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We often get asked:
“Can I claim TPD twice?” “Can I claim TPD more than once?” “What if I have more than one fund?”
The answers aren’t straightforward, but context is everything. Read on.
For many years many Australians have held memberships to multiple superannuation accounts because of holding numerous jobs over a long period of time.
Historically this meant that some individuals were covered by more than one total and permanent disability (TPD) insurance policy and could claim if they were forced to stop working because of a sickness or injury. The best I’ve seen in my career was a claimant with eleven (!!) concurrent superannuation memberships.
For better or worse, the days of superannuants having multiple superannuation funds all with varying levels of funds under management, insurance, fees, and benefits is now behind us.
With the federal government’s numerous super reforms since 2015, the chances of a claimant having two or more fund memberships are low given:
superannuation fund membership is now “stapled” to Australian workers, meaning the super fund follows the worker from employer to employer;
superannuation funds are required to stop providing insurance on accounts that are inactive (where a contribution has not been received for more than 16 months); and
superannuation funds are no longer obliged to provide default insurance where an account balance is less than $6,000 unless the member opts in to the insurance (which is rare).
These reforms collectively mean that the chances, these days, of multiple TPD claims is low.
But if you did cease work before the super reforms and/or were a member of multiple super funds at the time you ceased work, it is worth asking…
So here’s the scenario: you suffer a debilitating mental health illness after working your entire life in sedentary positions. You have your doctor’s support that you should cease work because of ill health, and that you’re unlikely to return to work within your education, training, or experience. At the date you last worked, you were a member of Fund A and Fund B, both of which hold TPD coverage.
Can you claim TPD with Fund A and B?
Generally, yes! And you should try because you’ve paid premiums on two different insurance policies.
That said, there may be wording that necessitates a strategy in how you apply for both claims, so it pays to get legal advice.
Now, let’s say you get paid out your TPD claim and you return to work. You want to know…
So here’s the scenario: you injure your back severely having worked your entire life as a truck driver. Fund A pays you a TPD benefit. You’re young and ambitious, so after recovering you put yourself through university for a few years to become a teacher. You start working and get paid your super into Fund B, and after some time the worst happens, and you have a severe stroke, preventing you from working again.
Can you claim TPD with Fund B?
As always, the devil is in the detail. Some years ago, most insurers introduced provisions in their policies to prevent a new member from receiving default TPD insurance where they had previously received a benefit payable under another (or even the same!) policy.
Given such a question is not normally asked of a new superannuation fund member when joining the fund, some insurers argue that they retain the right to avoid coverage retrospectively despite taking your premiums in the intervening years.
We are yet to see these issues tested in Australian courts, but there may be some argument that if you suffer a separate and distinct disabling condition, you should not be prevented from claiming a second TPD benefit, despite the policy wording.
Again, for this argument to potentially pass “the pub test” you almost certainly must have retrained, reskilled, or rehabilitated yourself and it will depend on your unique circumstances.
It pays to get legal advice in these circumstances.
Know your rights.
If you are yet to make one or more insurance disability claims and you need advice about how your multiple policies interact and interplay, you are entitled to legal representation and Littles can help you.
If you have already lodged a claim and it has been rejected by a superannuation fund or insurer, you may be entitled to have the decision reviewed through an internal resolution procedure.
If your complaint has been upheld, you may be able to litigate in a court or lodge a complaint with the Australian Financial Complaints Authority (AFCA).
There are strict time limits to challenge an insurer’s decision, so it’s important you seek legal advice as soon as possible.
Put simply, Littles are experts in superannuation and insurance law matters.
Our insurance team has helped thousands of consumers claim their entitlements, and our Head of TPD and General Insurance has extensive industry knowledge and insight on how to maximise your prospects of success.
We also speak your language, at sixteen languages and counting. Forget paying for a translator or for a lawyer who doesn’t understand you and your cultural background.
All our superannuation and insurance law matters are conducted on a no win, no fee basis, and we don’t charge you upfront for any disbursements necessary to prosecute your claim.
If you would like superannuation and insurance law advice, reach out to Littles today by using our free Claim Checker.
Littles’ Head of TPD and General Insurance, Rowan McDonald, is an expert in insurance and superannuation law. Rowan is an experienced litigator and has prosecuted thousands of successful insurance claims for consumers.
Having worked in the insurance industry for over fifteen years, Rowan has an extensive industry contact list and regularly presents to disability support groups, financial industry professionals and multicultural organisations.
Rowan has also advised some of Australia’s top insurers, giving him unrivalled insight into the claim process from all perspectives. Rowan takes a pragmatic and common-sense approach to the advice he provides his clients.
For your free, personal consultation get in touch with Rowan today.