TPD Claims: Your Step-by-Step Guide and FAQs

Best Injury Lawyers Insights  |  November 23, 2023

Total and Permanent Disability (TPD) claims can be daunting, but they provide a financial lifeline for those who suffer injuries that make it impossible to return to work. Understanding how they function, especially within the Queensland jurisdiction, is crucial to navigate the process successfully.

How does a TPD claim work?

A TPD claim is an insurance claim made when someone is unable to return to work due to a permanent injury or illness. Typically, this type of cover is available through superannuation funds, but individuals can also obtain standalone policies. Once a claim is submitted, the insurance company reviews the evidence to determine if the claimant meets the criteria for TPD.

The TPD claims process can be long and difficult to navigate without the expertise of lawyers who specialise in this area.

In Queensland, there were 13,495 TPD Claims in 2022, and 10,795 of those were approved. Meanwhile, the average payout for a TPD claim in Queensland in 2022 was $380,000.

What is the criteria for a TPD claim?

The specific criteria can vary depending on the policy. However, commonly in Queensland, the claimant must prove:

  • They’re permanently unfit for their usual occupation or any other occupation they’re suited to by education, training, or experience.
  • They’ve been absent from their employment for at least three to six consecutive months due to the injury or illness.
  • Their injury or illness will likely prevent them from returning to work in the foreseeable future.

Why do TPD claims get rejected?

Some common reasons for the rejection of TPD claims include:

  • Insufficient medical evidence.
  • The injury or illness doesn’t meet the policy’s definition of total and permanent disability.
  • Non-disclosure or misrepresentation when taking out the insurance.
  • The claim was lodged outside of the specified time limits.

What is the average TPD claim payout?

Payouts can vary widely based on the specifics of the policy and the nature and severity of the disability. In Queensland, TPD claim payouts can range from $100,000 to over $1 million. However, the average lies between $200,000 to $500,000.

Examples of TPD Claims

Some of the most common TPD claims in Queensland include:

  • Workplace accidents leading to serious injuries like spinal damage.
  • Severe mental health conditions that prevent one from working.
  • Chronic diseases or medical conditions such as cancer.
  • Accidents causing loss of limbs or severe mobility issues.

How long does the average TPD claim take?

The timeframe can vary depending on the complexity of the claim, but generally, TPD claims in Queensland can take between 6 to 24 months. Delays often arise from gathering sufficient medical evidence or awaiting the insurer’s decision.

Time Limit for TPD Claims

In Queensland, it’s crucial to lodge a TPD claim as soon as possible due to specific time constraints:

Notification Period: Some policies necessitate that the insurer be notified of a potential claim within a particular timeframe after the injury or diagnosis.

Lodgement Period: After notifying the insurer, there may be a stipulated period within which the complete claim, with all required documents and evidence, must be formally lodged.

Superannuation Claims: If the TPD claim is made through a superannuation fund, it’s typically advised to file the claim within two years of the date when you stopped work due to your illness or injury.

Limitation Period: In Queensland, a strict limitation period of three years generally applies to commence court proceedings for compensation. This period starts from the date of negligence or the date of injury in most personal injury claims.

Is TPD a lump sum?

Yes, TPD payouts are typically given as a lump sum. This allows the claimant to manage large medical expenses, ongoing care costs, and loss of income. The lump payments are designed to assist with:

  • Medical Bills: TPD claims cater to immediate and future medical costs, which might include surgeries, therapies, and medications.
  • Living Expenses: The lump sum aids in covering everyday living expenses, compensating for the loss of regular income due to the disability.
  • Home Modifications: Disabilities often necessitate adjustments to living conditions, such as wheelchair ramps, modified bathrooms, or other home adaptations, which can be financially demanding.
  • Mobility Aids: Purchasing or hiring mobility aids like wheelchairs, walkers, or scooters is facilitated by the lump sum payout.
  • Long-term Care: The lump sum can be used to fund ongoing medical treatments, therapies, and in certain instances, in-home care services.
  • Rehabilitation: Engaging in necessary rehabilitation services without the stress of ongoing costs.
  • Education and Training: If re-skilling is possible and desired, the lump sum can be invested in further education or vocational training to facilitate a new career path.
  • Investment: The recipient might choose to invest a portion of the lump sum, providing a potential source of ongoing income.
  • Debt Repayment: It allows claimants to settle outstanding debts, ensuring that financial obligations do not compound during a period of reduced income.
  • Estate Planning: Ensuring the financial stability of loved ones by investing or allocating funds as per future needs or wishes.
  • Reduced Financial Stress: Having a lump sum eases the financial burden and contributes to psychological well-being during challenging times.
  • Recreational Activities: Engaging in leisure or recreational activities that enhance the quality of life and emotional health.

Can you work again after claiming TPD?

Claiming TPD means you’ve been assessed as being unable to return to your previous job or any similar role. However, this doesn’t necessarily mean you can’t work in any capacity. If your health improves or you find a different type of job, you can return to work. But remember, this might affect any ongoing benefits or entitlements.

How much tax will you pay on a TPD claim?

Tax implications can vary. Generally, if the TPD insurance was held within superannuation, some tax might be payable. The tax rate can be up to 22% depending on various factors like age and whether the disability is deemed ‘permanent’ under the Australian Taxation Office’s definition. It’s essential to consult a tax professional to understand individual circumstances.

How much do lawyers charge for TPD claims?

At Best Injury Lawyers, we work on a ‘no win, no fee’ basis for TPD claims. This means you don’t pay legal fees unless your claim is successful. Fees can vary based on the claim’s complexity, but they’re generally a percentage of the compensation received. Always ensure you discuss and understand all fee arrangements with your lawyer before proceeding.

Get Expert Guidance and Assistance With Your TPD Claim

Embarking on a TPD claim journey can be a complex and emotionally taxing ordeal, especially when grappling with the life-altering implications of a permanent disability. Every step from understanding policy and meeting timelines, to effectively presenting your case, needs a precise, informed approach.

At Best Injury Lawyers, we’re not just legal professionals; we’re compassionate allies who understand your circumstances. Our experienced team, grounded in the specificities of Queensland law, is here to shoulder the burden, guiding you through the intricate maze of TPD claims with adept expertise. Reach out today to speak with the Best and see how we can help.