July 18, 2024 • 34 mins
What is Total and Permanent Disability? If you have sustained a serious work injury and you are unable to work, are you eligible?
Today we are joined in conversation with Dr Caroline Howe and members of the My Social Support Network by David Coorey from Carroll & O’Dea Lawyers to talk about how and if you might qualify for TPD, what it is and where the money comes from...
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Episode Transcript
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S1 (00:01):
Hello and welcome to the My Social Support Network podcast,
a series to guide you along the path to recovery
while on workers compensation. In this series, we will answer
questions from you and provide information from experts and people
with lived experience currently going through worker's compensation and those
who have made their way to the other side. Through
these interactions, we'll be giving you tools, advice, but most importantly,
(00:24):
encouragement on what can be a stressful time when you're
also recovering from an injury sustained in your workplace. The
information contained in today's episode has been provided as general
advice only. The program has been prepared without taking account
of your objectives, financial situation or needs. You should before
you make any decision regarding any information, strategy or products mentioned,
(00:45):
consult your own financial advisor to advise whether that is
appropriate having regard to your own objectives, financial situation and
the needs.
S2 (00:53):
Today we have David Khoury from Carolyn O'Dea lawyers with us,
and we're really excited to be able to have this discussion,
because today we're going to be talking about total and
permanent disability claims. David, can you tell us a little
bit about how you ended up where you are in
the world of total and permanent disability?
S3 (01:13):
So my background is actually that I worked in the
community sector for almost 20 years. I was 16 years
working at Legal Aid, um, working in consumer law, uh,
and helping clients who were often in vulnerable situations with
financial service disputes. And I worked there in the city office,
and I also did some work, um, up in the
(01:34):
mid-north coast, working with First Nations communities. I love the work.
It was a great job, but it led to another challenge,
which was the opportunity to work for the Ombudsman Service,
Financial Ombudsman Service as an ombudsman there. And then in
the last three years, I've come across the Carolina Way
to work in an area that I was working in
at Legal Aid as part of my role heading up
(01:55):
the Consumer Law team in TPD work. I really like it.
I think it's an area that sort of touches on
some really challenging issues for vulnerable clients, including how do
you access a financial service product that's actually been set
up to help you? TPD often not really that easy
to access it. It's a real access to justice issues,
(02:16):
and ASIC has flagged those in more than 2 or
3 reports. It's really been concerned with the level of
challenges and the barriers that exist in this area. I
like helping vulnerable clients, but I also like getting people
their cash, and I think it's an area where people
don't realize an average claim is worth $140,000. It's a
lot of money. Unless you access it, you're not going
(02:37):
to get that money. You have to be able to
step into this.
S2 (02:40):
David, can you explain what TPD is?
S3 (02:43):
Um, okay. So TPD stands for total and permanent disablement
and it's a form of life insurance. And it sits
within often sits within people's superannuation. But it could actually
be a standalone retail product that you go out and
purchase in the marketplace. So okay, so it can sit
within super. And when it does, the only way that
(03:04):
you can access that is to make a claim through
your super fund for access to the insurance benefit. So
it's not your super component. It's a separate claim amount
the closer you get to retirement age, by the time
someone's getting into their mid late 50s early 60s those
policies start to the numbers start to go down. It's
(03:26):
an amount of money that's meant to represent early retirement.
It's meant to be a replacement. And the way that
I like to think of TPD is ASIC framed it
as holes in the safety net. Well, that safety net
is a public and private safety net right for all Australians.
So it is an insurance product. It does sit mostly
within super. It's a policy that's set up to help
people at the time. They can't work.
S2 (03:48):
There are so many questions.
S3 (03:49):
There's lots of questions.
S2 (03:50):
There's lots of questions.
S3 (03:52):
What about that one about pensions? Can it affect your pension.
It makes sense that the government system. So Centrelink disability
support pension is complimentary to this system. If anyone at
Centrelink is suggesting that you're not eligible for the DSP
because you're getting a TPD benefit, they have misunderstood the
legislation that they're working under. It is not correct. It
(04:14):
does not make you ineligible to claim for a disability
support pension to be claiming for TPD. It can be
that if you receive a TPD benefit and you're on
a Centrelink payment, there can be a preclusion period that
is applied depending on the amount that you're receiving. But
the way to really ensure that Centrelink understands that is
you should say to Centrelink, I have an early access
(04:37):
to super payment, if they understand it as an early
access to super payment in brackets. It's not compensation because
they try to lump it in as being a personal
injury compensation claim. It's not that, not at all. And
so if you get anyone at Centrelink saying that they've
given you the wrong assessment and you should certainly raise
that with Centrelink.
S2 (04:57):
How would someone know that they have access to this?
S3 (05:02):
The starting point really is TPD and super. The origins
of it was in terms of the default product, which
is what most Australians have actually got its default because
the super trustees actually went out into the marketplace in
the late 90s and early 2000 to set up what's
called group life insurance. So the trustees got the tick
(05:22):
of approval from APRA, the regulator, to go out and
offer a product that helps people who need to actually
access early retirement funds. So it's a product that's set
up to do that. The way that it was set up,
because it was coming out of your super, it's a
default product, which means that you didn't necessarily choose it.
It was there and it's sitting in your account. The
premiums have been taken out, but because it's sort of
(05:44):
sitting in your Superfund and no one really looks at
their super statement, most people don't even know that this
money is available to them if they're disabled and if
they can access the policy terms. So the way to
really access a super claim and a TPD claim is
to look at the circumstances in which you've become disabled
and work out whether you had insurance coverage at that date.
(06:05):
That's kind of the magic formula to TPD. You need
to have insurance coverage at what's called date of disablement.
They're not immediately obvious what those two things are because
it can sometimes be difficult to work out. Did you
have cover and what is actually your date of disablement?
Because it may not necessarily be the last physical date
that you worked. It could be an earlier date than that.
(06:26):
And often in in my experience, earlier dates are usually safer.
TPD claims to make.
S2 (06:33):
It's really interesting you say that because one of the
things when someone has a worker's compensation claim that does
not get paid in New South Wales, but does in Victoria,
is super. And so what can happen is that they
don't know that they've got access to TPD, the scheme
isn't paying super and then all of a sudden their
(06:56):
access to these claims goes, yeah.
S3 (06:59):
Look, it is a tricky area. And because zip is
one of those areas that sort of it sits in
the background, I think we've probably got one of the
best financial service safety nets of anywhere in the world.
Like it's an amazing system. If I can give you
an example, it might be the easiest way to sort
of explain it. I had one client come to me
and he was really peeved that he'd been paying these
(07:20):
insurance premiums on his policy, because he hadn't worked since
2009 when he came to see me. It was 2023.
And he said, Dave, I've been paying all of this
money for this insurance coverage. That's worth nothing to me.
We went through some questions. We worked out that he'd
last worked in 2009. We worked out that he'd been sick,
ill or injured at that date, which is a trigger
(07:41):
for the policy terms. And then we worked out that
it had no capacity. Since that time to work has
been really unwell. We had a sleep apnea issue and
I sort of went through it and I said, can
you just give me your super statements? Do you reckon
you can dig them up for me? We worked out
that he had almost $500,000 worth of TPD cover to
claim on, and he was going to come to me
for a few hundred dollars of a refund. So we
(08:02):
stepped through the process. We served what's called a notice
of claim after I'd given him my legal advice about
how the policy would operate, we got the claim documents,
and we were eventually able to settle both claims for
$500,000 in circumstances where he thought he had no access
to any funds. And that's because it didn't matter that
his cover wasn't live in 2023, he'd lost the cover.
(08:25):
It matters whether you've got cover in force at the
date you last worked, and that's a really big misunderstanding.
I think about TPD and the way that it operates.
It's all about coverage in force at the date of disablement. Wow. Yeah.
S2 (08:38):
If you could think about one of the biggest challenges
that someone might have in accessing a claim like that,
what might that be?
S3 (08:48):
I think it's worth starting with ASIC's reports on this.
They describe the report as holes in the safety net
and what ASIC flagged for trustees and insurance companies was.
It had real concerns that the policies that were actually
devised and set up hadn't actually been designed to actually
benefit customers necessarily. Say, for example, if you've been a
(09:10):
casual employee, say you've been working somewhere between 10 and
15 hours a week and you've come in and out
of employment, depending on the type of policy you've got
and how it's been underwritten, there's only a few insurance
companies that underwrite these policies. You may or may not
be able to access your funds if you're part of
that casualized workforce. If you've made attempts at return to
(09:31):
work because you might be put on some policies, call
it limited cover. You can sort of be dragged across
from a full cover claim test, which would put you
onto what's called the any occupation test for TPD. That's
the good test. But if you can't establish full cover,
you'll get put on to what's called limited cover. Under
(09:51):
some policies, limited cover means you're not going to get
the benefit necessarily of just the any occupation test. You're
additionally going to need to establish that you can't perform
two of the five activities of daily living. So that's eating, transferring, dressing, showering, toileting,
those kinds of activities. Now Asec reports that can be
(10:12):
up to 75% of those claims don't get made out.
Really high rejection rates on claims that fall onto the
ADL activities. And so the last thing you really want
to do is to bring a claim without really understanding
the circumstances in which your claim might be at risk
and how you can best frame it in a way
(10:33):
so that you maximize your chance of being able to
meet the policy terms. Which often means, by the way,
just getting really good quality reports from treating doctors that
clarify your circumstances or can establish that you were actually
disabled at an earlier point, that the insurance company is
saying that you were disabled, because usually that timeline works,
that if you've made failed attempts at return to work,
(10:56):
that last date that you physically worked is probably when
you're doing the least hours. And that then flicks you
across into the ADL test, and all of a sudden
you're in the refusal territory. You'll get what's called a
procedural fairness letter, and you're flagged for refusal. So you
kind of want to set this up in a way
to get the legal advice early. It's really important. But
before you bring the claim that you really know what
(11:16):
you're up against and what the policy terms are actually
going to provide for you before you do it. And look,
for most people, unless you've had like a catastrophic injury.
And that does happen for some people. But for most people,
they have tried to make attempts at return to work,
and then they'll get to a point where either they'll
have done the second or third surgery, it's not working,
and it's looking pretty bad. And the doctors are saying,
(11:39):
we've really got some concerns. You're not safe to go
back into work or you're going to put yourself in
harm's way. At that point, people will say, oh, okay,
this is it for me. But ideally, you want to
be able to understand at an earlier point, what's the
consequence of me going back into the workplace when I
might be at risk of harming myself? And it potentially
(12:00):
puts my claim at risk? And it's I appreciate I'm
talking to someone that's running a rehab service. You've got
support here, and the whole objective is to get people
back on their feet, because people that have capacity to
work and can work, of course, should be working. And
so we're playing in that zone between work and not work.
My job is to work with people that do have
(12:22):
the medical disablement. I always say I've got a tape
of their claim, I'm of no use to you about
a taped claim unless we can firstly establish that you've
got a medical condition that disables you from employment. And
then can I go back to work? And if I
can't go back to work and do the job that
I was doing, which is based on your education, training
and experience, that looks like a TPD claim to me.
S2 (12:42):
What's really interesting is that the way that you're explaining
it is actually probably different to how I had been
thinking about it and what I'm hearing. So it could
be wrong. Is is that the whole idea is that
the attempts are made and you've discovered you just. It's
(13:03):
not possible. Yeah. Whereas I always, I guess, assumed that
you had to sit stagnant, not try anything at all,
and then that would be the best way to approach it.
But in fact, it's that idea of try because the
policies are here to help you when you can't, but
you actually, it's that evidence of trying which is very
(13:25):
similar to workers comp. It's the try a little bit.
Try a little bit. Yeah.
S3 (13:29):
Look, in fairness to insurance companies that are assessing this work,
once you frame a return to work, that is what's
described as a failed attempt to return to work, which
usually means, say you've tried for a few weeks or
a few months, like Judy's part time. Maybe you're doing
just a few hours a week. That sort of claim
and those circumstances are the types of circumstances an insurance
(13:53):
company will get it. It's kind of when you're going
into territory of going back to work that looks something
like what's called gainful employment. Say it's between 10 and
15 hours a week that you can run into some
difficult territory. It really does depend on the policy because
not every policy has these particular provisions, but it's certainly
(14:13):
within some policies, and it's there enough that it's worth
me having that conversation with my clients in every claim
to make sure that we can do the best that
we can to identify. Are you at that point? The
systems are actually complimentary. A worker's comp claim is often
run side by side with a TPD claim. There's no
science to it. It's probably workers comp will come up
(14:36):
first because with the tp'ed claim you need to have
six months, usually, um, of permanent unemployment, of incapacity to work,
to be able to commence those claims. So that's usually
sits a little bit behind a worker's comp claim. But
lots and lots of my client, clients and claims have
come in through that worker's comp process, and we'll just
pick up and work through. Okay. What are the reports showing?
(14:58):
What's the permanent disablement? What's the whole person incapacity assessment
looking like? Once you start seeing, you know, percentages of
around 15% and above, that's starting to look like a
permanent incapacity. Not to say that you can't succeed on
a claim with a whole person. Impairment less than that.
Because TPD is a no fault system. Worker's Comp is
(15:21):
identifying the employer's contribution to a person's disablement. TPD doesn't matter.
You can have a workplace injury plus a pre-existing condition.
That's got nothing to do with your workplace. My job
is to frame the physical and the psychological. Put a
circle around the whole thing, and present a person who's
(15:42):
been disabled. It's not a claim number. I'm really making
sure the claims manager understands who my person is, who's
my client, so that they can really understand the circumstances
in which they have made a good faith attempt at
return to work. Like they're really important circumstances that you
can get across makes a big difference on the claim. Yeah.
S2 (16:02):
Would you suggest to wait until you've had a whole
person impairment assessment before starting a TPD claim?
S3 (16:10):
Well, look, it would kind of depend on the particular
circumstances of your medical condition. And so if it was
clear to me on a claim that I had a
client who had been disabled and hadn't had capacity to
work for, say it was 18 months, whether or not
that person had been whole person impairment assessed, which means
(16:31):
that there's been a recognition that the injury has stabilized
for that purpose, for worker's comp purposes, that they can
then do that assessment and come up with that percentage.
I don't necessarily need to see that because it's not
the assessment that takes place for TPD, so long as
we can see a continuum of disablement due to injury
(16:53):
or illness that causes the person to leave work solely
due to that condition and then an ongoing period of disablement.
If I've got two treating doctors that support that claim,
I'm good usually, and we can go. So I can
say that's the sort of general response. I don't want
anyone to feel that I'm giving them personal advice about
(17:14):
their claim that when we talk today, because it's really important,
there can be some nuances in it, all of these things.
So I would need to want to work through some
particular circumstances to be able to give someone specific legal
advice about a claim.
S2 (17:26):
So do you have to declare it on your tax return?
I've been told by solicitor, no, but that sounds really weird.
And is it taxable if you're.
S3 (17:34):
Under preservation age? And it depends on what year you're born,
if you go, if you just sort of Google preservation
Age ATO, it will give you the table. If someone's born.
I think it's up to 1964. There's a sliding scale
of when you can access your zipper without paying tax
on it. Um, and so once you meet Preservation Age,
you're not paying tax if you draw down the money
from your super. But if you're under preservation age, yeah,
(17:57):
you are paying tax. And so any tax that's being
paid has been withheld at the point that you take
that money out. Right. So if you've taken the money
out of your super, you've already paid the tax on it.
So what that means is that at the point that
you've taken your money out, the trustees meant to give
you a pay statement. You give that to your accountant.
(18:19):
In fact, what it represents is often a tax claimable
about up to two and 2300 for that tax year.
So it's actually I think it can potentially give rise
to a tax return that it allows you to get
some money back in. So yeah it's already been taken out.
There's no trustee that's going to allow you to withdraw
money without doing the job that they want to do
(18:42):
for the tax office, which is they're taking that money
out before you touch it. So, so after.
S2 (18:47):
Preservation Age, it's not taxable, but you can do a return.
Is that what you said.
S3 (18:52):
After Preservation Age if you're not working. Yeah. Right okay.
S2 (18:56):
Okay. Thank you. Yeah I'm just going to ask this question.
Is it possible that someone can be under covered under TPD?
This person was told they've got a default cover and
do not have any coverage. However, I don't know if
that's true.
S3 (19:11):
So default cover just means it's defaulted without you choosing it, right?
You didn't choose to get the cover. You've got it
because you're a member of this Superfund.
S4 (19:20):
And.
S3 (19:20):
This Superfund actually has an obligation to actually get that
cover for you on your behalf. So you've got it
because you were a member of the fund. You can
opt out of it. There are some funds that say
that they don't need to offer TPD cover because they
offer in substitution. I'm not sure if this is right,
but they offer income protection as their default cover. Now
(19:43):
for my mind, they're quite different products and they do
different things. Income protection is an income replacement policy where
you can't work due to injury or illness, and it
sort of looks and feels a bit more like worker's comp.
And those two sort of systems run more side by side.
But TPD is that one off lump sum benefit that
gets paid at the point that you permanently can't work
(20:04):
due to injury or illness. And by the way, you
can have more than one TPD policy, right? So if
at the date you last worked you had two super
funds and two TPD covers, unless there's an exclusion clause
that says that you can't claim of one of them,
in theory you can claim for more than one cover,
and I certainly done that for clients. You can claim
more than one. You can't do that for income protection. Yeah,
(20:27):
that's an indemnity policy.
S2 (20:28):
Any other question?
S5 (20:30):
Hi. Um, I initially did see, uh, a lawyer and
the way they presented it to me, or the actual words,
was that they were going to try and get me
an early super. I was 59 at that time. Mhm.
I didn't have long to my preservation age. Yes. I
got some financial advice and they said well don't take
(20:51):
your super out early because you're going to be charged interest.
I knock that back. It was never presented to me like,
like you have as a separate insurance mate.
S3 (21:01):
It's, um, it's certainly worth checking it. So it's this
is a good practical example for people. What you would
want to do is to identify, firstly, the date that
you last worked mate, and then look at your statement
at that date and then at that date, if that
date that you last worked in, in what's called gainful employment,
(21:22):
was the date that you had, um, TPD coverage, insurance coverage,
then you would potentially still be eligible to make that claim, mate.
So yeah, absolutely. That's that's available to you. If there
was insurance coverage at the date that you last worked
in gainful employment, from my perspective, I would be saying
to my client, show me your super statement. Let's have
(21:42):
a look. Let's see if we can work out what
insurance coverage you had. So even if you took out
that super money after you became disabled and there was
you had a zero balance like my client, you would
still be able to bring that as a TPD claim
if there was insurance in there at the date of disablement.
Does that help?
S5 (22:01):
Yes, thanks.
S3 (22:03):
The other side of that TPD claim includes that at
some point there's an assessment done, which is whether you've
got capacity to do a role based on your education
training experience. So if you need to retrain and the
retrain is outside of your education training experience, you're usually
(22:23):
pretty good. And that should be okay to bring that claim,
because what you're demonstrating for the insurance company is that
you didn't have capacity to continue in your line of employment,
and that you did need to basically give up your
whole career and start again.
S2 (22:39):
There's a fear in even trying. And so knowing that
it's okay to try something completely different actually doesn't stop
that movement forward. It doesn't stop you wanting to put
that claim in. It doesn't stop you going out and
participating in something that you enjoy, because it isn't what
(23:00):
you used to do. And that's where that link comes from.
S3 (23:03):
There is an argument to say that someone who's like
a truck driver that then has to drive buses, and
maybe it's not as well paid, maybe you don't need
as many qualifications, maybe it's a different licensing requirement, but
if it's similar but not of the same quality, there's
an argument to say that that's within your education training experience.
(23:24):
So I would just insert into that thinking it's worth
having the conversation at that transition point where they're looking
at that move and the pivot. What would it mean
if I was thinking of doing X? That's right. Just
to be sure.
S2 (23:39):
But if you're a truck driver and then you decide
that you would like to try floristry.
S3 (23:45):
100%, you've abandoned that career. Yeah. You've taken steps to
get to get to that point in your career that
you've now had to give up because of your medical condition. 100%.
If you need to retrain, that usually looks like a
potential claim for TPD. Yeah, I would agree. Yeah.
S2 (24:02):
How much does it cost to have.
S6 (24:05):
Someone prepare and lodge the claim on your behalf?
S3 (24:08):
Yeah. So if I look, if I'm doing a simple
claim for TPD, my average cost or charge is about
$7,500 plus GST plus disbursements. And the disbursements can be look,
we want to get two treating doctors to support the claim. Um,
and that means filling in the medical attendant statement the
form most claims don't need an expert report. And those
(24:32):
reports as you know, are pretty expensive. Most claims like
95 out of 100, don't need them. Every now and
again you get a special claim and you need to
get a consultant occupational therapist to do an activities of
daily living assessment. They're expensive reports to get. Sometimes your
leader consultant psychiatrist to do a report because you haven't
got the medical evidence to establish at the date the
(24:54):
person last worked. Maybe that person was so unwell that
they actually weren't seeing doctors at the time. And you
need to sort of take a look back and say, yeah,
they weren't working because they were really unwell. And then
you've got the medical support because the independent medical assessment says, yeah,
but they still left work because of due to injury
or illness. I'm pretty risk averse on my claims, but
(25:16):
at the same time, I will always check with my
clients about whether we'd go ahead with those sorts of
things during the course of the claim. And so for
a simple claim, yeah, about 7500 plus GST.
S6 (25:28):
Can I just ask to why does it reduce so
dramatically past the age of 60. Like it really nosedives.
S3 (25:36):
Yeah. Not everyone's got that coverage. As in that diminishes
as in some people have what's called fixed cover. But
often to get fixed cover you've done some sort of
health questionnaire assessment. It's basically an insurance application. And so
the insurance company will want to underwrite you according to
your particular health circumstances. So the numbers go down. But
(25:57):
the the amounts differ wildly depending on the SIPA trustee
and the insurer. Right. But I agree the numbers do
go down as you get closer to retirement age, so
it's absolutely worth checking it. And at the end of
each claim, right. I'll always get the insurance company to
confirm for me what that date is. That, they say
is the date of disablement. And I've had a few
(26:18):
fights with insurance companies because the later that date is,
the less that amount looks like. And I've run a
few cases where we've had to challenge on that date
of disablement because they've just got it wrong, in my view.
I'll do that. I always check.
S2 (26:30):
That once you've received a TPD and feel like you're
well enough to travel, or over time you feel that
you can do more. Does that affect the ruling?
S3 (26:41):
Well, the first thing to say about TPD is that
it's like insurance and everything that has the word insurance
next to it comes under the tenure of what's called
the duty of utmost good faith. And so in Australia
we've got a special requirement. We've got the Insurance Contracts
Act that sets up the hallmarks of the insurance relationship
(27:02):
between the insurer and the insured. Based on this duty
of utmost good faith, it exists right before you commence
any form of coverage. When you give your duty of disclosure,
you know the health questionnaire side of things. It runs
all the way through a claim, and it even runs
to the end of a claim after you've got your money.
So this duty, which generally speaking, is not a concept
(27:24):
in contract law, most contracts are transactional and that only
exists for the purposes of that transaction. Life insurance and
life insurance have this special concept of utmost good faith.
So I would always encourage a client who is thinking
about running a claim and who's received money in relation
to TPD, to be conscious and aware of the fact
(27:45):
that this duty survives the claim, and that it's part
of the hallmark of a TPD claim, is that you
are so physically disabled that you don't have any capacity,
according to education training experience. Does that mean that you
could never do anything that involves something like going overseas? Well, no,
that can't be right per se. Subject to what I
(28:06):
just said about the tenure of what TPD is about.
So the context is always about disablement from employment due
to injury or illness. And so I'm always very cautious
and always say to my clients, just be careful. You know,
the circumstances about this payments are one off lump sum payments.
There is examples and I'm not saying this is one
of them, but there are examples of where the insurance
(28:29):
company has identified a lack of utmost good faith. There
is a legal basis to potentially claim back that money.
I don't mean to scare people, but I just mean
to explain. Insurance is a bit spesh in that respect,
and people just need to be aware about that when
they think about making a claim during a claim and
even after a claim.
S2 (28:47):
Yes. Let's open the floor to questions.
S6 (28:52):
I do thank you just on that good faith declaration
or whatever it is, once a lump sum payment has
come through with a psychological injury, how can they prove
otherwise that if there's been any improvement, or how do
they hold those accountable for that with a psychological injury?
Every day is a different day from a mood, perspective,
a depression, anxiety, all those sorts of different things.
S3 (29:15):
Yeah, I hope I didn't overstate the point. It wasn't
my intention in the question to give more than what
really represents to be an assessment. All it is, it's
an assessment based on the policy terms, according to what
we've described as that framework. So long as that's been
met and there's good faith in that claim. That is
(29:37):
the that is the nature of TPD. That's what it's
all about. There are guardrails to what this is about
and the circumstances that potentially could be investigated. I guess
the way that I like to think about it, though,
is if we're doing the right thing right, we've got
a good faith claim, circumstances that are about disablement, it's
not going to come up if something happens that relates
(30:00):
at a later point to say something like, you're needing
to retrain and and to get back into employment in
another capacity on medical advice, that's still good faith. It's
not inconsistent with the nature of TPD.
S2 (30:16):
Any other advice on how to best personally inform ourselves
on our policy?
S3 (30:21):
Look, if you're having a go at trying to understand
your own claim, you're not going to get the policy
online necessarily. Because unless you've just become disabled and you're
reading the current product disclosure statement, you probably haven't got
the version of the policy that applied at your date
(30:41):
of disablement. So if you're thinking of making a claim,
the best way to think about it is to get
legal advice before you do that. If you've got a
claim that's on foot, your solicitor, or you could ask
the insurance company or the super fund for a copy
of your policy and you can read up on it,
but you won't get a copy of the policy online
(31:03):
because those policies change all the time. I mean, if
you want to cut through, what I would be suggesting
you do is just ask a claims manager for a
copy of the policy. You're absolutely entitled to do that.
If you think that they're going down a path that
doesn't feel like it's on policy terms, you might ask
them to refer to the policy, the clause that they're
(31:24):
referring to, so you can have a look at it
and check. And equally, at that point, that's a good
time to get legal advice as well about that. I
always say trust your gut. Like if it doesn't feel
right in terms of a claim assessment, people instinctively are
usually pretty good at calling out what's called fair dealing
or fairness in a claim assessment. So trust your instincts.
(31:44):
If it doesn't feel right, absolutely. Ask questions. Take legal.
S4 (31:48):
Advice.
S3 (31:49):
Step back from it before you offer the next set
of information responses. As an example, I had one claim
that was recently settled where the claims manager gave me
the wrong policy, asked the wrong questions with the wrong
information about the wrong date of disablement, and the claim
would have been knocked out probably 3 or 4 times
on wrong information sets. And I just kept going back
(32:11):
and saying, can you please give me that term, show
me where it is in the policy that says why? Why?
You're asking a question that goes back to 1998. Like,
just show me how that relates to this coverage. And
I ended up speaking to the senior claims manager, and
that claim was approved within seven days. And that's because
the person who was assessing the claim had some challenges
(32:31):
in understanding how that policy was being applied. Now, that's
a little bit unusual. It doesn't happen very often, but
it would happen often enough for me to feel like
it's always worth checking that one.
S2 (32:41):
We have run out of time today, but I love
how many people have actually joined in. It's nice to
see a big crowd. David, thank you so much for
coming today. It's been a real pleasure and I think
it's really helped open up everybody's mind as to not
only the complexity, the need for getting good legal advice,
and also that one way of being able to recover
(33:06):
from an injury is actually really complex, but there is
a lot of support that is available. And again, get
some good advice.
S3 (33:14):
Thanks, Caroline. It's my pleasure. And yes, I agree, it's
definitely worth it to get the advice at the right
time so that you can make an informed choice about
what you'd like to do and how you can step
into the next part of your life.
S2 (33:27):
Thank you, thank you.
S1 (33:28):
Well, you've been listening. You may have found some of
these concepts challenging. If you are needing help, please reach out.
For more information, you can follow us on our socials
or if you require urgent support, please reach out to
the police or the ambulance on 000 lifeline on 13 1114.
That's 13 1114 Beyondblue on 1300 224 636. That's one 1300 224 636. The
(33:57):
24 hour mental health access line, which is one 800 0151.
That's one 800 0151. And if you think you could
benefit from some legal advice, reach out to the Iro.
Who could recommend some lawyers or someone to help you
with your current legal case. Thank you for joining us
and we'll be back next time.
Hello and welcome to the My Social Support Network podcast,
a series to guide you along the path to recovery
while on workers compensation. In this series, we will answer
questions from you and provide information from experts and people
with lived experience currently going through worker's compensation and those
who have made their way to the other side. Through
these interactions, we'll be giving you tools, advice, but most importantly,
(00:24):
encouragement on what can be a stressful time when you're
also recovering from an injury sustained in your workplace. The
information contained in today's episode has been provided as general
advice only. The program has been prepared without taking account
of your objectives, financial situation or needs. You should before
you make any decision regarding any information, strategy or products mentioned,
(00:45):
consult your own financial advisor to advise whether that is
appropriate having regard to your own objectives, financial situation and
the needs.
S2 (00:53):
Today we have David Khoury from Carolyn O'Dea lawyers with us,
and we're really excited to be able to have this discussion,
because today we're going to be talking about total and
permanent disability claims. David, can you tell us a little
bit about how you ended up where you are in
the world of total and permanent disability?
S3 (01:13):
So my background is actually that I worked in the
community sector for almost 20 years. I was 16 years
working at Legal Aid, um, working in consumer law, uh,
and helping clients who were often in vulnerable situations with
financial service disputes. And I worked there in the city office,
and I also did some work, um, up in the
(01:34):
mid-north coast, working with First Nations communities. I love the work.
It was a great job, but it led to another challenge,
which was the opportunity to work for the Ombudsman Service,
Financial Ombudsman Service as an ombudsman there. And then in
the last three years, I've come across the Carolina Way
to work in an area that I was working in
at Legal Aid as part of my role heading up
(01:55):
the Consumer Law team in TPD work. I really like it.
I think it's an area that sort of touches on
some really challenging issues for vulnerable clients, including how do
you access a financial service product that's actually been set
up to help you? TPD often not really that easy
to access it. It's a real access to justice issues,
(02:16):
and ASIC has flagged those in more than 2 or
3 reports. It's really been concerned with the level of
challenges and the barriers that exist in this area. I
like helping vulnerable clients, but I also like getting people
their cash, and I think it's an area where people
don't realize an average claim is worth $140,000. It's a
lot of money. Unless you access it, you're not going
(02:37):
to get that money. You have to be able to
step into this.
S2 (02:40):
David, can you explain what TPD is?
S3 (02:43):
Um, okay. So TPD stands for total and permanent disablement
and it's a form of life insurance. And it sits
within often sits within people's superannuation. But it could actually
be a standalone retail product that you go out and
purchase in the marketplace. So okay, so it can sit
within super. And when it does, the only way that
(03:04):
you can access that is to make a claim through
your super fund for access to the insurance benefit. So
it's not your super component. It's a separate claim amount
the closer you get to retirement age, by the time
someone's getting into their mid late 50s early 60s those
policies start to the numbers start to go down. It's
(03:26):
an amount of money that's meant to represent early retirement.
It's meant to be a replacement. And the way that
I like to think of TPD is ASIC framed it
as holes in the safety net. Well, that safety net
is a public and private safety net right for all Australians.
So it is an insurance product. It does sit mostly
within super. It's a policy that's set up to help
people at the time. They can't work.
S2 (03:48):
There are so many questions.
S3 (03:49):
There's lots of questions.
S2 (03:50):
There's lots of questions.
S3 (03:52):
What about that one about pensions? Can it affect your pension.
It makes sense that the government system. So Centrelink disability
support pension is complimentary to this system. If anyone at
Centrelink is suggesting that you're not eligible for the DSP
because you're getting a TPD benefit, they have misunderstood the
legislation that they're working under. It is not correct. It
(04:14):
does not make you ineligible to claim for a disability
support pension to be claiming for TPD. It can be
that if you receive a TPD benefit and you're on
a Centrelink payment, there can be a preclusion period that
is applied depending on the amount that you're receiving. But
the way to really ensure that Centrelink understands that is
you should say to Centrelink, I have an early access
(04:37):
to super payment, if they understand it as an early
access to super payment in brackets. It's not compensation because
they try to lump it in as being a personal
injury compensation claim. It's not that, not at all. And
so if you get anyone at Centrelink saying that they've
given you the wrong assessment and you should certainly raise
that with Centrelink.
S2 (04:57):
How would someone know that they have access to this?
S3 (05:02):
The starting point really is TPD and super. The origins
of it was in terms of the default product, which
is what most Australians have actually got its default because
the super trustees actually went out into the marketplace in
the late 90s and early 2000 to set up what's
called group life insurance. So the trustees got the tick
(05:22):
of approval from APRA, the regulator, to go out and
offer a product that helps people who need to actually
access early retirement funds. So it's a product that's set
up to do that. The way that it was set up,
because it was coming out of your super, it's a
default product, which means that you didn't necessarily choose it.
It was there and it's sitting in your account. The
premiums have been taken out, but because it's sort of
(05:44):
sitting in your Superfund and no one really looks at
their super statement, most people don't even know that this
money is available to them if they're disabled and if
they can access the policy terms. So the way to
really access a super claim and a TPD claim is
to look at the circumstances in which you've become disabled
and work out whether you had insurance coverage at that date.
(06:05):
That's kind of the magic formula to TPD. You need
to have insurance coverage at what's called date of disablement.
They're not immediately obvious what those two things are because
it can sometimes be difficult to work out. Did you
have cover and what is actually your date of disablement?
Because it may not necessarily be the last physical date
that you worked. It could be an earlier date than that.
(06:26):
And often in in my experience, earlier dates are usually safer.
TPD claims to make.
S2 (06:33):
It's really interesting you say that because one of the
things when someone has a worker's compensation claim that does
not get paid in New South Wales, but does in Victoria,
is super. And so what can happen is that they
don't know that they've got access to TPD, the scheme
isn't paying super and then all of a sudden their
(06:56):
access to these claims goes, yeah.
S3 (06:59):
Look, it is a tricky area. And because zip is
one of those areas that sort of it sits in
the background, I think we've probably got one of the
best financial service safety nets of anywhere in the world.
Like it's an amazing system. If I can give you
an example, it might be the easiest way to sort
of explain it. I had one client come to me
and he was really peeved that he'd been paying these
(07:20):
insurance premiums on his policy, because he hadn't worked since
2009 when he came to see me. It was 2023.
And he said, Dave, I've been paying all of this
money for this insurance coverage. That's worth nothing to me.
We went through some questions. We worked out that he'd
last worked in 2009. We worked out that he'd been sick,
ill or injured at that date, which is a trigger
(07:41):
for the policy terms. And then we worked out that
it had no capacity. Since that time to work has
been really unwell. We had a sleep apnea issue and
I sort of went through it and I said, can
you just give me your super statements? Do you reckon
you can dig them up for me? We worked out
that he had almost $500,000 worth of TPD cover to
claim on, and he was going to come to me
for a few hundred dollars of a refund. So we
(08:02):
stepped through the process. We served what's called a notice
of claim after I'd given him my legal advice about
how the policy would operate, we got the claim documents,
and we were eventually able to settle both claims for
$500,000 in circumstances where he thought he had no access
to any funds. And that's because it didn't matter that
his cover wasn't live in 2023, he'd lost the cover.
(08:25):
It matters whether you've got cover in force at the
date you last worked, and that's a really big misunderstanding.
I think about TPD and the way that it operates.
It's all about coverage in force at the date of disablement. Wow. Yeah.
S2 (08:38):
If you could think about one of the biggest challenges
that someone might have in accessing a claim like that,
what might that be?
S3 (08:48):
I think it's worth starting with ASIC's reports on this.
They describe the report as holes in the safety net
and what ASIC flagged for trustees and insurance companies was.
It had real concerns that the policies that were actually
devised and set up hadn't actually been designed to actually
benefit customers necessarily. Say, for example, if you've been a
(09:10):
casual employee, say you've been working somewhere between 10 and
15 hours a week and you've come in and out
of employment, depending on the type of policy you've got
and how it's been underwritten, there's only a few insurance
companies that underwrite these policies. You may or may not
be able to access your funds if you're part of
that casualized workforce. If you've made attempts at return to
(09:31):
work because you might be put on some policies, call
it limited cover. You can sort of be dragged across
from a full cover claim test, which would put you
onto what's called the any occupation test for TPD. That's
the good test. But if you can't establish full cover,
you'll get put on to what's called limited cover. Under
(09:51):
some policies, limited cover means you're not going to get
the benefit necessarily of just the any occupation test. You're
additionally going to need to establish that you can't perform
two of the five activities of daily living. So that's eating, transferring, dressing, showering, toileting,
those kinds of activities. Now Asec reports that can be
(10:12):
up to 75% of those claims don't get made out.
Really high rejection rates on claims that fall onto the
ADL activities. And so the last thing you really want
to do is to bring a claim without really understanding
the circumstances in which your claim might be at risk
and how you can best frame it in a way
(10:33):
so that you maximize your chance of being able to
meet the policy terms. Which often means, by the way,
just getting really good quality reports from treating doctors that
clarify your circumstances or can establish that you were actually
disabled at an earlier point, that the insurance company is
saying that you were disabled, because usually that timeline works,
that if you've made failed attempts at return to work,
(10:56):
that last date that you physically worked is probably when
you're doing the least hours. And that then flicks you
across into the ADL test, and all of a sudden
you're in the refusal territory. You'll get what's called a
procedural fairness letter, and you're flagged for refusal. So you
kind of want to set this up in a way
to get the legal advice early. It's really important. But
before you bring the claim that you really know what
(11:16):
you're up against and what the policy terms are actually
going to provide for you before you do it. And look,
for most people, unless you've had like a catastrophic injury.
And that does happen for some people. But for most people,
they have tried to make attempts at return to work,
and then they'll get to a point where either they'll
have done the second or third surgery, it's not working,
and it's looking pretty bad. And the doctors are saying,
(11:39):
we've really got some concerns. You're not safe to go
back into work or you're going to put yourself in
harm's way. At that point, people will say, oh, okay,
this is it for me. But ideally, you want to
be able to understand at an earlier point, what's the
consequence of me going back into the workplace when I
might be at risk of harming myself? And it potentially
(12:00):
puts my claim at risk? And it's I appreciate I'm
talking to someone that's running a rehab service. You've got
support here, and the whole objective is to get people
back on their feet, because people that have capacity to
work and can work, of course, should be working. And
so we're playing in that zone between work and not work.
My job is to work with people that do have
(12:22):
the medical disablement. I always say I've got a tape
of their claim, I'm of no use to you about
a taped claim unless we can firstly establish that you've
got a medical condition that disables you from employment. And
then can I go back to work? And if I
can't go back to work and do the job that
I was doing, which is based on your education, training
and experience, that looks like a TPD claim to me.
S2 (12:42):
What's really interesting is that the way that you're explaining
it is actually probably different to how I had been
thinking about it and what I'm hearing. So it could
be wrong. Is is that the whole idea is that
the attempts are made and you've discovered you just. It's
(13:03):
not possible. Yeah. Whereas I always, I guess, assumed that
you had to sit stagnant, not try anything at all,
and then that would be the best way to approach it.
But in fact, it's that idea of try because the
policies are here to help you when you can't, but
you actually, it's that evidence of trying which is very
(13:25):
similar to workers comp. It's the try a little bit.
Try a little bit. Yeah.
S3 (13:29):
Look, in fairness to insurance companies that are assessing this work,
once you frame a return to work, that is what's
described as a failed attempt to return to work, which
usually means, say you've tried for a few weeks or
a few months, like Judy's part time. Maybe you're doing
just a few hours a week. That sort of claim
and those circumstances are the types of circumstances an insurance
(13:53):
company will get it. It's kind of when you're going
into territory of going back to work that looks something
like what's called gainful employment. Say it's between 10 and
15 hours a week that you can run into some
difficult territory. It really does depend on the policy because
not every policy has these particular provisions, but it's certainly
(14:13):
within some policies, and it's there enough that it's worth
me having that conversation with my clients in every claim
to make sure that we can do the best that
we can to identify. Are you at that point? The
systems are actually complimentary. A worker's comp claim is often
run side by side with a TPD claim. There's no
science to it. It's probably workers comp will come up
(14:36):
first because with the tp'ed claim you need to have
six months, usually, um, of permanent unemployment, of incapacity to work,
to be able to commence those claims. So that's usually
sits a little bit behind a worker's comp claim. But
lots and lots of my client, clients and claims have
come in through that worker's comp process, and we'll just
pick up and work through. Okay. What are the reports showing?
(14:58):
What's the permanent disablement? What's the whole person incapacity assessment
looking like? Once you start seeing, you know, percentages of
around 15% and above, that's starting to look like a
permanent incapacity. Not to say that you can't succeed on
a claim with a whole person. Impairment less than that.
Because TPD is a no fault system. Worker's Comp is
(15:21):
identifying the employer's contribution to a person's disablement. TPD doesn't matter.
You can have a workplace injury plus a pre-existing condition.
That's got nothing to do with your workplace. My job
is to frame the physical and the psychological. Put a
circle around the whole thing, and present a person who's
(15:42):
been disabled. It's not a claim number. I'm really making
sure the claims manager understands who my person is, who's
my client, so that they can really understand the circumstances
in which they have made a good faith attempt at
return to work. Like they're really important circumstances that you
can get across makes a big difference on the claim. Yeah.
S2 (16:02):
Would you suggest to wait until you've had a whole
person impairment assessment before starting a TPD claim?
S3 (16:10):
Well, look, it would kind of depend on the particular
circumstances of your medical condition. And so if it was
clear to me on a claim that I had a
client who had been disabled and hadn't had capacity to
work for, say it was 18 months, whether or not
that person had been whole person impairment assessed, which means
(16:31):
that there's been a recognition that the injury has stabilized
for that purpose, for worker's comp purposes, that they can
then do that assessment and come up with that percentage.
I don't necessarily need to see that because it's not
the assessment that takes place for TPD, so long as
we can see a continuum of disablement due to injury
(16:53):
or illness that causes the person to leave work solely
due to that condition and then an ongoing period of disablement.
If I've got two treating doctors that support that claim,
I'm good usually, and we can go. So I can
say that's the sort of general response. I don't want
anyone to feel that I'm giving them personal advice about
(17:14):
their claim that when we talk today, because it's really important,
there can be some nuances in it, all of these things.
So I would need to want to work through some
particular circumstances to be able to give someone specific legal
advice about a claim.
S2 (17:26):
So do you have to declare it on your tax return?
I've been told by solicitor, no, but that sounds really weird.
And is it taxable if you're.
S3 (17:34):
Under preservation age? And it depends on what year you're born,
if you go, if you just sort of Google preservation
Age ATO, it will give you the table. If someone's born.
I think it's up to 1964. There's a sliding scale
of when you can access your zipper without paying tax
on it. Um, and so once you meet Preservation Age,
you're not paying tax if you draw down the money
from your super. But if you're under preservation age, yeah,
(17:57):
you are paying tax. And so any tax that's being
paid has been withheld at the point that you take
that money out. Right. So if you've taken the money
out of your super, you've already paid the tax on it.
So what that means is that at the point that
you've taken your money out, the trustees meant to give
you a pay statement. You give that to your accountant.
(18:19):
In fact, what it represents is often a tax claimable
about up to two and 2300 for that tax year.
So it's actually I think it can potentially give rise
to a tax return that it allows you to get
some money back in. So yeah it's already been taken out.
There's no trustee that's going to allow you to withdraw
money without doing the job that they want to do
(18:42):
for the tax office, which is they're taking that money
out before you touch it. So, so after.
S2 (18:47):
Preservation Age, it's not taxable, but you can do a return.
Is that what you said.
S3 (18:52):
After Preservation Age if you're not working. Yeah. Right okay.
S2 (18:56):
Okay. Thank you. Yeah I'm just going to ask this question.
Is it possible that someone can be under covered under TPD?
This person was told they've got a default cover and
do not have any coverage. However, I don't know if
that's true.
S3 (19:11):
So default cover just means it's defaulted without you choosing it, right?
You didn't choose to get the cover. You've got it
because you're a member of this Superfund.
S4 (19:20):
And.
S3 (19:20):
This Superfund actually has an obligation to actually get that
cover for you on your behalf. So you've got it
because you were a member of the fund. You can
opt out of it. There are some funds that say
that they don't need to offer TPD cover because they
offer in substitution. I'm not sure if this is right,
but they offer income protection as their default cover. Now
(19:43):
for my mind, they're quite different products and they do
different things. Income protection is an income replacement policy where
you can't work due to injury or illness, and it
sort of looks and feels a bit more like worker's comp.
And those two sort of systems run more side by side.
But TPD is that one off lump sum benefit that
gets paid at the point that you permanently can't work
(20:04):
due to injury or illness. And by the way, you
can have more than one TPD policy, right? So if
at the date you last worked you had two super
funds and two TPD covers, unless there's an exclusion clause
that says that you can't claim of one of them,
in theory you can claim for more than one cover,
and I certainly done that for clients. You can claim
more than one. You can't do that for income protection. Yeah,
(20:27):
that's an indemnity policy.
S2 (20:28):
Any other question?
S5 (20:30):
Hi. Um, I initially did see, uh, a lawyer and
the way they presented it to me, or the actual words,
was that they were going to try and get me
an early super. I was 59 at that time. Mhm.
I didn't have long to my preservation age. Yes. I
got some financial advice and they said well don't take
(20:51):
your super out early because you're going to be charged interest.
I knock that back. It was never presented to me like,
like you have as a separate insurance mate.
S3 (21:01):
It's, um, it's certainly worth checking it. So it's this
is a good practical example for people. What you would
want to do is to identify, firstly, the date that
you last worked mate, and then look at your statement
at that date and then at that date, if that
date that you last worked in, in what's called gainful employment,
(21:22):
was the date that you had, um, TPD coverage, insurance coverage,
then you would potentially still be eligible to make that claim, mate.
So yeah, absolutely. That's that's available to you. If there
was insurance coverage at the date that you last worked
in gainful employment, from my perspective, I would be saying
to my client, show me your super statement. Let's have
(21:42):
a look. Let's see if we can work out what
insurance coverage you had. So even if you took out
that super money after you became disabled and there was
you had a zero balance like my client, you would
still be able to bring that as a TPD claim
if there was insurance in there at the date of disablement.
Does that help?
S5 (22:01):
Yes, thanks.
S3 (22:03):
The other side of that TPD claim includes that at
some point there's an assessment done, which is whether you've
got capacity to do a role based on your education
training experience. So if you need to retrain and the
retrain is outside of your education training experience, you're usually
(22:23):
pretty good. And that should be okay to bring that claim,
because what you're demonstrating for the insurance company is that
you didn't have capacity to continue in your line of employment,
and that you did need to basically give up your
whole career and start again.
S2 (22:39):
There's a fear in even trying. And so knowing that
it's okay to try something completely different actually doesn't stop
that movement forward. It doesn't stop you wanting to put
that claim in. It doesn't stop you going out and
participating in something that you enjoy, because it isn't what
(23:00):
you used to do. And that's where that link comes from.
S3 (23:03):
There is an argument to say that someone who's like
a truck driver that then has to drive buses, and
maybe it's not as well paid, maybe you don't need
as many qualifications, maybe it's a different licensing requirement, but
if it's similar but not of the same quality, there's
an argument to say that that's within your education training experience.
(23:24):
So I would just insert into that thinking it's worth
having the conversation at that transition point where they're looking
at that move and the pivot. What would it mean
if I was thinking of doing X? That's right. Just
to be sure.
S2 (23:39):
But if you're a truck driver and then you decide
that you would like to try floristry.
S3 (23:45):
100%, you've abandoned that career. Yeah. You've taken steps to
get to get to that point in your career that
you've now had to give up because of your medical condition. 100%.
If you need to retrain, that usually looks like a
potential claim for TPD. Yeah, I would agree. Yeah.
S2 (24:02):
How much does it cost to have.
S6 (24:05):
Someone prepare and lodge the claim on your behalf?
S3 (24:08):
Yeah. So if I look, if I'm doing a simple
claim for TPD, my average cost or charge is about
$7,500 plus GST plus disbursements. And the disbursements can be look,
we want to get two treating doctors to support the claim. Um,
and that means filling in the medical attendant statement the
form most claims don't need an expert report. And those
(24:32):
reports as you know, are pretty expensive. Most claims like
95 out of 100, don't need them. Every now and
again you get a special claim and you need to
get a consultant occupational therapist to do an activities of
daily living assessment. They're expensive reports to get. Sometimes your
leader consultant psychiatrist to do a report because you haven't
got the medical evidence to establish at the date the
(24:54):
person last worked. Maybe that person was so unwell that
they actually weren't seeing doctors at the time. And you
need to sort of take a look back and say, yeah,
they weren't working because they were really unwell. And then
you've got the medical support because the independent medical assessment says, yeah,
but they still left work because of due to injury
or illness. I'm pretty risk averse on my claims, but
(25:16):
at the same time, I will always check with my
clients about whether we'd go ahead with those sorts of
things during the course of the claim. And so for
a simple claim, yeah, about 7500 plus GST.
S6 (25:28):
Can I just ask to why does it reduce so
dramatically past the age of 60. Like it really nosedives.
S3 (25:36):
Yeah. Not everyone's got that coverage. As in that diminishes
as in some people have what's called fixed cover. But
often to get fixed cover you've done some sort of
health questionnaire assessment. It's basically an insurance application. And so
the insurance company will want to underwrite you according to
your particular health circumstances. So the numbers go down. But
(25:57):
the the amounts differ wildly depending on the SIPA trustee
and the insurer. Right. But I agree the numbers do
go down as you get closer to retirement age, so
it's absolutely worth checking it. And at the end of
each claim, right. I'll always get the insurance company to
confirm for me what that date is. That, they say
is the date of disablement. And I've had a few
(26:18):
fights with insurance companies because the later that date is,
the less that amount looks like. And I've run a
few cases where we've had to challenge on that date
of disablement because they've just got it wrong, in my view.
I'll do that. I always check.
S2 (26:30):
That once you've received a TPD and feel like you're
well enough to travel, or over time you feel that
you can do more. Does that affect the ruling?
S3 (26:41):
Well, the first thing to say about TPD is that
it's like insurance and everything that has the word insurance
next to it comes under the tenure of what's called
the duty of utmost good faith. And so in Australia
we've got a special requirement. We've got the Insurance Contracts
Act that sets up the hallmarks of the insurance relationship
(27:02):
between the insurer and the insured. Based on this duty
of utmost good faith, it exists right before you commence
any form of coverage. When you give your duty of disclosure,
you know the health questionnaire side of things. It runs
all the way through a claim, and it even runs
to the end of a claim after you've got your money.
So this duty, which generally speaking, is not a concept
(27:24):
in contract law, most contracts are transactional and that only
exists for the purposes of that transaction. Life insurance and
life insurance have this special concept of utmost good faith.
So I would always encourage a client who is thinking
about running a claim and who's received money in relation
to TPD, to be conscious and aware of the fact
(27:45):
that this duty survives the claim, and that it's part
of the hallmark of a TPD claim, is that you
are so physically disabled that you don't have any capacity,
according to education training experience. Does that mean that you
could never do anything that involves something like going overseas? Well, no,
that can't be right per se. Subject to what I
(28:06):
just said about the tenure of what TPD is about.
So the context is always about disablement from employment due
to injury or illness. And so I'm always very cautious
and always say to my clients, just be careful. You know,
the circumstances about this payments are one off lump sum payments.
There is examples and I'm not saying this is one
of them, but there are examples of where the insurance
(28:29):
company has identified a lack of utmost good faith. There
is a legal basis to potentially claim back that money.
I don't mean to scare people, but I just mean
to explain. Insurance is a bit spesh in that respect,
and people just need to be aware about that when
they think about making a claim during a claim and
even after a claim.
S2 (28:47):
Yes. Let's open the floor to questions.
S6 (28:52):
I do thank you just on that good faith declaration
or whatever it is, once a lump sum payment has
come through with a psychological injury, how can they prove
otherwise that if there's been any improvement, or how do
they hold those accountable for that with a psychological injury?
Every day is a different day from a mood, perspective,
a depression, anxiety, all those sorts of different things.
S3 (29:15):
Yeah, I hope I didn't overstate the point. It wasn't
my intention in the question to give more than what
really represents to be an assessment. All it is, it's
an assessment based on the policy terms, according to what
we've described as that framework. So long as that's been
met and there's good faith in that claim. That is
(29:37):
the that is the nature of TPD. That's what it's
all about. There are guardrails to what this is about
and the circumstances that potentially could be investigated. I guess
the way that I like to think about it, though,
is if we're doing the right thing right, we've got
a good faith claim, circumstances that are about disablement, it's
not going to come up if something happens that relates
(30:00):
at a later point to say something like, you're needing
to retrain and and to get back into employment in
another capacity on medical advice, that's still good faith. It's
not inconsistent with the nature of TPD.
S2 (30:16):
Any other advice on how to best personally inform ourselves
on our policy?
S3 (30:21):
Look, if you're having a go at trying to understand
your own claim, you're not going to get the policy
online necessarily. Because unless you've just become disabled and you're
reading the current product disclosure statement, you probably haven't got
the version of the policy that applied at your date
(30:41):
of disablement. So if you're thinking of making a claim,
the best way to think about it is to get
legal advice before you do that. If you've got a
claim that's on foot, your solicitor, or you could ask
the insurance company or the super fund for a copy
of your policy and you can read up on it,
but you won't get a copy of the policy online
(31:03):
because those policies change all the time. I mean, if
you want to cut through, what I would be suggesting
you do is just ask a claims manager for a
copy of the policy. You're absolutely entitled to do that.
If you think that they're going down a path that
doesn't feel like it's on policy terms, you might ask
them to refer to the policy, the clause that they're
(31:24):
referring to, so you can have a look at it
and check. And equally, at that point, that's a good
time to get legal advice as well about that. I
always say trust your gut. Like if it doesn't feel
right in terms of a claim assessment, people instinctively are
usually pretty good at calling out what's called fair dealing
or fairness in a claim assessment. So trust your instincts.
(31:44):
If it doesn't feel right, absolutely. Ask questions. Take legal.
S4 (31:48):
Advice.
S3 (31:49):
Step back from it before you offer the next set
of information responses. As an example, I had one claim
that was recently settled where the claims manager gave me
the wrong policy, asked the wrong questions with the wrong
information about the wrong date of disablement, and the claim
would have been knocked out probably 3 or 4 times
on wrong information sets. And I just kept going back
(32:11):
and saying, can you please give me that term, show
me where it is in the policy that says why? Why?
You're asking a question that goes back to 1998. Like,
just show me how that relates to this coverage. And
I ended up speaking to the senior claims manager, and
that claim was approved within seven days. And that's because
the person who was assessing the claim had some challenges
(32:31):
in understanding how that policy was being applied. Now, that's
a little bit unusual. It doesn't happen very often, but
it would happen often enough for me to feel like
it's always worth checking that one.
S2 (32:41):
We have run out of time today, but I love
how many people have actually joined in. It's nice to
see a big crowd. David, thank you so much for
coming today. It's been a real pleasure and I think
it's really helped open up everybody's mind as to not
only the complexity, the need for getting good legal advice,
and also that one way of being able to recover
(33:06):
from an injury is actually really complex, but there is
a lot of support that is available. And again, get
some good advice.
S3 (33:14):
Thanks, Caroline. It's my pleasure. And yes, I agree, it's
definitely worth it to get the advice at the right
time so that you can make an informed choice about
what you'd like to do and how you can step
into the next part of your life.
S2 (33:27):
Thank you, thank you.
S1 (33:28):
Well, you've been listening. You may have found some of
these concepts challenging. If you are needing help, please reach out.
For more information, you can follow us on our socials
or if you require urgent support, please reach out to
the police or the ambulance on 000 lifeline on 13 1114.
That's 13 1114 Beyondblue on 1300 224 636. That's one 1300 224 636. The
(33:57):
24 hour mental health access line, which is one 800 0151.
That's one 800 0151. And if you think you could
benefit from some legal advice, reach out to the Iro.
Who could recommend some lawyers or someone to help you
with your current legal case. Thank you for joining us
and we'll be back next time.
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