AustralianSuper is Australia’s largest superannuation fund, both in terms of its membership numbers and the amountof assets invested on behalf of members. In this blog, we look at the specifics of insurance benefits offered by AustralianSuper, including:
- Total and permanent disability (TPD) benefits;
- income protection insurance;
- waiting periods;
- the impact of specific definitions; and
- how payments are calculated.
What insurance benefits does AustralianSuper offer?
AustralianSuper offers default disability insurance entitlements to its members. This provides members with cover for both Total and Permanent Disability (TPD) and income protection insurance benefits.
Default disability insurance entitlements are those that are provided to members even if they don’t actually make an application, provided they satisfy the relevant legislative requirements to be given default insurance cover. Those requirements are that:
- they are over 25 years of age; and
- they have more than $6,000 in their superannuation account; and
- their account is not “inactive” (ie, they have had a superannuation contribution in the last 16 months); or
- they do not satisfy one of the above but have opted to have insurance cover anyway.
Members must also satisfy some other non-legislative requirements. For example, they must be capable of working a minimum number of hours in their usual job without restriction when they join the fund, to be entitled to default cover.
“Age based” insurance cover is usually granted
Members who are entitled to insurance cover with AustralianSuper will usually be granted “aged based” insurance cover. This means that the amount of the cover will usually go down as a member gets older. This will be the case unless the member applies to the superannuation fund to fix the cover at a specified amount and that application is approved.
Increasing or changing the default insurance cover
In addition to the default cover, AustralianSuper members can apply to increase or change their insurance cover amounts to fit their specific needs.
However, whilst AustralianSuper members can apply to increase or fix their insurance amounts, they usually cannot change the definitions which are relevant to their insurance benefits.
TPD claims with AustralianSuper
The definition of TPD which applies to AustralianSuper members includes a “retraining clause”. This means that to be entitled to a TPD benefit, a member must cease work due to injury or illness and be unable to return to work in any role that they are reasonably suited by education, training or experience or which they can be retrained to do (summary only).
Got questions about your AustralianSuper insurance benefits? Call us for FREE advice: 03 9448 8048
There are other non-work-based definitions that also usually apply to AustralianSuper members. These definitions include a loss of limb and activities of daily living definition. If a member satisfies any of the relevant definitions, they will usually be entitled to a lump sum (TPD) payment.
Income protection claims with AustralianSuper
The income protection benefits offered by AustralianSuper are payable for 2 years if a member is unable to work due to their illness. The payments are subject to a 30, 60 or 90 day wait period.
Importantly, benefits are usually payable from the time that the member is first certified as unfit to work by a doctor (after the expiry of the waiting period). The member will usually need to continue to engage with, and be treated by a doctor, to continue to be entitled to the income protection benefits.
How are income protection payments calculated?
AustralianSuper’s income protection benefits are payable at 75% of a member’s pre-disability income. A further 10% of a member’s pre-disability income is payable into the member’s superannuation account as a super guarantee contribution.
Irrespective of a member’s pre-disability income, the amount of the monthly income protection benefit payable is capped at a specified amount. This capped amount is usually recorded on the member’s superannuation statement.
Get help from a TPD and income protection lawyer
Claiming an insurance benefit from your superannuation fund can be daunting. However, the insurance benefits provided through AustralianSuper can provide valuable disability income for members that become sick or injured and unable to work.
If you have ceased work and would like to check or claim insurance entitlements you hold in your AustralianSuper account, we recommend that you get in touch for a free consult with one of our superannuation experts.
Likewise, if you’ve already lodged an insurance claim with AustralianSuper and it has been denied, contact us for free advice about your options to appeal that decision. It costs you nothing to find out where you stand.
Contacting Berrill & Watson
📞 Melbourne: 03 9448 8048
📞 Brisbane: 07 3013 4300
📞 Anywhere else in Australia: 03 9448 8048
How we charge
We are Australia's best-value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.
Please note that the above information is based on AustralianSuper’s insurance arrangement as at 30 July 2021. Those insurance entitlements are subject to change and will change over time. If you require advice about AustralianSuper’s current insurance arrangements, please get in touch for some free advice.
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