More Australians have been turning to their superannuation funds for Total and Permanent Disability (TPD) support after suffering serious mental health conditions. Yet many still face roadblocks when insurers fail to understand the real-world impact of psychological illness.
This blog explains how an insurer wrongly assessed our client’s future work capacity, why the medical evidence did not support a return to employment, and how a detailed IDR complaint ultimately led to the TPD claim being accepted.
Jimmy’s (not his real name) experience is a powerful example of just how complex and, at times, unfair the claims process can be. It also highlights why strong advocacy and clear medical evidence are so critical in securing the support people are entitled to and the TPD insurance payouts they deserve when they have to stop work due to mental illness.
The background: a decline in mental health and ability to work
During 2022, Jimmy’s mental health deteriorated to the point that he could no longer continue working. Jimmy came to us for assistance with lodging a TPD claim. We submitted an application supported by medical reports detailing his inability to work in any occupation suited to his education, training, or experience.
Unfortunately, the fund and insurer disagreed and rejected Jimmy’s claim.
You can read more about this type of claim in our earlier blog, “Super TPD claims and Mental Health”
The insurer’s reasons for rejecting the claim
The insurer denied the claim based on several comments made by Jimmy’s doctors. These comments were taken out of context or interpreted in a way that did not accurately reflect Jimmy’s true level of impairment.
Some of the insurer’s reasons for rejecting the claim included:
- A doctor noted that Jimmy’s return to work would depend on future psychological and psychiatric evaluations.
- His overall prognosis was described as “uncertain.”
- One doctor mentioned that short courses might help build confidence if he were ever to return to work.
- The insurer suggested that resolving Jimmy’s separate workers’ compensation matter might reduce stress and improve the possibility of returning to employment.
At face value, these points might appear optimistic, but they did not actually support the idea that Jimmy could return to meaningful work. They merely reflected the typical, cautious language used by medical professionals treating long-term mental health conditions, where outcomes are rarely absolute, and improvements are often hypothetical.
Further reading:
- The importance of your doctors for a successful TPD claim
- What’s the deal with TPD claims and your capacity to work?
A flawed “assessment” of job prospects
During its assessment, the insurer engaged a third-party agency to identify potential job roles it believed Jimmy might be capable of performing. While this practice is common, in this case, the analysis was fundamentally flawed.
The assessor looked only at theoretical tasks associated with certain roles, without considering:
- Jimmy’s continuing symptoms;
- his capacity to meet the demands of a workplace consistently;
- his lengthy absence from the workforce;
- whether such roles were realistically obtainable in the job market;
- whether he could maintain work even if he were hired.
TPD assessments are not about hypothetical possibilities; they must consider “real-world” employability. The insurer’s approach ignored this crucial principle.
Challenging the decision: lodging an IDR complaint
After reviewing the insurer’s reasoning, we lodged an Internal Dispute Resolution (IDR) complaint on Jimmy’s behalf.
Our submission highlighted several key flaws:
- Misinterpretation of the medical evidence – The insurer selectively relied on optimistic statements without considering the broader clinical picture provided by Jimmy’s doctors.
- Failure to consider real-world employment prospects – TPD policies require a practical assessment of whether someone is likely to secure and maintain employment suited to their background.
- Over-reliance on hypothetical improvements – The suggestion that short courses or a resolved workers’ compensation matter might help did not amount to evidence that Jimmy could return to work.
- Inadequate vocational analysis – The third-party assessment did not meet the standard of evaluating realistic, sustainable work options.
To strengthen the complaint, we obtained updated reports from Jimmy’s treating practitioners. This new medical evidence was unequivocal:
Jimmy was unable to return to work in any occupation for which he was reasonably suited by education, training, or experience.
These reports clarified any ambiguity and confirmed that the insurer’s decision was inconsistent with the weight of professional medical opinion.
Following our IDR complaint, the fund and insurer accepted Jimmy’s claim.
Why this case matters for people who stop work due to a mental health condition
Jimmy’s situation reflects a broader issue in the disability insurance industry. Mental health claims are often assessed with outdated or unrealistic expectations about recovery or employability. Insurers sometimes rely heavily on theoretical possibilities, without acknowledging the practical barriers people face when living with a severe psychological condition.
By challenging the insurer’s decision through a structured, evidence-based IDR complaint, we ensured Jimmy’s circumstances were fairly considered. His case highlights the importance of proper advocacy and the need for insurers to engage with the real-world impacts of mental illness, not just hypothetical outcomes.
Get help from a TPD lawyer
If you or someone you know is struggling with a rejected TPD claim, especially one involving mental health, professional support can make all the difference. You deserve a fair, informed assessment, and we’re here to help ensure you get it.
At Berrill & Watson, we offer free initial advice, no upfront fees and run cases on a “no win, no fee” basis. So, it costs you nothing to find out where you stand. If your claim has been denied, make sure it’s for legitimate and fair reasons – give us a call and we’ll give you experienced, practical and honest advice.
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