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Chronic illness and total and permanent disability claims

Published on 21 November 202221 June 2023

Chronic illnesses and diseases often come with demands.

If you live with a chronic illness, it’s likely you needed to learn how to live with the physical and psychological effects, deal with treatments, and keep up with medical appointments and specialist visits. And you might struggle to return to work after an attack of ill health.

Dealing with the stresses of disease is demanding enough and can significantly impact your quality of life. Not being able to work makes it harder.

Many people who suffer from a chronic illness and are unable to work are unaware of the financial help that may be available to them, such as Total and Permanent Disability (TPD) Insurance through your superannuation fund.

A successful TPD claim can significantly improve your quality of life. So, what is TPD insurance? When can you make a superannuation TPD claim as a result of a chronic illness? Read on to find out more.

What is a chronic illness?

A chronic illness is a health condition or disease that is persistent and long-lasting in its effects. Most chronic illnesses don’t fix themselves, and some can be life-threatening. Some can be short-lived, and others can linger and need intensive management.

Examples of chronic illnesses can include (but are not limited to):

Arthritis
Cancer
Depression
Diabetes
Fibromyalgia
Heart disease
Motor Neurone Disease
Multiple Sclerosis
Chronic pain

According to the Australian Institute of Health and Welfare, chronic conditions are becoming increasingly common and are a priority for action in the health sector. In fact, studies show chronic conditions are the leading cause of illness, disability and death in Australia.

Given that eight common chronic conditions contribute to 61 per cent of the burden of disease, 37 per cent of hospitalisation and 87 per cent of deaths, it’s only fair there’s some kind of disability insurance in place to offer protection.

What is TPD insurance?

TPD insurance is a resource made available to workers who are permanently unable to continue working in their area of expertise due to injury, illness or a medical condition.

Unlike the various types of income protection claim benefits, total and permanent disability comes in the form of one lump sum payment.

Different superannuation funds have varying insurance policies and eligibility criteria to meet when agreeing to a payout, but generally cover the severity of disability, medical certification and employment history.

When can you make a TPD claim as a result of a chronic illness?

The good thing about TPD insurance payouts is that they cover a range of physical and mental health conditions including autoimmune diseases, multiple sclerosis, and even cancer.

It doesn’t matter how you got the injury, illness or medical condition – it usually just matters that it has stopped you from being able to work.

Generally, if you suffer from a chronic illness, you may be eligible to make a claim if:

You’re working at the time you are diagnosed with the chronic illness
Your chronic illness is listed in your insurance policy
You have suffered permanent and irreversible loss of independent existence – that is, you are unable to perform some activities of daily living without the assistance of another person such as dressing, bathing, mobilising, toileting and feeding
You suffer from cognitive impairment and require the permanent and constant supervision of another person for at least six consecutive months
Your chronic illness prevents you from or impacts your ability to return to work

What do I do if my chronic illness isn’t permanent?

As mentioned, not all chronic illnesses are permanent. Sometimes you may be fortunate to be cured, or not suffer severe symptoms anymore.

Don’t fear – there is something else called Total and Temporary Disability cover. As the name suggests, this is meant to assist individuals who are unable to work for a limited period due to injury, illness or other types of disability.

Unlike TPD, TTD payouts continue (usually on a monthly basis), but similarly, the criteria require to receive benefits vary from provider to provider.

Importance of obtaining legal advice early

The process of receiving a payout from your superannuation fund can be complex (as is the case with many types of insurance policies). It can be especially difficult if you have “exclusions” on your policy, of if your application was rejected.

It’s important to seek legal advice as soon as you are diagnosed or have to stop working because of a chronic illness. Whether it’s forever, or just temporary, our lawyers will be able to review any of your insurance policies held through your superannuation and advise you of your eligibility to claim a TPD insurance benefit.

If you are from Queensland you can learn more on our Queensland Superannuation Page