If you cease work due to an illness or injury and lodge a TPD claim, your insurer may ask you for detailed employment information at the beginning of the claim to determine the average hours you worked prior to ceasing work. Some TPD insurance policies will use a "minimum average hours” definition when assessing your claim. In this blog, we explain precisely what that means.
Examples of the information an insurer may request when lodging your TPD claim include:
- documents which support the average hours you worked prior to ceasing work (for example, payslips, payment summaries and even bank statements);
- details about whether your average hours worked reduced prior to ceasing work (i.e. if you engaged in a graduated return to work plan or requested a reduction in hours).
What are “minimum average hours” requirements for TPD claims?
The insurer may be asking for this employment information because, under the applicable insurance policy, the average hours you worked prior to ceasing work due to illness or injury may affect the TPD definition which applies to your claim.
Many policies contain “minimum average hours” requirements, which require you to work for an average of 15 or 30 hours per week prior to you ceasing work due to illness or injury, to be assessed under the usual ‘Any Occupation’ TPD definition. The average hours may be calculated over a period of twelve or even eighteen months.
How can “minimum average hours” requirements affect my TPD claim?
If you work less than the average hours listed under the insurance policy, you may be assessed under an “Activities of Daily Living” TPD definition. This is a much harder definition to satisfy than the usual ‘Any Occupation’ TPD definition.
Potential challenges for TPD claimants calculating minimum average hours
It can be difficult for TPD claimants to calculate and support the average hours they worked before ceasing work due to an illness or injury.
Some examples of challenges you may face include the following:
- You may be unable to obtain the information required to substantiate the average amount of hours you worked. This may be because your employer is no longer trading or is uncooperative or because you do not have copies of any of your payslips and can no longer access them.
- If you are self-employed, you may find it difficult to substantiate the amount of hours you have spent setting up a business or doing other work for which there may be no records (e.g. managing staff, reviewing work or performing ‘director’s duties’).
You may find these earlier articles useful or interesting reading:
- Working with your employer for a successful TPD claim
- TPD and other disability insurance claims when you’re self-employed
Disputes regarding “minimum average hours” requirements are common and, unfortunately, can delay the assessment of TPD claims even in circumstances where the medical evidence supports that the usual ‘Any Occupation’ TPD definition is met, and the claim should otherwise be approved.
When you should seek assistance from a TPD lawyer?
We have recently run and won two claims with “minimum average hours” requirements, with our client receiving $1.5m in total TPD benefits. Fortunately, our client contacted our office for advice and assistance before lodging her claims.
The best time to seek help from a lawyer regarding any “minimum average hours” requirements which may apply to your TPD claim is before lodging the claim. Otherwise, you may not find out that this requirement is in your policy and must be satisfied until it is too late and you have already provided the insurer with evidence which supports that you haven’t met the requirement.
If you have already lodged your TPD claim and it has been declined on the basis of a “minimum average hours” requirement, don’t hesitate to contact our team for advice as you may still be able to provide new evidence and dispute the decision. It costs you nothing to find out whether you stand.
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