Can't work because of illness or injury? Let’s look at your super

Superannuation is something many of us take for granted until retirement approaches. But super is far more than a nest egg.

What many people don’t realise is that it’s likely you will have some sort of disability insurance cover through your super fund. This is especially important if an illness or injury affects your ability to work.

Research shows that during times of crisis, like a pandemic, more people access their disability insurance. Rather than pulling out $10,000 under the Government’s early access scheme, you should first consider what insurance entitlements you have available. 

In this article, we want to give you a better idea of what superannuation insurance is, and how it can help you during the medical and economic calamity caused by COVID-19.

What is insurance through my super?

As well as helping members save for their retirement, most super funds offer insurance benefits that cover disability, illness and/or death. Successfully claiming a disability benefit through your super can result in a lump sum payment.

Some forms of insurance that super funds offer are optional – meaning you need to opt-in to take them up – but most funds also have what’s known as 'default cover', which is coverage you’re automatically entitled to as a member of the fund.

There are three main types of default insurance. These are:

  • Income protection: an agreed amount, usually paid as a monthly instalment (for either two years, five years or until you turn 65) that is paid to you if you temporarily can’t work your usual job
  • Total and permanent disability (TPD): a lump sum payout in the event you have an injury or illness that means you permanently can’t work your usual job
  • Terminal illness or death cover: a lump sum that is paid to you if you are terminally ill, or paid to your family if you pass away

Your super fund will be able to tell you what insurance you have, and what your insurance covers you for. We can tell you for free whether you have a claim.

Will a superannuation insurance claim affect my account balance?

Not at all.

Making a claim on your superannuation insurance is like making any other insurance claim – like home and contents or car insurance. You just need to be able to prove you’ve met the policy definitions in order to get a payout.

If you look carefully at your superannuation fund account statements, you will see that you’ve been paying a premium for your insurance, so it’s your right to access it if you need it.

If your super account balance is completely drained, as occurred recently for over half a million Australians who accessed their super through the Government's COVID-19 early access program, your insurance ill cease. That will mean you won’t be eligible to claim for a disability benefit if you have to cease work after cover ended.  

With job uncertainty in our current economic crisis due to COVID-19, it’s important to get advice before accessing your superannuation account balance to ensure you are not losing valuable insurance cover that you may need.

What is total and permanent disability (TPD)?

TPD claims are for individuals who are permanently unable to do their usual job, or any other job for which they are reasonably suited, based on their education, training or experience.

Also known as disability cover, TPD is one of the most common insurances offered in 'default cover' packages provided by superannuation funds.

So if you’re a tradie who has permanently injured your shoulder and can’t work on the tools ever again, you may have a claim. Or if you’ve been diagnosed with an auto-immune disease that affects your motor skills, you may have a claim.

Additionally, if you’ve been made redundant due to COVID-19, you may have a claim if you were covered at the time for an old injury that will prevent you from being able to work again the future.

TPD payments are usually paid as a lump sum and, depending on the terms of your policy and your injury, can be significant.

Can I make a workers’ compensation / road accident claim and a super claim for the same event?

Yes, you certainly can.

If you’ve been injured at work or on the road, our team will reach out to you and check whether you also have benefits under the relevant WorkCover or road accident compensation law in your state.

Our team can then provide you with advice, completely free of charge. It won’t cost you anything to find out what your entitlements are.

What if I have more than one super fund?

It is extremely common for people to have more than one super fund.

You may have heard people telling you to 'roll over' your multiple funds into a single fund to avoid fees and premiums on unused accounts. While it is important to protect your savings from being whittled down by unnecessary payments, it’s also crucial to keep in mind that different super funds offer different insurance policies; some of which may be more advantageous in one set of circumstances to another.

For this reason, we always tell people who are injured and off work to avoid rolling over their funds until they’ve spoken with an expert.

How long does it take to make a claim?

Most of our TPD claims are processed in under 9 months, but can be as little as three months.

It depends on your condition and your insurer, but having a lawyer help you with the paperwork generally results in a more favourable (and faster outcome).

We’ll tell you at the start of your claim how long we think the process will take, and keep you informed along the way as to how your claim is progressing.

When should I contact you about my super insurance?

As soon as possible after you stop work, or after your injury or illness diagnosis – whichever is first.

If you’ve had your insurance claim rejected by your super fund, we can also look at this and let you know what your rights are. We know what loopholes are often used to reject legitimate claims and have had considerable success in having these decisions overturned.

Call us for free super claim check now and one of our expert lawyers will assess your eligibility. At Maurice Blackburn, your first consultation is free*.

If you or someone you know has been injured or diagnosed with an illness and is worried about getting back to work, simply get in touch online or call us on 1800 196 050.

RELATED LEGAL SERVICES: Superannuation claims

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Craig Parrish

Maurice Blackburn Sydney
Craig Parrish is a Senior Associate and State Litigation Leader in our superannuation and insurance team in Sydney. Craig spent his first five years at Maurice Blackburn representing injured workers in compensation claims under the Victorian WorkCover scheme. Since then, his focus has been ...

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