Claiming Superannuation TPD Payouts
If you cannot work again due to an injury or illness, you may be eligible to claim a total permanent disability (TPD) payout through your superannuation fund insurance. Your condition could be a mental illness, a chronic sickness or medical issue, or a physical injury.
The lump sum TPD payout is a valuable financial resource to support your lifestyle when you can’t earn an income. Many Aussies are unaware they:
- Have disability insurance with their superannuation provider
- How TPD payouts work
- The steps to ensure they maximise their TPD benefits.
To help you know how to get the most out of your entitlements, we created the Ultimate Guide to TPD Payouts, so you know how to have a successful claim and be certain of getting what you are owed when you can’t work anymore.
What is a Superannuation Insurance Payout?
First, let’s define what is a superannuation insurance payout. As an Australian worker, your employer must deposit funds into your superannuation account to help support your retirement lifestyle.
When the unexpected happens and you can no longer work in your regular occupation, you could claim against one or more of these insurance policies. If you have more than one super account, you might be eligible for multiple insurance payouts.
When you have a successful TPD claim, a lump sum payout will be deposited in your superannuation fund account, where you can either:
- Withdraw the whole amount.
- Withdraw some of your payout.
- Leave it in your super account until you reach retirement age.
How Much is the Average TPD Payout?
In Australia, the value of average TPD payouts ranges between $ 30,000 and $ 50,000, with most being above $ 200,000 and some fortunate people receiving up to $1.5 million. How much you get for a TPD payout can vary significantly and is determined by your superannuation insurance terms and conditions. Generally, the specifics of your case, such as the nature of your injuries, the nature of your pre-injury employment, and the length of time you have been unable to work, will also play a factor.
A total and permanent disability (TPD) claim payout can greatly help the financial situation of people and their families who are coping with a serious illness, injury or mental disorder.
Furthermore, due to job hopping, many Aussies have more than one superannuation fund. Because of this, they have more than one disability insurance policy, enabling them to have multiple TPD payouts, with each claim being assessed individually.
What Percent of TPD Claims Get a Payout?
What per cent of TPD claims get a payout? Fortunately, the Australian superannuation research firm SuperRatings has published data regarding the percentage of TPD insurance claims that have a successful payout. According to their research, when you lodge a properly prepared disability claim that correctly addresses the TPD definition contained in your policy terms, you can feel confident about receiving a lump sum payout.
Their statistics show that between 71 and 100 per cent of such claims are successful, which means up to 30% of people miss out. Also, a significant number did not receive the full value of their entitlements.
In regards to TPD claim rejection, Australian Securities and Investments Commission data puts the insurance industry average for denied permanent disability claims at 16 per cent.
You will be pleased to know that Aussie Injury Lawyers has a 99% TPD payout success rate. Our skilled superannuation insurance lawyers have helped thousands of everyday Australians access all their due benefits. Choose the law firm that specialises in just one area of law – insurance claims, when you want to win your TPD payout – Call 1300 873 252
Who is Eligible for a TPD Payout?
To be eligible for a TPD payout, you must have Total and Permanent Disability (TPD) Insurance as part of your Superannuation policy (or independently of your superannuation) on the day you last worked or became permanently and completely unable to do your job (or one for which you have training or experience).
You can find out if you are eligible by checking your superannuation policy statement or giving your super fund a call with your TPD policy questions, ensuring you get the answers in writing. Check if you had TPD cover when you ceased work, as your super provider could tell you otherwise when you call.
Please know that if Aussie Injury Lawyers is managing your case, it’s free for us to explore your insurance coverage and let you know your legal options. To know if you can make one or more TPD claims call us now on 1300 873 252
Can I Make Multiple Claims if I Have More Than One TPD Insurance Policy?
Yes, you can! If you have multiple insurance policies or have TPD insurance included as a part of your superannuation funds, you can claim multiple benefits for one physical injury, illness or psychological disorder as long as it meets the TPD definition of each individual TPD policy.
Multiple TPD claims are possible because each insurance arrangement operates independently from the other and may even cover only specific or certain benefits. So having multiple TPD insurance policies will involve additional claim forms and effort but could be worthwhile, particularly if you are concerned about relying on a single insurance policy. Making more than one claim increases the chance of winning at least one (or more than one), giving you funds for medical costs and other expenses.
What Are the Most Common TPD Payouts?
You can successfully claim a TPD insurance payout under a range of circumstances. The most common types are:
Work-Related TPD Claims
When your work causes you an injury, and you can no longer work in your regular occupation, you could make a TPD payout claim. Your harm could be related to a work accident, occupational mental illness or work-acquired disease (like mesothelioma).
Non-Work Related TPD Claims
When you suffer a physical or psychological personal injury independent of your job (and you can no longer work), you could have a successful TPD lump sum payout. For example, you had a car accident while on vacation, and your damage is permanent or long-term.
Serious Illness Claims
When you have been diagnosed with a serious or terminal illness like cancer, dementia, stroke or heart disease that stops you from working, you could win your TPD payout. Success will rely on how long you have been absent from work and whether or not there is a chance your condition will improve enough for you to return in the future.
Infectious Disease TPD Claims
Whether treatable or not, infectious diseases are a leading source of TPD claims. Diseases like HIV/AIDS, TB, and malaria, can make people too sick to work.
Can I Get a TPD Payout for a Mental Illness?
A mental health condition can be a total and permanent disability, similar to a physical injury. However, the process of accessing disability benefits for a psychological illness or psychiatric disorder can be more challenging. Proving your level of disability is made easier when you are receiving regular therapy from a mental health professional who is documenting your treatment.
Some commonly recognised disorders that qualify for mental illness TPD payouts include:
· Bipolar disorder
· Obsessive-compulsive disorder
What are the Requirements to Lodge a TPD Claim?
These are the common requirements for lodging a TPD claim with most insurance companies.
- You must have a persistent or long-term physical or mental disability that stops you from earning an income in your regular profession.
- You must have waited the required time specified by your policy or fund’s terms before filing a claim. The waiting period is the time that passes between when your impairment started and when you lodge your claim.
- The severity of your medical condition and its impact on your work capacity has to be supported by medical evidence like reports and assessments from your treating doctors or independent evaluation.
- You must meet the criteria for TPD as outlined in your policy terms and conditions.
Is it Difficult to Claim a TPD Payout?
A total and permanent disability payout is an insurance claim, so success relies on your capacity to meet (or exceed) the TPD definition in your policy terms.
Many Aussies find it too hard to satisfy their insurer’s requirements so they give up. The reality is they tried to claim their payout by simply filling in a few forms without knowing how to create a compelling case. For this reason, insurance companies enjoy people managing their cases (instead of using an experienced litigation lawyer) as they can minimise or deny claims more often.
Make the best financial decision for your future and rely on our 99% TPD Payout success rate to be certain of maximising your entitlements. Aussie Injury Lawyers is a 100% no win, no fee law firm, which means you only pay fees when you win and nothing if you lose. You carry no financial risk.
What to Do If Your TPD Claim is Denied
Don’t give up hope if you’ve lodged a TPD claim and it was denied. There are a number of reasons why a TPD claim might be refused, including inadequate medical evidence or not meeting the definition of permanent disability. However, just because you had an initial rejection doesn’t mean it’s the end of the road.
There are options for appealing, such as providing additional or more comprehensive medical evidence or seeking legal advice to understand your rights and options better. While a successful TPD claim may be difficult to achieve, with the right approach and support, there’s still a chance that you can receive the full insurance benefit and the payout you deserve.
What is the Timeframe for a TPD Payout?
Most people with a valid claim want to know the timeframe for a TPD Payout. In most cases, you will receive a lump sum payment within 6 to 12 months of lodgement. Of course, some cases take longer, particularly if it is a large payout or complex claim.
Typically, the insurer will complete their assessment within 6 months; however, there is another review by your superannuation trustee. This stage is usually completed within 1 to 2 months.
The primary cause of late claim payouts is incomplete or inaccurate assessments or submissions. Should you lodge a dodgy application, you will experience a long process of multiple information requests and waiting for a response to each one. Insurance companies rely on applicants abandoning the process as it becomes too challenging.
What Can I Do to Fastrack My Claim?
Lodge an Accurate Claim – Providing sufficient and compelling evidence to support a TPD claim can fast-track the process, as incomplete submissions will result in the insurer requesting additional information (multiple times), prolonging the process.
Write a persuasive letter outlining why you should get your Payout – failing to do this often leads to claim rejection.
Chase the insurance company to confirm they have all the required information – a hands-on approach will escalate your claim payout.
Aussie Injury Lawyers‘ team of TPD Payout specialists have a comprehensive understanding of the claims process, including the factors that make insurers delay payment. Be certain of accessing your payout when you need it most by contacting us now for free TPD claim advice – Call 1300 873 252
How Do I Get My TPD Payout?
Once approved, your lump sum payout is deposited into your superannuation account, giving you the following options:
- Withdraw the funds
- Transfer part of your payout into another account.
- Keep the funds in your super account for retirement.
When you receive your payment, it is recommended that you seek expert financial advice. Your choices will impact how much tax you pay, with some options being tax-free.
Next, our ultimate TPD payout guide reviews the tax implications for lump sum payouts.
What is the Tax on My TPD Payout?
Your lump sum TPD payout is not included in your taxable income unless you withdraw all or part of these funds from your superannuation account. When you do this, you will owe “superannuation lump sum withdrawal tax”. Here are the factors you must consider:
- Taxpayers aged 60 or over are exempt from tax on TPD payouts.
- If you leave your TPD payout in your super account until retirement age, it is tax-free.
- The TPD tax calculation for people under the age of 60 is based on their age, eligible service date, and the date they joined a superannuation fund.
- When below your preservation age, some of your withdrawal figure will be tax-free, and the balance will be taxed at 22%.
- People who have met their preservation age but are below 60 years old are eligible to withdraw a maximum of $225,000 free from taxes.
- When withdrawing over $225,000, a portion of the withdrawal amount is tax-free and the remaining taxable portion is subject to a 22% tax rate.
The other frequent question about TPD payments is, how will it change my Centrelink payments? We examine that next in our Guide to TPD payouts.
How does a TPD Payout impact Centrelink
It is common for people receiving a TPD payout to be concerned about Centrelink’s impact.
So, it’s reassuring to know that when your TPD payout is deposited into your superannuation account, it does not impact your Centrelink payments (when you leave it there). Centrelink does not include your super balance as part of its means test until you qualify for the age pension, which is around 65 to 67 years old, and receiving a TPD payout does not affect other benefits, including child support payments.
But, when you remove money from your TPD payout or superannuation account, this will likely change your Centrelink payments. For this reason, we recommend seeking qualified financial advice before making any decision about moving funds.
Is it Possible to Return to Work Following a TPD payout?
In some circumstances, you can return to work following a TPD payout. Whether or not you can work again relies on your insurance policy terms and conditions and other factors.
Most TPD insurance policies fall into one of these two categories:
- Can’t return to work in your occupation
- Can’t return to work in any occupation
The first category means you are unfit for your regular job or any other occupation aligned with your existing training and experience. In this circumstance, after receiving a TPD payout, you could train to work in a different industry and return to work.
For example, you used to work as a bricklayer doing hard manual labour, and your medical condition prevents you from doing this job or any other manual labouring work. After a TPD payout, you could study at a college or university and then work in a profession where you sit behind a desk to do your job.
The second category is more challenging. When your policy says you can’t work in any occupation, you cannot return to work in your usual job or any other occupation. The exception is when a new treatment or therapy helps you recover from your ailment to the point where you can work again. In this situation, you could potentially return to work and retain your TPD payout.
Please ensure you receive expert legal advice before making any decision regarding going back to work.
How Our TPD Payout Lawyers Can Help
A successful TPD payout provides financial security and stability for you and your loved ones when you have a permanent or long-lasting disability. These payments are often tax-free, and in some cases, you can return to work following a TPD payout. There are certain mental illnesses that qualify for a TPD payout as well.
Our experienced TPD Lawyers will evaluate your case for free. We provide expert legal advice, guiding you through the claims process to a winning outcome. As part of our comprehensive claim review, we will:
- Locate your valid TPD insurance policies.
- Closely examine the fine print.
- Understand the applicable TPD definition.
- Let you know how many claims you might have.
- The value of your claim.
- How likely you are to succeed.
- Your recommended steps to securing your lump sum TPD payout.
You will have peace of mind knowing Aussie Injury Lawyers 99% of disability insurance claims. Rely on our knowledge and expertise to get the maximum from your TPD cover. There are no upfront costs, and our “100% no win, no fee” policy ensures you pay nothing if you don’t win.