Total & Permanent Disability

TPD Payout Guide

By LHD Lawyers

If you have been rendered unable to work by a serious injury, you might be eligible for a total or permanent disability (TPD) payout. This provides you with the compensation you need to recover and support yourself while off work.

TPD payouts are generally claimed through a life insurance policy attached to your superannuation account. Many Australians are unaware that they hold such a policy with their super, but it can be a vital lifeline if you suffer a debilitating accident.

What injuries and accidents are eligible for a TPD claim?

Any injury or accident that prevents you from working and earning an income is eligible for a TPD payout. This includes injuries sustained in and out of work, as well as chronic conditions or illnesses.

Learn more in our FAQ for TPD claims.

How much is a TPD payout?

TPD payout amounts vary depending on the insurance conditions of your super fund and the specifics of your case. Lump sums can range from anywhere between $30,000 to $1,500,000.

Example of a recent TPD payout we have won for a client

Our client suffered a back injury at work which required surgery. They were working as a farmhand at the time they suffered an injury and had not been able to secure any gainful employment since 2018. This client has always worked in physical, hands-on roles. They did not have any other skills or formal qualifications. LHD has been able to secure two successful TPD outcomes for this client from two separate super funds of which this client was a member with at the time they last actively worked.

The client received $381,971.66 and $132,400.00 from two separate superannuation funds.

Explore more recent wins and TPD compensation payout case studies.

How long does it take to get a TPD payout?

Before submitting a TPD claim, you will need to spend an extended period of time off work to prove that you cannot earn an income due to your injury or illness. This inactive period can range anywhere between three to six months, depending on the insurance policy.

Once your TPD claim is lodged, most claims are resolved within 6 to 12 months. However, this may vary depending on the specifics of the case and how long it takes to accumulate all necessary medical and legal evidence.

How is TPD paid out?

TPD claims are generally paid out directly into your superannuation fund. From here, you will be given access to your TPD insurance benefit and your account balance in your superannuation fund. The payout can be transferred in part or in full to your everyday account or left with the rest of your super.

How much tax do you pay on a TPD payout?

A TPD payout from a superannuation fund is not considered taxable income, however, you may have to pay superannuation lump sum withdrawal tax if you choose to transfer it into your regular account(s).

Tax requirements can also vary depending on your age, pension status, and the conditions of your policy. If you are unsure of how much your claim will be worth, get in touch with a specialist TPD lawyer for an estimate.

Does a TPD payout affect Centrelink?

Depending on the type of Centrelink entitlements you receive, a TPD payout may affect your regular payments. This is particularly relevant for pensioners who plan to transfer their TPD payout into an everyday account.

When in doubt, report your financial situation to Centrelink, or speak to one of our qualified TPD lawyers for advice.

Make a TPD claim today

LHD Lawyers help everyday Australians receive the benefits they are entitled to for TPD claims. We are so sure of our abilities to win your case that we stand firmly by our No Win No Fee Policy. Call 1800 455 725 to arrange a consultation.

Author: Khushboo Kang

Original Publish Date: September 8, 2021

Last Updated: February 27, 2024

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