Income protection insurance can be a financial lifeline when you have to stop work due to illness or injury. However, making a successful claim is not always straightforward. Insurers apply strict policy definitions and require detailed evidence before paying benefits.
In this blog, we explain some of the main challenges people face in income protection claims and how to manage them. These include issues and disputes related to:
- medical evidence;
- date of disablement; and
- how pre-disability income is calculated.
Importantly, benefits can usually be paid if you are either partially or totally unable to work due to illness or injury.
Get an overview of income protection insurance in our earlier blog, “What is income protection insurance and why is it important?”
What medical evidence do I need for an income protection claim?
Medical evidence is the cornerstone of every income protection claim. To qualify for benefits, you must prove that your condition prevents you from performing the important duties of your occupation and sometimes any occupation, depending on your policy.
Also, the policy definitions that must be met can change depending on how many years you have been on claim (i.e., more than 2 years) or your employment status.
Common challenges with medical evidence for income protection claims
- Incomplete or inconsistent medical reports
Insurers may reject claims if reports don’t clearly explain how your condition affects your capacity for work.
- Conflicting medical opinions
If your treating doctor’s view differs from an insurer-appointed doctor (IME), this can delay or derail your claim.
- Insufficient detail in medical reports
Reports that describe symptoms without connecting them to your job duties often fall short.
- Incorrect dates
If your doctors say you became unable to work due to illness or injury from a time when you weren’t working or didn’t have insurance cover.
Medical evidence that can strengthen your claim
- Ask your treating doctor or specialist to describe your work limitations in practical terms (e.g., inability to lift, concentrate, or work safely).
- Ensure all certificates, reports, and treatment notes are consistent about your diagnosis, incapacity, work incapacity dates and prognosis.
- If the insurer requests an independent medical examination, seek legal advice before attending so you understand your rights and obligations. Read more about this in our earlier blog, “Do I have to go to a medical appointment arranged by the insurer or superannuation fund?”
Further reading:
- Do I need to be receiving medical treatment when lodging a TPD or income protection claim?
- TPD and income protection definitions; implications for medical treatment obligations
What is the date of disablement for an income protection claim?
The date of disablement is a crucial concept in income protection claims. It is usually the point at which you became unable to work due to illness or injury and stopped all work.
It is important because it determines when your waiting period starts and how your benefits are calculated. Sometimes, your waiting period will not start until you have stopped work AND seen a doctor.
Common disputes regarding date of disablement
The date of disablement is one of the most common points of dispute in income protection claims.
Problems arise when:
- you have moved from full-time to part-time work, without a period of no work at all - most policies require you to have a week or two of no work before you can receive income protection benefits on a partial reduction of your work due to illness or injury.
- you gradually reduce work hours before stopping completely - the insurer may argue you weren’t disabled until later, or they may calculate your monthly benefit based on a lower pre-disability income (due to working fewer hours).
- your doctor’s medical certificate doesn’t clearly specify when you first became unable to work, or you didn’t see a doctor until after you stopped working.
Tips to avoid disputes over date of disablement
Document your timeline carefully:
- Record your last full day of work and any changes in duties or hours, and consider keeping your own diary of issues.
- See your doctor and have them record the troubles you are having with work before stopping working.
- Ask your treating doctor to certify a specific date of incapacity that aligns with your employment records.
- Keep copies of all correspondence with your employer and medical professionals.
The clearer the evidence around your disablement date, the smoother your claim will be.
How is pre-disability income calculated for an income protection claim?
Your pre-disability income determines how much you’re entitled to receive under your policy. Income protection benefits are typically 75–85% of your pre-disability income, which is your earnings in the 12 months before you became disabled.
But this calculation is not always straightforward and can be different under some policies. You may also have an agreed value policy, which will pay you a set monthly amount no matter what your income was before you stopped work.
Common challenges which arise with pre-disability income
- Different definitions of “income”
Some policies use gross income, others net income, and some exclude overtime, bonuses, or commissions.
- Offsets and other income
If you receive payments such as workers’ compensation, Centrelink, or partial wages, the insurer may reduce your benefit.
- Timing disputes
Insurers may choose an unhelpful reference period (for example, the last 12 months) that doesn’t reflect your usual income level. They may say that your date of disablement doesn’t start until you see a doctor, which may be 3 months after you last worked, which means your pre-disability income, calculated over 12 months, is much lower.
Tips to clarify your pre-disability income and protect your entitlement
- Gather complete financial documentation (tax returns, payslips, group certificates, business financials).
- Review your policy’s definition of pre-disability income and how offsets apply.
- If the insurer’s calculation seems incorrect, request a detailed breakdown and seek professional review.
- See your doctor regularly before ceasing work.
Accurate financial evidence and early legal advice can make a significant difference to the benefit you ultimately receive.
Further reading:
“How much will my monthly income protection benefit be?”
Get help from a disability insurance lawyer
Income protection insurance is designed to provide peace of mind when you can’t work due to illness or injury, but the claim process can be fraught with technical and evidentiary hurdles. Ensuring strong medical support, clear disablement dates, accurate income calculations, and careful handling of recurrent claims can make all the difference.
If you’re facing any of these issues, our superannuation and insurance team can help you prepare, lodge, and manage your income protection claim. We offer free initial advice, no upfront fees and run cases on a ‘no win, no fee’ basis.
Contacting Berrill & Watson
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📞 Anywhere else in Australia: 03 9448 8048
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