Surprise, surprise — If you are like nearly 90 percent of Australians, you probably have some kind of disability insurance cover through your Superfund. This could be very important if a work injury were to take you out of the workplace.

But to make the best use of this resource or to simply understand what emergency resources you have, it is important to delve more deeply into thorny insurance concepts like Total and Permanent Disability, default and opt-in procedures, lump sum options and special situations that may arise if you have multiple super funds or if you are a casual worker. Putting together the best possible plan to replace your income in the unfortunate event of an injury could take some careful planning.

Step one – read your annual benefit statement

The annual statement from your super will describe what kind of disability benefits you may already have. Can’t find your statement or begin to fathom what it means? Welcome to the club!

Your attorney or financial planning professional may be able to help.

Some common provisions

Many super funds provide for lump sum payments in the event of total and permanent disability and/or pensions for in the event of a total but temporary disability. These benefits are in addition to early payment of your super if mental or physical incapacity that prevents you from working permanently. Super benefits may often be combined with WorkCover or Centrelink payments, but they may affect eligibility for or the taxability of those other resources.

Some of the super payments are provided under automatic (default) provisions but others must be affirmatively opted into and paid for separately.

What is the difference between Total Permanent Disability (TPD) and Total Temporary Disability (TTD)?

They are similar in that they are available in the event of an injury or disease renders someone unable to work. They are different with respect to the temporary or permanent nature of the disability. In addition, TTD may not be available for work-related injuries. TPD may require evidence that someone is unfit for both their usual employment and any other employment for which they are reasonably suited, based on their education, training or experience.

TPD is often payable as a lump sum under the default provisions of a super fund agreement. The availability of TTD may be more limited, payable only on a monthly basis and requiring a separate agreement and additional premium payments, for example.

What if I have more than one super fund?

Many Australians who have worked for a number of employers have several. The temptation is to combine them for ease of management if nothing else. However you must be careful.

Combining your super funds could work to your disadvantage if they have different provisions covering disability payments. You could lose the benefit of greater protection if you move money out of a generous fund and into a leaner one. Just make sure that you know what payment options you have before combining funds.

Does MySuper protect me against loss of income from an injury if I am a casual worker?

This question can come up, not just for people who have always been casual workers, but for those who have moved from permanent to casual status as a way of coping with the effects of an injury or illness.

The answer is a resounding “maybe not” because of different eligibility criteria for TPD for casual workers. The degree of disability required for casual workers to qualify for TPD is often much greater. As counter intuitive as it seems, in some circumstances it may be better to leave a job rather than struggle bravely along until the consequences of a disease or disability become unmanageable.

Although this post describes some of the common disability provisions found in super fund agreements, the truth is that there is considerable variation. The attorneys at Owen Hodge Lawyers would be happy to help you understand what your current super fund resources are in the event you are injured at work or become disabled. We can also help you deal with the immediate and unfortunate financial consequences of a work injury. Please call us to schedule a consultation at 1800 780 770 at your earliest convenience.