Defining TPD and returning to work after a superannuation insurance payout
Sadly, many people who are entitled to Total and Permanent Disability (“TPD”) benefits do not claim them because they are unaware that they are entitled to be paid the benefit. TPD claims can be confusing and the following article provides some clarity and gives some guidance on who can successfully claim and what must be proved to do so, including how the meaning of TPD within each policy affects your claim. We will particularly look at the common question, ‘Can I return to work after my TPD claim is approved (accepted) and I've received a payout?’
Claiming and being paid a TPD benefit can make an enormous difference to your life if you have ceased work due to illness or injury. The large lump sum TPD benefits, which are paid into your superannuation fund, can provide you with much needed retirement savings to live off later in life, or they can be withdrawn to give you money to live off right now.
Can I return to work after my TPD claim has been approved?
The answer to this specific question varies and depends on the definition of TPD which is applied to your claim.
The meaning (definition) of TPD varies from policy to policy and to be 100% sure about what work you can do during or after you claim, we would need to check your policy. However, because we do this work all the time, we can tell you that TPD usually means one or more of the following (summaries only):
- must not ever work again within your education, training and experience;
- must not ever work again within your usual or own occupation;
- must be unable to do your activities of daily living; and
- must lose the use of two limbs or your vision.
Usually, more than one of the above definitions applies.
Importantly, TPD doesn’t always require that you cease work. We have helped plenty of people access TPD benefits under the “activities of daily living” (“ADL”) or loss of use of limbs/vision definitions whilst still working. Also, it’s possible, although more difficult, to claim benefits under the education, training or experience or usual or own occupation definitions whilst still working, provided that the work that you are doing is not within your education, training or experience.
What does it mean when a TPD policy talks about “education, training and experience”?
Under most TPD insurance policies, TPD requires that you stop working due to illness or injury and be permanently unable to work within your education, training or experience. There have been a few legal cases which have looked at what working within your education, training and experience means.
Basically, it means work you can do without having to be retrained or without further education. Therefore, if you cease work in your own occupation because of illness or injury and there are no other jobs that you can do without retraining or further education, you may be entitled to the TPD benefit.
For example, a carpenter who can no longer work “on the tools”, but is able to return to work as a TAFE or high school teacher after retraining would (in most case) still be entitled to a TPD benefit.
Warning - usually you need to do no work at all for a few months first (i.e., the TPD waiting period).
It’s not always clear exactly how extensive the education or retraining must be. However, we know from the leading case on this issue, that a truck driver who retrained to become a taxi driver (via a 4 - 5 day course) was not TPD. That is, the court found that this level of re-education/retraining was not significant enough for his work as a taxi driver to be outside of his education, training or experience.
Usually, we say that the education or retraining would need to be certificate level or better and the course would need to take a few months (at least), but this is open for debate.
Contact us for free advice if your TPD claim has been delayed or rejected: 03 9448 8048
Also, sometimes insurers will say that you can return to work in an unrelated field/occupation taking into account your “transferrable skills” and, therefore, you are not TPD. This is a common tactic used by an insurer when assessing and rejecting a TPD claim. They may say, for example, that a builder’s labourer is able to return to work at a hardware store as a sale assistant or in a call centre.
Often these decisions can be challenged on the basis that the proposed work is not within your education, training or experience because it is work that you have not done before. Also, it may be possible to say that this alternative work is not available or is still work that you are not able to do taking into account all the requirements and your existing skills (i.e., if there are no jobs in your area or you have never done customer service and your illness means you are unable to do this work).
What does it mean when a TPD policy talks about “own occupation”?
To be TPD under an own occupation TPD definition, you must cease work and not be able to return to your own occupation. This would require the support of your doctors (ideally a specialist and GP) and close examination of the duties of your own occupation and medical evidence addressing why it is you cannot do these duties.
Therefore, under the own occupation definition, you may be able to return to work in a different job during or after a successful TPD claim without any adverse impact on your claim.
What are “activities of daily living (ADL)”?
The exact wording and requirements of this TPD definition vary amongst insurance policies.
However, it usually requires that you be unable to do any 2 of the following 5 things without the assistance of another person:
- Moving (i.e., walking); and/or
Usually, if you can do the above things with assistance from an aid (i.e., a modified toilet or walking frame) you do not satisfy the definition, although this varies between policies. Please contact us for free advice if your TPD claim has been delayed or rejected due to issues around activities of daily living.
Therefore, provided you are unable to do the ADL, you may be able to return to work after a successful TPD claim without any adverse impact on your claim.
What is the definition of “loss of use of limbs”?
The exact wording and requirements of this TPD definition vary amongst insurance policies. However, it usually requires that you lose, or lose the use of:
- both legs; or
- both arms; or
- one leg and one arm.
- The sight in one or both eyes.
Provided you have suffered the loss of limbs or the loss of use of limbs/sight, you may be able to return to work after a successful TPD claim without any adverse impact on your claim.
Do insurers sometimes assess claims under the wrong definition?
Deciding which TPD definition applies to you can be complicated and not only depends on what your policy says, but an interpretation of the relevant policy terms.
For example, under some policies you will not get a work-based definition of TPD if you’re working fewer than 15, 20 or 30 hours per week averaged over the 12 months prior to becoming entitled to claim a benefit.
In such cases, the insurer may apply an ADL or a loss of limbs definition rather than a work-based definition. This can result in the rejection of your claim and you should always check that the insurer’s:
- determination of when you last worked; and
- calculation of the hours you worked prior to claiming;
to see if it is accurate.
Get help from a TPD lawyer
As you can see, the available definitions of TPD vary considerably from policy to policy and there are a number of different ways of satisfying the requirements. If you are considering lodging a TPD claim, we recommend that you seek professional advice to make sure you are paid your full entitlement.
Remember also that you may have insurance through more than one super fund or insurance policy and there may be options to make more than one TPD claim.
If you’d like more information or assistance with your TPD claim, get in touch with today’s blog writer, Tom Cobban.
Or you can contact us directly by phone or email. It costs you nothing to find out what your rights and entitlements are.
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