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What is TPD? Guide to Total and Permanent Disability Claims

A TPD claim pays a lump sum insurance benefit to people who can't work because of a permanent disability caused by illness or injury. Learn how TPD cover works.
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A man questioning: What is TPD?
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Many Australians question: What is TPD when they can’t work because of a severe injury, illness, or mental illness? They often find that making a total and permanent disability (TPD) claim provides essential financial assistance at a crucial time. However, to successfully claim TPD benefits, you must understand how it works and the steps to a winning payout.

Fortunately, our comprehensive guide outlines everything you need to know about TPD claims, including:

  • The TPD definition and eligibility requirements
  • How to manage the claim process
  • Avoid common mistakes
  • How to improve your chance of securing insurance benefits
A man in a wheelchair looking at a TPD insurance claim form on his mobile phone

What is a TPD Claim?

A TPD claim (or a total and permanent disability claim) pays an insurance benefit that provides a lump sum payment to people who suffer from an injury or illness that leaves them permanently disabled and unable to work. Eligibility to make a TPD insurance claim depends on the insurance policy terms and the provisions of the super insurance scheme. Consequently, when seeking a TPD payout, you must know the terms of your insurance coverage, particularly the insurer’s TPD definition and any exclusion clauses. Additionally, you should be aware of these factors:

  1. It doesn’t matter how you acquired your illness, injury or mental illness.
  2. Your medical condition does not need to be work related.
  3. You don’t need to prove who is to blame (as for a personal injury compensation claim)
  4. The level of impairment required for a TPD claim differs from that needed for other forms of compensation. Including worker’s compensation or motor vehicle accident compensation.
  5. You do not automatically qualify for a TPD lump sum payment if you already had a workers’ compensation payout.
  6. Knowing the degree of impairment required by a permanent disability TPD insurance or superannuation policy is key to increasing the chance of a successful TPD claim.

Any Occupation Versus Own Occupation

There are two main types of total and permanent disability insurance policies: “any occupation” and “own occupation”.

“Any occupation” policies provide coverage for any occupation that is suitable for you, considering your education, training, and experience. Meanwhile, “own occupation” policies cover the specific occupation you were engaged in when you became ill or injured.

You must understand the difference between these two types of TPD insurance cover, as it will impact your claim eligibility and how much compensation you may receive.

Furthermore, some TPD policies may include a “retraining clause.” If your policy has this clause, you must prove you can’t return to work, even after reasonable retraining.

Given the complexity of meeting the insurer’s conditions (particularly the TPD definition), your best strategy for a successful TPD claim is to work with a lawyer specialising in insurance claims.

TPD Claims Through Superannuation Funds

In Australia, TPD insurance is often included as an additional benefit when you join a superannuation fund. Super funds usually offer a variety of life and disability insurance plans, such as death benefits and income protection. These superannuation policies provide a safety net when someone can’t work due to a permanent disability.

Because Australian workers sometimes change job roles every few years, they sometimes have multiple superannuation providers and more than one TPD policy. In this case, they could be eligible to make multiple TPD claims.

Can I Make a TPD Claim?

To know if you can make a TPD claim, you should:

  1. Contact your insurer or superannuation fund
  2. Review your latest superannuation or insurance statement to confirm if you were covered at your last date of employment

Alternatively, you can ask a TPD claim lawyer, like Aussie Injury Lawyers, who will contact your insurance company and investigate your case for free. They let you know how to satisfy your disability definition and the amount of TPD benefit you can expect for an approved claim.

How much is my TPD payout worth? >

An elderley woman viewing a document with a magnifying glass to determine if she has a valid TPD claim

How to Determine If You Have a Valid TPD Insurance Claim

When assessing eligibility to make a TPD claim, you must consider factors like:

  • the severity of your illness, injury or psychological illnesses
  • your educational background
  • age
  • work history

These factors will be used to assess your work capacity, which refers to your ability to work or engage in employment. In some cases, a minimum of 12 months of working history will be required to demonstrate eligibility.

Each TPD insurance policy will likely have unique eligibility criteria. Thus, you will require convincing proof that satisfies the particular needs of your insurance company. The best person to handle this situation is a TPD lawyer who can offer experienced legal advice and assistance with the complex claim process.

Common Illnesses and Injuries That Qualify for TPD Claims

Various physical, mental, and chronic illnesses may qualify for TPD claims in Australia, depending on the policy criteria. Some common examples include:

However, any medical condition could render you permanently unable to work, as long as it satisfies your policy terms. Before lodging a claim, the insurance company will expect you to have reached ‘maximum medical improvement’, meaning your illness condition is stable.

Keep in mind that eligibility for a TPD claim relies on the specific terms of your policy and your personal circumstances. Hence, consulting with a TPD lawyer or insurance provider is advisable to understand better your policy and what is required for a successful claim.

The TPD Claim Process: Step-by-Step Guide

Although the TPD claim process may initially seem difficult, most claimants find that understanding the steps increases the likelihood of successful TPD claims. So, here are the steps of the TPD claims process:

  1. Contact an experienced TPD insurance claim lawyer to learn about your legal rights and the best strategy to win your case.
  2. Gather all the necessary documents, like medical evidence of your condition, proof of income, and other relevant documents required by your policy terms.
  3. Contact your superannuation fund and make a TPD claim by completing the relevant claim forms. Be sure to attach a supporting letter explaining why you should have an approved claim.
  4. Next, there are three possible outcomes. The claim was approved, the insurance company requested more information, or you have a denied claim. Your lawyer will assist you with the next steps in all three circumstances.
  5. You receive a lump-sum payout, which is deposited into your super fund account
Close-up image of a person completing a TPD claim form

What is the Time Frame for a Typical TPD Payout?

The processing time for TPD claims typically ranges from 6 to 12 months, depending on the case complexity and how much the insurer challenges your case. Your insurance arrangements will also determine the timing of a TPD payout, as insurance companies often take more time to approve higher TPD payment amounts.

Multiple TPD Policies and Claims

In Australia, some people have a TPD policy with multiple super funds. Hence, they can make multiple TPD insurance claims for the same total and permanent disability. In this case, you must make a separate claim through each superannuation provider.

There are generally no restrictions when claiming multiple TPD benefits from different policies, but you must satisfy the unique terms of each TPD insurance cover. However, before filing multiple TPD claims, seeking expert advice from a TPD lawyer is recommended to secure your entitlements.

Reasons for TPD Claim Rejection and How to Prevent It

TPD claims might be declined for several reasons, but most often because:

  1. The medical records do not sufficiently demonstrate the extent of disability or its impact on work capacity.
  2. Claimants forget to attach a letter supporting their case, another common cause of case denial.
  3. Claiming TPD benefits many years after the illness or injury occurred often makes insurers question your claim’s validity.

To reduce the likelihood of rejection, you must submit your claim on time, complete it accurately, and include strong supporting documentation.

However, despair is unnecessary if you have a denied claim, as a superannuation insurance claim lawyer will provide expert guidance on the best strategy to reverse the insurer’s decision.

A photo of a TPD payout calculator on a desk showing the result of a TPD payment calculation

TPD Payout Amounts and Taxation

The amount of an Australian TPD payout typically ranges from $30,000 to $500,000, with many payments exceeding $200,000. It’s important to note that while the TPD payout itself is not considered taxable income, withdrawing a part of it from a super fund as a lump sum often means paying “superannuation lump sum withdrawal tax”. However, leaving the money in your super account until retirement age is generally tax-free.

Most people only get one TPD payout in their lifetime, so you should know the possible tax consequences of a TPD payment to make the most of yours. In this situation, a financial advisor is your best resource for understanding how to manage your funds.

Impact of TPD Payout on Centrelink Payments and Returning to Work

Receiving a TPD payout may raise concerns regarding its impact on Centrelink payments or the possibility of returning to work. The good news is that, generally, TPD payouts do not affect Centrelink benefits, as the funds are assessed based on their usage rather than a withdrawal through a superannuation provider.

Can I Work Again After a TPD Payout?

It’s possible to return to work after receiving a TPD payment for a permanent disability. But generally, not to your previous occupation. Whether you can work again depends on the definition of TPD applied to your claim and any restrictions within your TPD policy terms and conditions.

Due to these complexities, we strongly recommend seeking legal advice before returning to work after receiving a TPD payout.

How TPD Lawyers Help With Claim Process

Hiring an expert TPD lawyer to help you make a TPD claim will provide substantial benefits, such as:

  • Expert advice when negotiating with insurers
  • Help with medical reports, evidence and all the documentation
  • Detailed, professional claim preparation
  • Removing barriers to a winning outcome
  • Navigating the complex TPD claims process
  • Representation in court proceedings (if required)

An experienced insurance claim lawyer will give you the best opportunity to receive a TPD lump sum payment.

Furthermore, Aussie Injury Lawyers provide legal services on a 100% no win, no fee basis, which means you pay legal fees when you win and nothing if you lose. Retaining a TPD lawyer can be a wise financial decision that will guarantee you get your due compensation. Get immediate support now by Calling 1300 873 252

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Total Permanent Disability Claim FAQs

What qualifies for TPD?

Chronic illnesses, such as strokes, multiple sclerosis, heart conditions, cancer, lost hearing or vision, mental health issues, paralysis, lost limbs and autoimmune diseases, can all qualify for TPD. Psychological injuries like depression and PTSD can also be eligible with sufficient documentation.

What is an example of a TPD claim?

A TPD claim is an insurance claim for total and permanent disability, which covers any illness, injury or mental illness that prevents a person from working and earning an income. In Australia, successful TPD claims often involve medical conditions like cancer, stroke, loss of limb, anxiety, depression, brain injuries, and back injuries.

How hard is it to claim TPD?

It is often challenging to have a successful TPD claim because insurance companies will look for any reason to reduce or deny your entitlements. Typically, they will seek to reduce their liability by denying or reducing your TPD benefit.

Thankfully, experienced TPD lawyers regularly deal with all the major Australian life insurers, and they know their tactics. That’s why seeking free legal advice is your best choice when making a TPD claim.

How much is the average payout for TPD in Australia?

The average TPD payout ranges from $30,000 to $500,000, with the potential to receive multiple claims worth millions. For a free compensation estimate, contact us today.

How much TPD cover do I need?

When you buy TPD insurance, you should consider your living and medical expenses, particularly your current financial situation, compared with what you will need to meet living expenses when you can no longer work. The amount you’ll require as a permanently disabled person varies with age.

The majority of Australians don’t suffer a life-changing illness or injury until much later in life. Hence, they need less money until they can tap into their super fund. It’s best to consult a financial adviser before you buy TPD insurance.

How much does TPD insurance cost?

The cost of TPD Insurance premiums changes based on variables like your gender, age, and how much cover you need. However, in Australia, superannuation funds commonly provide several insurance policies for their members, including life cover and TPD insurance.

What is meant by own occupation TPD insurance?

There are generally two types of TPD insurance policies in Australia:

Own occupation policy: you can’t work again in the same job you did before becoming permanently disabled. It is generally easier to claim a lump sum payout for this type of TPD cover.

    Any occupation cover: you can’t work again in any job for which you are suited by your experience, training or education

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