By Joshua Brown of McNamara and Associates Solicitors
On 1 July 2016 Sunsuper launched a new total and permanent disability (TPD) insurance product which they promote “will remove waiting periods for the majority of claims and focus on early intervention, vocational rehabilitation and, where possible, helping members return to work”.
These changes will affect any person with Sunsuper’s Standard Cover where their date of disablement occurs on or after 1 July 2016. If the date of disablement occurs prior to 1 July 2016, then the disability is assessed under the definition that was in force at that date of disablement.
The new definition (for employed members) is:-
You have been continuously unable to perform your occupational duties since the Date of Disablement and remains so at the Date of Lodgement and each Annual Assessment Date (if applicable) solely due to the injury or sickness; and
You are under the care of, and following the advice and treatment of, a Medical Practitioner; and
You have not been required by the insurer to participate in a Rehabilitation Program; or
You have been required by the insurer to participate in a Rehabilitation Program and are fully participating in the Rehabilitation Program to the satisfaction of the insurer*; and
The insurer, after considering all relevant evidence which is reasonably available to the insurer as at the Date of Lodgement and each Annual Assessment Date (if applicable), including any Rehabilitation Program and any education, training or experience acquired by you up to the Date of Lodgement or Annual Assessment Date (if applicable) then determines in its opinion that you will be unable ever again to be gainfully employed in any occupation for which you are reasonably suited by education, training or experience.
The key features of the new definition are:-
The current waiting period of 6 months will be removed completely.
There will now be a five-year period from the date of disablement to lodge a TPD claim with Sunsuper. You would no longer be eligible to claim for TPD if the claim is not lodged within five years. On the previous definition, there was no limitation period.
On the previous definition if you were accepted as TPD then you would receive a lump sum payment. The new TPD policy will provide an annual payment. The annual payments will be made as 6 payments over 5 years. This will not apply to a person who has a severe injury or sickness. In that case a lump sum will still be paid.
If accepted as TPD you would then need to prove to Sunsuper every year for five years that you are still totally and permanently disabled every year.
A rehabilitation program has been introduced to get people back to work. Failure to participate in the rehabilitation program could result in no TPD payment being made.
These changes do not affect Sunsuper’s Tailored TPD Cover which has the following definition (for employed members):-
You are unable to perform your occupational duties for a period of three consecutive months since the Date of Disablement solely due to the injury or sickness; and
You are under the care of, and following the advice and treatment of, a registered Medical Practitioner; and
The insurer, after considering all relevant evidence which is reasonably available, then determines that you will be unable ever again to be gainfully employed in any occupation for which you are reasonably suited by education, training or experience.
For Tailored TPD cover, the five-year time limit will still apply.
We are quite concerned about these changes and how they will affect people who Sunsuper do not believe have a severe injury or sickness but still cannot return to work. The financial pressures that people experience when becoming disabled are difficult enough without the superfund then drip-feeding the disability benefits to them.
There is also the concern of being required to prove annually that you are still disabled. We believe this is unnecessarily burdensome requiring a person who has suffered a life-changing disability to prove not just once, but six times that they cannot work.
We are specifically concerned with the requirement to be under the care of a Medical Practitioner. What happens in the situation where your doctor says there is nothing further to be done? If you are no longer receiving treatment because you have reached maximum improvement, do you cease to meet the definition?
Our other major concern is how Sunsuper will use the requirement to participate in rehabilitation to circumvent the “education, training or experience” provisions. What is to stop Sunsuper retraining a person in an occupation which they have never had experience, just so they can say they no longer meet the definition?
It seems that Sunsuper is finding ways to avoid having to pay TPD benefits to everyone but those with the most serious of injuries or illnesses.
A possible way around Sunsuper’s new definition would be to apply for Tailored TPD cover, however at what cost? Sunsuper will likely charge much higher premiums for a Tailored TPD policy.
If you have any concerns about your superannuation policy you should seek advice from a financial advisor.
For more information or assistance for total and permanent disability claims please contact Mr. Joshua Brown on (07) 3812 2300.