Written by: Angelica Adhar Total and permanent disability (TPD) insurance can pay a lump sum if a mental health condition leaves you permanently unable to work. This includes conditions such as depression, bipolar disorder, post-traumatic stress disorder (PTSD), severe anxiety, and schizophrenia.
In this updated 2026 guide, we’ll walk you through how to make a TPD claim for mental illness and what insurers look for when assessing claims. We’ll also explain how depression, bipolar disorder and PTSD claims are evaluated, and what to do if your claim is rejected.
Can you make a TPD claim for mental illness?
Yes, you can make a TPD claim for mental illness. If a mental health condition has left you unable to work and you held TPD cover at the time, you may be able to claim a lump sum payout. Most Australians hold this cover through their superannuation fund without knowing it.
Mental health is now the leading cause of TPD claims in Australia, making up almost one in three claims paid. In 2024, insurers paid out more than $2.2 billion in mental health claims, according to the Council of Australian Life Insurers.
Conditions that commonly qualify include:
- Depression, including treatment-resistant depression
- Bipolar disorder
- Post-traumatic stress disorder (PTSD)
- Severe anxiety disorders, including generalised anxiety and panic disorder
- Schizophrenia and schizoaffective disorder
- Obsessive-compulsive disorder (OCD)
- Eating disorders
- Borderline personality disorder.
Key takeaway
Your diagnosis alone does not determine whether your claim succeeds. What matters is whether your condition prevents you from working in line with your policy’s definition of total and permanent disability.
Can you make a TPD claim for depression?
You can make a TPD claim for depression if your condition prevents you from working and meets your policy’s definition of total and permanent disability. Severe and treatment-resistant depression are among the most common reasons people lodge mental health TPD claims.
Depression varies widely in severity. Mild or moderate depression that responds to treatment is unlikely to meet the threshold for a TPD payout, because the policy requires your inability to work to be permanent. Severe depression that has not responded to standard treatment, or that has required hospitalisation, is more likely to meet the definition.
To support a TPD claim for depression, insurers generally look for:
- A formal diagnosis from a treating psychiatrist, psychologist, or GP
- A documented treatment history, including medication trials, therapy, and any hospital admissions
- Evidence that your symptoms have continued despite treatment
- A treating doctor’s view that you are unlikely to return to work in the foreseeable future.
For example, a primary school teacher with treatment-resistant depression may have trialled several antidepressants and undergone cognitive behavioural therapy over a number of years, with limited improvement. If their treating psychiatrist confirms they are unable to return to classroom work and unlikely to do so, the claim is more likely to meet the policy’s definition of total and permanent disability.
Lawyer insight
Where access to a treating psychiatrist or psychologist is limited by cost or location, evidence from your treating GP can still support your claim. Specialist evidence is preferred where available, but it is not always essential at the lodgement stage.
Can you make a TPD claim for PTSD?
Yes, you can make a TPD claim for PTSD if your condition prevents you from working. PTSD often develops from work-related trauma, particularly for people in emergency services, healthcare, defence, and frontline roles. Where the condition is linked to your job, you may also be able to make a workers’ compensation claim alongside your TPD claim. These are separate processes and do not usually affect each other.
For example, a former paramedic with diagnosed PTSD may experience symptoms triggered by sirens, hospital settings, and shift work. With supporting evidence from their treating psychiatrist and psychologist, they may meet the definition of total and permanent disability under their policy.
A PTSD TPD claim is generally supported by a formal diagnosis from a treating psychiatrist, a documented treatment history, and evidence of the triggers that prevent you from returning to work. Where the trauma is linked to a specific work environment, the insurer will usually ask your treating doctors whether you can return to that environment.
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What do you need to prove for a mental health TPD claim?
To succeed in a mental health TPD claim, you need to show that your condition meets the definition of total and permanent disability set out in your policy, and that it prevents you from returning to work on a long-term basis.
For episodic conditions such as bipolar disorder, insurers look at the long-term pattern of your condition rather than how you are on any one day. This means records covering the frequency and severity of episodes, any hospital admissions, and ongoing medication management.
Most mental health TPD claims require you to show:
- A formal diagnosis of a recognised psychiatric condition
- A continuous treatment record from your treating psychiatrist, psychologist, or GP
- Evidence that your symptoms have continued despite ongoing treatment
- A treating doctor’s view that you are unlikely to return to work in the foreseeable future
- Consistency between your medical records, your claim form, and your employment history.
The definition of total and permanent disability varies between policies. Most superannuation TPD policies use an “any occupation” definition, which means you need to show you cannot return to any role suited to your education, training, or experience. Some policies use an “own occupation” definition, which only requires you to show you cannot return to your specific role. The definition that applies to your policy will affect what medical and vocational evidence you need.
Case summary
Our client, a senior software engineer, sustained a shoulder injury in a motor vehicle accident. The injury required multiple surgeries and resulted in ongoing physical limitations. Over time, he also developed secondary psychological symptoms.
He attempted a return to work but was unable to sustain his role due to the combined impact of physical restrictions and mental health deterioration. The TPD claim was ultimately accepted on the basis that he was unable to return to any suitable work within his training and experience.
This reflects a common feature of mental health TPD claims: insurers assess long-term functional capacity, not diagnosis alone.
How long does a mental health TPD claim take?
A mental health TPD claim generally takes longer than a physical injury claim, often running beyond 12 months. The symptoms of a mental illness cannot be confirmed by an X-ray or scan, so insurers rely more heavily on your treatment records and the opinions of your treating doctors when assessing the claim.
The assessment often takes longer if your treating doctors and the insurer’s doctors disagree about your work capacity.
For example, you may have reports from your treating GP and treating psychiatrist confirming you cannot work, while an independent psychiatrist appointed by the insurer reaches a different conclusion. When this happens, the insurer will usually request additional information, which can add more time to the assessment.
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Why are mental health TPD claims rejected?
Mental health TPD claims are most often rejected when the insurer concludes that you retain some capacity to work. If your claim is rejected, you have the right to challenge the decision, and a rejection does not mean the claim is over.
Mental health TPD claims are often declined for reasons including:
- An independent medical examination concludes that you retain some capacity to work
- The insurer argues that your disability began before your TPD cover was active
- Your treatment records show gaps, such as periods without contact with your treating psychiatrist or psychologist
- The insurer determines that your condition does not meet the “any occupation” definition because you could perform some unrelated role
- Claim forms contain inconsistencies between your medical records, employer statements, and member statements.
Before a final decision is made, your insurer or super fund may issue a procedural fairness letter. This letter sets out the information they are relying on to decline your claim and gives you the opportunity to respond before the decision is finalised. The evidence you provide at this stage can affect whether the claim proceeds to a formal decline or is reconsidered.
If your claim has been declined, you can request an internal review through your super fund or insurer. If the internal review does not resolve the issue, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA). For TPD and other superannuation insurance complaints, AFCA generally needs to be lodged within two years of the super fund trustee’s decision.
How a TPD lawyer can help with a mental health claim
A TPD lawyer can give your mental health claim the best chance of being approved without the delays, repeated requests for information, and disputes that may come up during assessment. This includes coordinating your medical evidence, identifying your date of disablement, and preparing a written submission that directly addresses your policy’s definition of total and permanent disability.
Having your claim properly prepared from the outset can reduce the risk of unnecessary delays or rejection later in the process.
