPD cover is to alleviate financial burdens when living with a disability by covering medical and rehabilitation expenses. When approved, you receive a one-time insurance benefit payment.

Note: You could also receive funds from a Centrelink Disability Support Pension, which is a government-funded financial assistance program for people with disabilities.

The Scope of TPD Benefits

TPD insurance cover isn’t just for physical disabilities; it also offers coverage for a range of illnesses, including:

  • Cancer and other serious diseases
  • PTSD
  • Severe anxiety and depression
  • Heart attacks and strokes
  • Sight or hearing loss

In fact, any injury or illness that compromises your ability to earn an income can qualify for a permanent disability claim. However, insurance providers have a different TPD definition, which will affect coverage for specific occupations or situations.

Insurance companies evaluate your eligibility for TPD benefits using certain standards. Therefore, understanding your TPD policies’ terms and conditions is essential for filing successful claims.

A tablet showing medical records and documents for a TPD claim

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Can I Make a TPD Insurance Claim?

Eligibility to make a TPD claim relies heavily on the terms and conditions of your insurance policy, particularly the TPD definition. First, you must have stopped working due to an illness, injury, or diagnosed psychological disorder. Next, you need both employment documentation and solid medical evidence from qualified medical professionals to support your condition.

Please remember that each case is unique and that different people may experience distinct impacts from the same permanent disability. For example, if you have a problem with a permanent back condition, the impact may be greater if you work as a bricklayer than if you have an office job.

Our TPD lawyers will conduct a free investigation to determine your eligibility for a TPD benefit and advise you of the following:

  1. If you have a valid case
  2. If you can make multiple TPD claims
  3. Your potential lump sum payout value
  4. The evidence required for a successful claim
  5. Your next steps in the TPD claims process

Get started now by Calling 1800 700 125 or starting a free online assessment.

Comprehending Your Policy Terms

The terms and conditions of TPD insurance policies vary considerably between insurance providers. Specific terms within TPD policies that significantly influence the claim process include:

  • The definition of ‘Total and Permanent Disability’ (TPD)
  • The specifics of the superannuation insurance policy
  • Criteria for the lump sum payment.

The Significance of Medical Evidence

A successful TPD claim relies on solid medical evidence. The necessary documentation typically includes reports from accredited medical specialists, doctors or psychologists and copies of medical and employment reports. This documentation needs to support the ways in which your total and permanent disability affects your ability to work.

Strong medical evidence comprises:

  • Comprehensive and clear evidence of the injuries or condition, such as detailed medical reports, X-rays, workers’ compensation records, and other relevant medical records
  • Specialist reports
  • Any additional documentation that supports the claim
An open laptop displaying a TPD claim form

What is my TPD claim worth?

Step-by-Step Guide to the TPD Claim Process

Although the TPD claims process can initially appear challenging, a well-prepared case will help ensure successful claims. The steps to make a TPD claim include:

  1. Seek legal advice from TPD lawyers.
  2. Preparing your documentation, like claim form, medical records and work history
  3. Lodging your super TPD claim with the superannuation provider and insurer
  4. Following up with the insurance company for an outcome
  5. Disputing a rejected claim (if necessary)
  6. Receiving a lump-sum payment

Seek Legal Advice from a TPD Lawyer

Unsurprisingly, disability insurance companies do not like to part with their funds. Consequently, they employ teams of assessors whose job it is to minimise their liability. Thankfully, the permanent disability legal team at Splatt Lawyers regularly deals with all the major Australian insurers and understands what it takes to deliver a winning outcome. Our 99% win rate for successful insurance claims serves as your guarantee.

Preparing Your Documentation

Once your lawyer has confirmed you have a viable TPD insurance claim, the next step is to prepare accurate and complete documentation. These documents must address your policy’s definition of total and permanent disability and prove how this condition disrupts your ability to work.

The required documents typically include:

  • An accurately completed claim form
  • Medical assessments and doctor’s reports
  • Information regarding your employment history, such as payslips, contracts of employment, and detailed position descriptions

Lodging the Claim

Next, you must lodge your claim with both the super fund and the insurance company. This submission must also contain a letter explaining why you should have an approved claim. Failing to attach this letter is a common reason for denied claims.

Follow up with the Insurance Company

Once you have filed your TPD claim, be sure to follow up with the super fund and insurer. Confirm they have all the information they need to make a decision. Doing this will help escalate the approval process and avoid unnecessary delays.

Dispute a Rejected Claim

According to Australian Prudential Regulation Authority (APRA) data, about 20% of TPD claims are rejected annually in Australia. Don’t panic if this happens to you. There are options to appeal denied claims, and our litigation lawyers know how to reverse a negative outcome. Contact us immediately if this is your situation.

Receive a Lump Sum Payout

Approved TPD insurance claims will receive a once-off lump sum payment. Generally, these funds are transferred to a superannuation account, where they can be withdrawn. What you do next will determine how these funds are treated for taxation purposes.

Avoiding Common Mistakes

The TPD claims process can take anywhere from 3 to 12 months, depending on the case’s complexity and specifics or the payout’s size. To ensure a smooth process, avoid common mistakes, such as:

  • Misunderstanding the definition of ‘total and permanent disability’
  • Following incorrect guidance
  • Confusing crucial claim-related dates
  • Providing inadequate documentation.
  • Not attaching a support letter to the claim submission.
  • Waiting too long to file a claim
An man with an injured arm consuting with a TPD lawyer

Strategies to Make the Most of Your TPD Payout

By following these steps, you can maximise your TPD payout and successfully claim TPD:

  • Seeking informed legal advice from experienced TPD lawyers
  • Using their specialised knowledge and negotiating insurance claims
  • Get expert help with collating essential evidence.
  • Ensuring thorough claim preparation and presentation
  • Negotiating with the insurance company to secure the highest possible payout.

Can I Lodge Multiple TPD Claims?

In Australia, people who have changed occupations or job roles during their careers can have accounts with multiple super funds, and hence, TPD insurance cover with several insurers. These fortunate people could make multiple TPD claims for the same illness or injury.

In this situation, the process to claim TPD is the same. However, you must claim separately with each super fund and insurance provider. Given that every policy will have different terms, conditions, and requirements for satisfying the TPD definition, the requirements for each will likely vary. However, once approved, you will likely receive a six-figure settlement.

Find out now if you qualify by calling 1800 700 125 for your free claim assessment.

An accountant calculating TPD payout tax

Tax Implications of TPD Payouts

Successfully claiming a TPD payout can considerably impact your financial situation. Usually, after approval, a lump-sum payment is made into a superannuation fund account. What you do next will determine how much tax you will pay on a typical TPD payout.

The good news is that you might pay little to no tax if you keep the money in your super fund account until you retire. However, once you withdraw, these funds are treated as taxable income.

In Australia, the TPD tax rate is usually 22%. However, you will likely have a tax-free component because your super fund will calculate a tax-free uplift. This calculation considers your date of birth, eligible service date, and the date you last worked.

Sadly, superannuation funds do not always get this right, so your best strategy is to seek reliable financial advice before withdrawing money from a TPD claim settlement.

Accessing Your TPD Lump Sum

Accessing your TPD lump sum involves the following steps:

  1. Make a TPD claim after ceasing work due to an illness or injury.
  2. Upon approval of the claim, you will receive a once-off payment.
  3. There are usually no legal constraints on accessing your TPD benefit.

However, please know that withdrawing a portion or the entirety of the sum may have tax implications.

The potential tax consequences of an immediate withdrawal of your TPD payout can include taxes of up to 22% on the benefit, although there is usually a tax-free component. Hence, we recommend you get advice from your superannuation fund or a qualified tax professional.

On the other hand, leaving your TPD payout invested until retirement will result in varying tax treatments based on age, with people over 60 being eligible for tax exemption.

About Centrelink and Other Government Benefits

Receiving a TPD payment can potentially impact other Centrelink benefits, such as the Age Pension or Newstart Allowance, as these benefits are means-tested. Generally speaking, holding the funds within your superannuation account won’t affect your Centrelink benefits.

How you use the money will determine how Centrelink payments change. Consequently, you should speak with an accountant, financial advisor or Centrelink staff to fully understand your options.

How to Handle Rejected TPD Claims

Although dealing with a denied TPD claim can be stressful and discouraging, it’s important to stay positive. Thankfully, all Australian insurance companies have an internal dispute resolution (IDR process), and our TPD lawyers regularly reverse rejected claims. Of course, your best strategy is to have a well-documented case in the first instance to maximise the chance of a successful outcome.

However, in the worst-case scenario, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA).

Legal Advice for Winning Superannuation TPD Claims

Working with knowledgeable TPD lawyers is your best option if you want to be sure of maximising your TPD entitlements. They regularly negotiate with all the leading disability insurance companies and understand the requirements for a winning outcome. Rely on their knowledge of claim forms, medical documentation and the TPD definition as your guarantee of success.

Choosing Splatt Lawyers’ insurance claim legal services means access to our 100% no-win, no-fee funding. You pay legal fees and costs when you win and zero if you lose. Unlike some other insurance law firms, you carry no financial risk in your case. And, we consistently win 99% of TPD insurance claims.

It’s free to find out if you can make a TPD claim. Call 1800 700 125 or use our free online claim check.

Total and Permanent Disability Claim FAQs

What are the eligibility criteria for a TPD claim?

To be eligible for a TPD claim, you must have an injury, illness or mental illness that makes you unable to do your regular job. You must also have been off work for at least three consecutive months due to the injury or illness.

What is the average TPD payout in Australia?

The average TPD payout in Australia is approximately $150,000, but it can vary significantly, ranging from $60,000 to $2,000,000. It’s important to note that you may be eligible for multiple claims if you contributed to more than one superannuation fund during your work life.

Is TPD hard to claim?

Claiming TPD benefits can be challenging due to the complexity and frequency of rejected claims. To increase the likelihood of a successful TPD claim, seeking expert advice and support is essential.

What percentage of TPD claims are successful?

Around 82% of TPD claims are approved, providing important financial support to many Australians who are permanently disabled.

Is a TPD payout considered taxable income?

Generally, a TPD payout is not considered taxable if the funds remain in your superannuation account. Whether you pay tax or not, and the rate you will pay depends on your current age, retirement status and the amount you withdraw in a lump sum. Please consult with a financial advisor to learn how to minimise your tax liability.

Can I return to work after a TPD payout?

You may be able to return to work after receiving a TPD payment, depending on the following:

  • The nature of severity of your injury or illness
  • The terms and conditions of your TPD insurance
  • Whether your TPD policy has any occupation clause, or own occupation clause.

Note: If you work again, it will not be in your existing occupation. You would likely need to retrain to work in another industry that suits your new physical or psychological condition.

How long is a Total and Permanent Disability claim?

In Australia, most total and permanent disability claims are resolved within three to six months. However, for more complicated cases or those with higher payouts, it may take up to 12 months.

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