No, not me — surely not!
When it comes to chronic illness or disability most of us are guilty of at least a little magical thinking. The hard truth is that it is far better to know in advance or shortly after the onset of difficulties about what resources are available.
Your super fund may hold more than you think. Be forewarned though that parsing through the fine print and dealing with insurers is not always easy. Should the unthinkable happen it is good to know where to turn for help.
Most people who have worked have at least one superannuation fund, and most super funds include total and permanent disability (TPD) insurance. The benefit may be payable in a lump sum. Furthermore, it may be in addition to other income protection benefits such as Workers Compensation or Centrelink Disability Support Pensions. Making the best of a bad situation may require some planning.
TPD Benefits and Limits
By law, most Australian super funds must offer TPD lump sum benefits. The details of the plans vary somewhat, but lump sum payments are generally available to employees who cannot resume working and must leave their usual jobs because of chronic illness or disability. Workers need not be unable to do any work, just employment for which they have the suitable education, training or experience.
However, there are limits and qualifications. The insurance premiums that employees pay for TPD insurance are separate and apart from super contributions. Unfortunately, applicants who have pre-existing medical conditions at the time they apply for TPD insurance may be denied or may be required to pay higher premiums. Many people who are suffering from health complications move to part-time employment. They should know that this may make them ineligible for TPD benefits or may reduce the benefit payable.
Making a TPD Claim
Employees should understand that there is often a six-month qualifying period, and the evaluation process may require several doctors’ appointments. The claim process itself may take as long as a year. So don’t plan on buying groceries with your TPD payment next month.
Employers have also been known to be less than forthcoming with information about the availability of TPD lump sum benefits. It is important to ask in a very direct way. Claimants should also be very wary of speaking directly with insurance company representatives who may take information relevant to eligibility out of context.
The complexity of the process makes it very important for employees who are coping with illness or disability to have a strategy. Two things are key:
- Apply for every benefit for which you may be eligible as soon as possible; and
- Get some help.
Understanding all of your options
Just as few of us really believe that we may become seriously ill or injured, many of us intend to put together a financial plan to deal with those and or contingencies — sometime tomorrow, or perhaps very much later.
Well, here we are and the time is now.
Employees who are chronically ill or disabled likely have a number of different resources:
- It may be possible to access super payments prior to retirement age;
- If you have had a fairly full working life, you may be a participant in multiple super funds. Look at the benefits available under all of them ;
- Workers compensation may be available for injuries sustained on the job; and
- A Centrelink Disability Pension may be part of the mix.
That is not the limit of the options, but it may get you started.
Get legal help
In times of financial and health crises, few people think of hiring an attorney. However this may be a exactly what you need to do to avoid further stress during an already stressful time.
The attorneys at Owen Hodge Lawyers would be happy to help you understand the ins-and-outs of your TPD insurance and the other choices at your fingertips. We will also help you make a claim if that becomes necessary. Do not delay, as delay may complicate the claim process. Call us at your earliest convenience at 1800 770 780 to schedule a consultation.