Community & Business
10 April, 2022
Super is more than a retirement fund
PEOPLE often think of superannuation as a nest egg for retirement, but it can also be an important resource if you’re unable to work because of illness or injury.
BY KRISTYN LENNON
That’s because most Australian workers are covered by a total and permanent disability (TPD) insurance policy through their super.
TPD insurance allows people who are out of work permanently because of injury or illness to apply for a lump-sum payment.
This insurance can be of significant assistance, as missing work through illness or injury can cause serious mental and financial strain.
If you have a super fund, you most likely have TPD insurance as part of your superannuation plan.
While policies vary, you’re likely to qualify for a lump-sum TPD benefit if:
You’re unable to continue in your usual occupation due to injury or illness.
You’re absent from your usual occupation for a continuous period, also known as a waiting period (usually three to six months).
At the end of the waiting period, the insurer is satisfied you’re unlikely ever to return to any regular work within your education, training and experience.
The injury or illness doesn’t have to be work-related for a worker to make a TPD claim. You could have suffered a stroke, been diagnosed with cancer or be struggling with a mental illness. If the condition causes you to be unable to work in your usual occupation, you could have a claim.
TPD benefits vary depending on the policy, but can be worth tens or hundreds of thousands of dollars.
Your age can affect the amount you receive as a benefit and define whether or not you’re entitled to make a claim. While most policies attached to your super fund will still cover you if you suffer from a pre-existing illness or injury, some won’t.
Quite often, you can claim a TPD benefit years after stopping work, even if your super account is closed or if you no longer hold insurance on your super account.
If you have TPD insurance through more than one super fund, you should be aware that many insurers are now adding clauses to prevent people from claiming against multiple policies.
If you need to make a claim, it’s best to submit it as soon as you can.
Getting professional advice before making a claim will also help you to navigate the policy fi ne-print to ensure you get everything you’re entitled to.
Kristyn Lennon (nee Knox) is a Cairns-based lawyer who heads Maurice Blackburn’s Tablelands office. This legal information is general in nature and should not be regarded as specific legal advice. If you have a legal question you would like Kristyn to answer you can contact her at klennon@mauriceblackburn.com.au
