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Millions of Australian workers hold total and permanent disability insurance (TPD) automatically through their default super fund, acting as a safety net in case they suffer injury or illness and can no longer work in the job they were trained for.
This can be an overwhelming and stressful time – and it’s made worse when claims are drawn out or declined by insurers.
A recent case study highlights one of the reasons insurers have given to deny a claim, based on the existence of other causes preventing someone from working.
To accept and pay out on a claim, the person claiming needs to meet the TPD definition, supported by medical evidence from treating doctors or specialists.
These TPD definitions are different in each policy, depending on the terms.
Some TPD definitions now include a “causation” clause, which requires the person claiming to have stopped work solely due to the medical condition. Many more policies still require that the inability to work be solely due to injury or illness.
This means that the insurer might try to reject the claim if there are other factors involved in the claimant stopping work or remaining out of work, like being laid off, poor performance or misconduct.
This is a problem – especially for workers who are suffering from mental health conditions that lead to their employment ending, but who may not have yet sought treatment or talked about what they were experiencing.
Our client David* worked as a general practitioner across several clinics. His mental health had deteriorated over an extended period and he had actively sought psychiatric treatment.
After his symptoms became worse, he lodged a claim for TPD benefits, under his insurance policy.
The insurer declined the claim, on the basis that his medical licence was cancelled a few months prior. Their argument was that his illness was not the sole reason that he had stopped working, and therefore he didn’t meet the definition of Total Disability.
A complaint was made to the Australian Financial Complaints Authority (AFCA), who found that the insurer had not assessed the claim correctly, was not entitled to decline the claim on that basis and would need to reassess.
In its reasoning, AFCA says that the question of whether the person claiming is unable to do their usual job should be determined by whether their medical condition rendered them unable to perform those duties.
“If the medical condition causes an inability to perform the duties, then it is not relevant that there may be other things which also cause an inability to work.” - AFCA
The decision continues that the inability to work should be tested on whether the illness is serious enough to stop the claimant from being capable of doing their duties, rather than their overall employability.
If you have lodged a claim and your insurer declined it or is investigating non-medical factors that may have contributed to you being off work, it’s important that you seek legal advice to understand your options.
Our experienced superannuation insurance team has helped thousands of Australians access their entitlements. If you’ve had a claim declined or think you might have a claim, we know the system and are here to help. Contact us today to find out all your legal options.
*Name has been changed to protect client privacy
You may be entitled to a range of benefits or insurance through your super.
Use our free online claim check to start your assessment.
If you're unable to work due to illness or injury, you may be eligible to make a claim on your superannuation insurance. Your injury can be physical or psychological and doesn't need to be work-related. We can help you understand what options are available to you.
We have lawyers who specialise in a range of legal claims who travel to Australian Capital Territory. If you need a lawyer in Canberra or elsewhere in Australian Capital Territory, please call us on 1800 675 346.
We have lawyers who specialise in a range of legal claims who travel to Tasmania. If you need a lawyer in Hobart, Launceston or elsewhere in Tasmania, please call us on 1800 675 346.