When you’re injured at work and unable to do your usual job for a period, workers compensation will usually cover some or all of your lost income and medical expenses, but what if you suffer an injury or illness which has nothing to do with your work?
Your superannuation fund may include insurance cover for non-work-related disabilities which prevent a worker from continuing in paid employment. Income protection insurance may cover you for a temporary absence from the workforce due to illness or injury, however if your disability permanently prevents you from earning an income, you may be eligible to claim Total & Permanent Disablement (TPD) through the insurance provided by your super fund.
TPD policies are not all the same. An important difference between policy cover is whether the disability prevents you from working in your “own occupation”, or will only cover you if you are unable to work in “any occupation”. This is an important difference because if a disability prevents you from performing your usual role, but you have capacity to perform some other work duties, you may not be covered by an “any occupation” policy.
Where you are covered under an “own occupation” policy you would be entitled to benefits if you are unable to work in your usual role, regardless of whether you have capacity for alternative employment. Where the TPD covers you for being unable to work in your usual occupation, your ability to earn some income from other work will not necessarily mean you have no entitlement to receive benefits under the policy.
When your super fund TPD is “any occupation”, and although you are unable to perform your usual occupation, you are able to do other work within your education, training or experience (ETE), you may not be entitled to receive benefits.
What does the insurer mean by ETE? The insurer will consider whether the medical restrictions on your ability to perform certain duties would still allow you to perform other duties which do not require significant re-training, further education or gaining entirely new qualifications.
The case of Birdsall v Motor Traders Association of Australia Superannuation Fund Pty Ltd said that a TPD claim is not supported where some relatively minor re-training is required to bring your education and training in line with the required skills of the new employment. The example in Birdsall’s case was a motor mechanic who was physically unable to continue to work in that trade, but was medically assessed as capable of working full hours in a sales job for which he had transferable skills, such as using a computer, although he required some level of re-training in the use of particular software.
Another important consideration is whether you are ‘unable’, or only ‘unlikely‘, to return to suitable employment. If, for instance, medical opinion says that you are unlikely to be able to work again, this is not the same as saying you are unable to ever return to suitable work. Age may be relevant to whether a return to the workforce is unlikely, for instance a young person may be found more likely to re-train or otherwise regain some capacity than an older person.
When the TPD insurer is considering a claim, the most important evidence is expert medical opinion. The expert’s opinion must align with the definition of TPD used in the policy. For this reason it is important to ensure that the medical expert is asked all the right questions in a request for a report in support of a TPD claim.
When a TPD claim is rejected, the most likely way to challenge the decision is to say that the decision was unreasonable based upon the evidence the insurer had available at the time the decision was made. For this reason, it is important to ensure the medical opinion and report provided to the insurer addresses the criteria for TPD status under the particular policy.
The first step in challenging the decision is to request an internal review. Once an internal review is requested, the insurer must provide detailed reasons for its decision as well as the opportunity for the claimant to provide further (new) information for the decision maker to consider during the review. This step can provide an opportunity to address any shortcoming in the medical evidence in satisfying the policy definition of TPD.
Under some circumstances a workers compensation injury may result in a permanent disability which leads to a total incapacity for employment. Under the Return to Work 2014 (SA) scheme, a worker must be medically assessed as having suffered at least 30% Whole Person Impairment (WPI) to receive ongoing income and medical support.
When the Return to Work Act 2014 (SA) (the RTWA) commenced in July 2015, the test of ongoing total incapacity was replaced by the category of Seriously Injured Worker, as determined by the 30% WPI threshold test. TPD policies apply different tests for work incapacity, and may result in a TPD benefit being payable, even in circumstances where workers compensation benefits are limited.
An example of total disability arising from employment, but not satisfying the RTWA test for Seriously Injured Worker, is a worker who suffers a number of separate work injuries for which the WPI percentages cannot be combined, but the cumulative physical impact upon the injured person’s capacity means it is impossible to return to work. In such cases a successful TPD claim could be of significant assistance.
It is essential to seek legal and financial advice as there may be significant tax and time limitation issues involved, as well as impact upon entitlement to other benefits such as Centrelink and workers compensation.
National Disability Insurance Scheme (NDIS)
If you suffer an illness or injury which causes a permanent disability which impacts upon your ability to earn, whether or not you are covered by TPD insurance, NDIS funding may be available for some support services. These services include support to maintain social and community engagement, rehabilitation and assistance to find employment, treatment and household support.
NDIS entitlements are subject to eligibility criteria, but the benefits do not include income support, which may be available through Centrelink Disability Support Pension.