Superannuation Disability Insurance Claim and Decision: An Overview
If you are a worker in Australia, you are likely to have a superannuation fund. Although most employees are unaware of this, most superfunds include the following insurance benefits: Income Protection and Total and Permanent Disability (TPD) insurance. This article will discuss the basis on which a disability claim would be accepted.
Firstly, one should be aware of the difference between both insurance benefits. Income Protection offers you payment of your wages for a specific period of time during which you are absent from work due to a temporary disability or illness. On the other hand, you may make a claim for TPD insurance payout if you suffer a mental or physical incapacity that permanently disallows you to work.
Where a member of a superannuation fund makes a claim for disability payment, the trustee of the fund (i.e. the entity managing the fund, normally the superannuation company) and/or the fund’s insurer can refuse to make such payment. However, if the refusal has not been properly made, the member can dispute the decision by lodging a complaint to the Australian Financial Complaints Authority or making a claim against the trustee and/or the insurer in the Supreme Court.
It is important to note that the trustee of a superannuation fund owes a fiduciary duty to the member and hence has an obligation to act in the best interests of the member. This principle was reiterated in Maciejewski v Telstra Super Pty Ltd (1998) 44 NSWLR 601. As such, the trustee is obliged to make all relevant and appropriate enquiries before making a decision regarding an insurance claim, this includes allowing the member to respond to such enquiries. The High Court in Finch v Telstra Super Pty Ltd  HCA 36 also added that where a TPD claim has been made, it requires the performance of a trust duty by the trustee, rather than a discretionary power in deciding whether the member’s circumstances meet the criteria for a benefit payout.
If you have any question regarding your eligibility for an insurance claim and/or payout, please contact us.