A total and permanent disability benefit is paid when the insurer is satisfied that you are unlikely ever to work again in a job suited to your education, training or experience. Nothing in that test is limited to physical injuries. Psychiatric conditions, whether they followed a workplace incident, an accident, or arose on their own, are a large and growing share of TPD claims, and they are assessed on the same principle: is the incapacity permanent, and does the evidence show it.

Key points

  • TPD definitions turn on permanence and on the work you are suited to by education, training or experience, not on the type of condition.
  • Insurers look for a consistent treatment history with a psychiatrist or psychologist, adherence to treatment, and evidence that reasonable treatment has not restored capacity.
  • A claim can be made through every fund that held cover at the date you stopped work, and a decline can be taken to AFCA.

The definition

Read the policy. Most default super policies require that you have been absent from work through illness or injury for a waiting period, usually three or six months, and that the insurer is satisfied you are unlikely ever to engage in any occupation for which you are reasonably suited by education, training or experience. Some policies use an "activities of daily living" definition for casual or part-time members, which is much harder to meet with a psychiatric condition; which definition applies depends on your work status when you stopped.

What the evidence needs to show

Insurers assessing psychiatric TPD claims want to see a diagnosis from a psychiatrist, a treatment history that includes medication and psychological therapy over a sustained period, evidence that you have followed the treatment, and an opinion from the treating specialists that you are unlikely to return to any suited work. Gaps in treatment, a recent change of medication, or a plan that has not yet been tried are the most common reasons for a decline: the insurer says the condition may still improve. The answer to that is evidence of what has been tried, for how long, and with what result.

Vocational evidence matters too. The question is not whether you can do your old job but whether you can do any job you are suited to. A history limited to one occupation, a lack of transferable skills, and specialist opinion addressing the specific demands of alternative roles all help.

Timing and multiple funds

Cover generally has to be in force on the date you ceased work, which is why closing or rolling over a fund before claiming can lose it. If you had more than one fund at that time, you may have more than one claim; each pays independently. Claims can be lodged years after the date of disablement, provided the cover was in force then.

Where the condition followed a work or accident injury

A psychiatric TPD claim can run alongside a WorkCover or CTP claim. TPD is not reduced by those settlements; it is a separate contract. The evidence gathered for one is usually useful for the other, and the independent examiners' reports from a compensation claim frequently appear in the TPD file.

If the claim is declined

Ask for the reasons and the documents relied on. Respond with further evidence, especially from treating specialists addressing the insurer's specific points. If the fund's internal review does not resolve it, a complaint to AFCA is free and binding on the insurer up to its monetary limits. Court proceedings remain available.

Frequently asked questions

Can I claim TPD for depression or anxiety? Yes, if the condition means you are unlikely ever to work again in a job suited to your education, training or experience and the evidence supports that.

Why was my mental health TPD claim declined? Most often because the insurer considers treatment has not been exhausted or the evidence of permanence is thin. A sustained, documented treatment history with specialist support is the answer.

Does a WorkCover psychological claim affect a TPD claim? No. TPD is a separate insurance contract and is not offset against compensation.

Sources

  • Moneysmart, Total and permanent disability (TPD) insurance — moneysmart.gov.au
  • Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 6.01 (definition of permanent incapacity) — legislation.gov.au
  • Australian Financial Complaints Authority, Superannuation complaints — afca.org.au
  • Council of Australian Life Insurers, Life Insurance Code of Practice — cali.org.au