The component of TPD – Total and Permanent Disability – forms a part of every superannuation plan available to Australian workers and business owners. It’s one of the essential insurance components that are required to be a part of the superannuation deal, and covers individuals in the event they suffer a total or permanent disability which affects their ability to earn an income.
Let’s look at some key points to take note of when it comes to TPD and TPD claims.
#1 – How Long Does a TPD Claim Take?
If everything goes smoothly, then a successful claim should take around two to three months, from the point where all relevant and necessary documentation has been submitted to the insurer. Obviously, if the insurance company is made to wait for more requested documents to be filed, then the process is going to take longer, maybe months longer.
Another way to avoid delays on a decision is to be sure to avoid errors on your TPD claim. If all required paperwork is provided from the start, and each form is carefully filled out, then you should have a result by the three month mark at the most.
Another way to expedite your TPD claim is to team up with a law firm that understands the process and is familiar with dealing with the insurance companies.
#2 – You Can Claim TPD More Than Once
If you happen to have TPD insurance under more than one policy, then the answer is you can potentially make more than one claim. For example, you have a superannuation fund which includes TPD insurance, and you also have another private insurance fund which covers TPD as well.
Making two claims can get complicated, so once again it’s in your best interests to seek the help and assistance of a qualified law firm to simplify the process.
#3 – Do You Have To Pay Tax On a TPD Payout?
It seems like practically everything in Australia is taxed apart from a lotto win. So what’s the deal with TPD then? Does it also attract a tax, or is it tax exempt?
It is and it isn’t. Again, consulting a lawyer will clear this up for you, but basically there is a component of TPD, when it’s part of a super fund, that is tax exempt. This component is called the “Super Disability Benefit” and is not subject to tax by the ATO.
It’s important to note that the amount of TPD that’s exempt from tax varies, and largely depends on the time gap between when the insured suffered the disability, and the intended retirement age.
Anyone over the age of 60 will have their entire TPD insurance paid tax free.
#4 – Are You Allowed To Work Again After Making a TPD Claim?
This can vary from claim to claim and insurer to insurer, but it is possible to be allowed to return to the workforce after successfully making a claim for TPD insurance.
You really need to check with your lawyer to determine your options about returning to work, and whether your insurance company allows this.
It really depends on the definitions within the policy itself. As an example, the policy may state that to receive the TPD payout, you can never return to work in your usual job or profession, or positions you’ve already been trained for. This can leave the option open of working in a completely different field.
So there is absolutely no confusion though, talk to your lawyer first about your policy.
#5 – How To Make a TPD Insurance Claim
Many people choose to do it themselves, hoping to save some cash by not having to pay a lawyer. While it’s entirely possible to successfully claim yourself, your chances of receiving the payment owed to you, in faster time and with less complications, is amplified when you enlist the help of a specialist law firm that fully understands the TPD claims process.
Many law firms only charge their fee after a successful outcome has been reached anyway, so you won’t be out of pocket.