Occasionally, we have people tell us that they don’t want to claim their TPD or income protection insurance benefits because they are concerned that doing so will cost their employer money or otherwise impact them. However, in most cases, this is not going to be the case, and claiming a TPD or income protection benefit is unlikely to significantly impact your employer.
Is my employer responsible for paying my TPD claim?
A TPD benefit is not usually a benefit which is linked to your employment. Ordinarily, it’s a private insurance benefit (often held within your super) which is paid by a life insurance company if you are permanently unable to work again due to illness or injury.
This means that claiming a TPD benefit will not cost your employer any money or significant time (unlike a Workcover claim which can increase your employer’s Workcover premiums and require your employer to respond to allegations which are made against it).
Further, the TPD benefit (the lump sum you are paid for a successful TPD claim) is not paid for by your employer.
Most income protection and TPD insurance benefits are held in super
In most cases, insurance benefits for TPD and income protection are held in superannuation accounts and are completely separate from employment.
Therefore, claiming these benefits usually has no impact on your employer at all and, aside from having to complete a short form for you saying what work you did and how much you were paid before you got sick or injured and stopped working, there is no impact on your employer.
Some income protection and TPD insurance policies are purchased by employers for their employees
Sometimes, as part of industrial negotiations or for some other reason, employers purchase a group policy of insurance that covers all of its employees (or a set group of employees) for income protection, TPD and/or death benefits.
These polices usually provide employees with disability and death insurance benefits under the group policy, and can be a great source of free death and disability insurance, or a cost-effective supplement to other insurance you may have purchased yourself.
Your employer is more likely to provide disability insurance cover for you if they are a larger employer with lots of employees and competitive employment conditions.
If your employer is the provider of the policy that you are claiming on, they are unlikely to have to pay you the benefit directly. Their insurer will do this. However, claiming on a group policy may require them to do more administrative work than would otherwise be the case if you were claiming on policy inside super.
Also, any claim you make on the group disability insurance policy may impact the premium that your employer will have to pay in the future. However, these employers provide these policies for the benefit of their employees and understand they will be claimed on from time to time. Also, claims on these policies are far less problematic for employers than Workcover claims.
Can I claim multiple TPD benefits?
If you have a TPD benefit option in super and another with your employer, you will usually be able to claim the group insurance TPD benefit (attached to your employment) and the super TPD insurance benefit (or insurance you hold elsewhere) at the same time.
You can read more about multiple TPD claims in our earlier blog, “Can I make a claim for a TPD benefit on more than one policy or superannuation account?”
Can I claim multiple income protection benefits?
With income protection benefits, there is likely to be offset if both income protection benefits (the group disability insurance and any income protection policy you have in your super) are claimed at the same time.
Sometimes, if you have two separate income protection insurance benefits, it may be possible to extend the waiting period of one of the benefits to allow you to be paid all of other benefit entitlements first, this is something that is usually possible with AustralianSuper income protection claims.
Example of claiming on two income protection policies with different waiting periods
- You have group insurance (through your employer) for income protection with a waiting period of 90 days and a benefit period of 2 years (that is, benefits will be paid up to two years).
- You also have income protection insurance through your super, which you have applied for, and you have nominated a waiting period of 2 years and 90 days and benefits up to 65 years of age.
In this scenario, you could claim on the group insurance for the first two years of incapacity (after the waiting period) and then move onto the super income protection policy after 2 years.
Get help from a TPD and income protection lawyer
Generally, in most situations, claiming a TPD benefit does not adversely impact your employer. Likewise, claiming income protection benefits you hold in your super does not adversely affect your employer. However, if you have group insurance through your employment, there may be some extra administrative work required by your employer, and their insurance premiums may increase (depending on the claim specifics).
Nonetheless, this insurance is available to you if you become sick or injured and you are unable to work. It is a financial lifeline should your ability to work be significantly impacted.
If you need help or want more information about TPD and/or income protection claims, we provide free advice and run claims on a ‘no win no fee’ basis with no upfront fees. So, it costs you nothing to find out where you stand.
Contacting Berrill & Watson
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