Explaining TPD definitions: “Solely” responsible cause

Millions of Australian workers hold total and permanent disability insurance (TPD) automatically through their default super fund, acting as a safety net in case they suffer injury or illness and can no longer work in the job they were trained for.

This can be an overwhelming and stressful time, which is made worse when claims are declined or drawn out by insurers.

A recent case study highlights one of the reasons that insurers have given to deny a claim, based on the existence of other causes preventing someone from working. 

Who is affected by medical treatment clauses?

Our client David* worked as a general practitioner across several clinics. His mental health had been deteriorating over an extended period of time and he was actively seeking psychiatric treatment.

After his symptoms became worse, he lodged a claim for TPD benefits, under his insurance policy.

The insurer declined the claim, on the basis that his medical licence had been cancelled a few months prior. Their argument was that his illness was not the sole reason that he had stopped working, and therefore he didn’t meet the definition of Total Disability.

A complaint was made to the Australian Financial Complaints Authority (AFCA), who found that the insurer had not assessed the claim correctly and was not entitled to decline the claim on that basis and would need to reassess.

In its reasoning, AFCA says that the question of whether the person claiming is unable to do their usual job should be determined by whether his medical condition rendered him unable to perform those duties.

“If the medical condition causes an inability to perform the duties, then it is not relevant that there may be other things which also cause an inability to work.” - AFCA

The decision continues that the inability to work should be tested on whether the illness is serious enough to stop the claimant from being capable of doing their duties, rather than their overall employability.

What does this mean for similar claims?

If you have lodged a claim and your insurer declined it or is investigating non-medical factors that may have contributed to you being off work, it’s important that you seek legal advice to understand your options.

Our experienced superannuation insurance team have helped thousands of Australians access their entitlements. They know the system and are ready to help, if you’ve had a claim declined or think you might have a claim. Contact us today to find out what legal options could be available to you.

*Name has been changed to protect client privacy