Most Australians aren’t aware that their superannuation fund is there for more than retirement. If you are unexpectedly forced out of work by a personal injury, and you can show that your injury qualifies as a “total and permanent disability,” you may be eligible for an additional lump sum payment from your superannuation fund. You can withdraw this superannuation disability payment via an insurance claim even if you have not yet reached preservation age.
Your superannuation fund can carry within itself three types of insurance benefits:
If you suffer a serious injury that causes an inability to work, income protection can help you bridge the gap while you recover. If you pass away, your beneficiaries can access your superannuation fund and receive the life insurance benefit. TPD cover provides a payout in case you are permanently disabled and cannot work.
Insurance premiums for these types of cover through your super are paid automatically, so you can always contact your fund and find out if you already have this protection or if you can add it in an amount of cover that is right for you to provide an appropriate insurance payout in your time of need.
The TPD insurance cover payout is specifically designed for people who are forced to leave the workforce early. By being able to access such a super account payment, you can avoid withdrawing all of your superannuation fund early.
If you have been injured in a way that will leave you unable to work due to a permanent disability, your TPD insurance payout provides disability benefits that safeguard your future and that of your family. This compensation can be a huge relief if you have been worried about supporting yourself or your family after a severe injury.
Total and permanent disability claims must be supported with an evaluation from a medical physician. In the past, disabled individuals could simply show that their injuries made it impossible for them to continue in their previous career to qualify for a payout.
Today, you must demonstrate that you cannot be easily retrained or reskilled to a different career, which makes qualification harder. However, a law firm with a skilled superannuation and TPD dispute arm can help you get the compensation you need and deserve.
In general, a TPD insurance claim takes around six months for the insurance company to assess. However, it can take longer if there is a dispute, or be wrapped up in a shorter time frame if your claim is extremely clear and you have the right superannuation disability attorneys on your side.
Be aware that once the insurance company has made its decision in regard to your TPD claim, the trustee of the superannuation fund will need to follow up with their own separate assessment of the claim. This can add an extra month or two to the process.
There are five regulatory bodies governing superannuation funds in Australia, and one or more of these bodies may be involved if there is a dispute with your super.
The ATO is charged with ensuring that self-managed superannuation funds (SMSFs) comply with rules and regulations and that the correct tax is applied to all superannuation savings within such funds. If you are a member of an SMSF, extra complexities can arise in regard to payouts if the fund has not been correctly managed.
ASIC enforces the Corporations Act 2001, and is responsible for protecting consumer rights in regard to superannuation as well as the rest of the financial services sector, including superannuation and the conduct and disclosure obligations of superannuation trustees to their fund members. This also covers insurance products provided by the super fund.
Whether there is a tax-free component to your payout will depend on your age, and why and how you receive this payment. Accessing your super through an insurance claim can be for one of three reasons:
A permanent incapacity payment is typically a lump sum that you may be eligible for if two medical practitioners certify that you are unable to ever work again due to mental or physical illness or injury. If you have a TPD insurance benefit and are found to be entitled to it, a superannuation trustee may be able to reduce the tax burden you pay through a tax-free uplift, which can apply when withdrawing super funds under permanent incapacity condition.
When a TPD insurance claim is approved, the lump sum is paid into your superannuation account. You have the choice to withdraw the entire balance of the TPD benefit, withdraw part of it, or leave the entire balance in your super. Based on your financial situation, type of payout, and potential tax liability, you can decide what makes sense for you.
You have the right to make a disability claim to your superannuation fund. Our team of expert superannuation disability claim lawyers can assist you in navigating the complexities of gathering documentation and filing the claim, as well as managing disputes and appealing to regulatory bodies if needed. We operate on a no-win, no-fee basis, making it easy for you to get legal help when you need it. Contact us for a review of your superannuation disability claim today.