A disability can impact your ability to work, putting your financial security at risk. Whether you are dealing with a mental or physical disability, there are benefits available to provide you with financial support while you focus on your health. The main disability benefits include Total Permanent Disability (TPD) Insurance, worker’s compensation, DSP, and income protection. You must know the differences between these so you know which ones you can pursue and offer the greatest benefits. 

What is Total and Permanent Disability (TPD) Insurance? 

Total Permanent Disability Insurance (TPD Insurance) is a permanent disability work cover that will provide a lump sum payment to a policyholder who is unable to work due to a total and permanent disability or illness. 

TPD insurance in super is what most people fall back on, but you can purchase a private policy for wider coverage. Eligibility criteria vary across different policies, but typically cover disabilities and illnesses that impair your ability to complete daily tasks without assistance. If you are unable to work again, Total Permanent Disability in super should pay out and provide a lump sum to cover your costs. Some policies will cover you if you are unable to continue in your specific job, while others will only pay out if you are unable to work any job.

How TPD Insurance Differs from Income Protection Insurance 

So, how does TPD insurance differ from income protection insurance? The latter is an income replacement payment and it’s generally issued regularly as a percentage of your pre-disability salary. If you can’t work due to your injury or illness, you will receive payments while you recover. Income protection insurance is usually for non-permanent injuries and illnesses. 

It isn’t a case of which one is better because they provide very different services. 

Successful Total and Permanent Disability (TPD) claims pay a lump sum after a total and permanent disability or illness. Income protection insurance pays monthly while you are temporarily unable to work, whether the injury or illness is short or long-term.

You can use your TPD payout for any purpose, it isn’t limited to medical costs or home modification but can be used for these if necessary. An income protection insurance payment is there to replace your loss of employment income. 

Workers’ Compensation vs TPD Insurance

The government mandates employers to fund a workers’ compensation scheme that provides medical coverage and financial support for workers who are injured at work or fall ill due to a situation at work. It was specifically created for work-related illnesses or injuries. By comparison, TPD insurance isn’t necessarily work-related. 

If your injury or illness is the result of your employment, you can file a workers’ compensation claim. You will either file this with your employer or directly with their insurer. Workers’ compensation typically pays out quicker than a TPD claim does, but if you were injured on the job, you can claim workers’ compensation and a TPD claim. A TPD claim can be slow to pay out, which is why it’s wise to use a lawyer to fight your case. 

The Disability Support Pension (DSP) vs. TPD Insurance 

The Disability Support Pension (DSP) is a government payment, and it’s available to anyone with a permanent intellectual, physical, or psychiatric condition that prevents them from working more than 15 hours a week. In addition to proving the permanent condition, you have to meet non-medical requirements including assets, age, income, and residency.

The key differences between DSP and TPD include eligibility and payment structure. 

DSP eligibility depends on your medical condition, which requires government assessment. The only proof required to make a TPD insurance claim is from a medical professional. 

As far as payment goes, you will receive a lump sum from your TPD insurance claim, whereas the government-controlled DSP provides ongoing payments. 

How to Decide Which Disability Benefit is Right For You

Navigating the benefits system can be challenging, especially if you’re not sure which ones you’re eligible for. To break it down as simply as possible, TPD is a long-term solution intended for permanent disabilities and illnesses. If your situation is temporary, income protection insurance may be a more suitable path. 

Additionally, if your illness or injury is work-related, workers’ compensation is the more appropriate solution. However, if the work-related injury or illness is permanent, you can claim workers’ compensation and file a TPD claim. 

If you are buried under medical bills or faced with home modification costs, a large lump sum maybe your greatest need, which is where a TPD claim makes the most sense. If you need a regular income, income protection insurance will make up for your loss of income. 

Every situation is different, you may be entitled to claim more than one benefit, which is why it’s a good idea to speak to a lawyer about your options. 

How a Lawyer Can Help with Disability Benefit Claims

Legal professionals are skilled in navigating the system, whether you’re applying for workers’ compensation or filing a TPD claim.

DSP payments operate on a points scale, so there may be issues with proving the extent of your disability, but a lawyer can help you articulate your challenges. When you’re dealing with an insurance company, they may deny your claim for many reasons. Using a lawyer will ensure you tick every box and provide a wealth of evidence to support your claim, reducing the likelihood of a claim denial. However, if your claim is denied, a lawyer can help you navigate the appeals process and ensure you receive the payout you deserve. They will also handle your claims correctly, meet deadlines, and maximise your compensation.

Making an Informed Decision

Ultimately, the right choice for you hinges on your specific needs. Before you take action, you should consult with a legal professional to find out which benefit, or combination of benefits, is right for you. If you have already filed claims and you’re having trouble, a lawyer can chase your claim or help you navigate the appeals process.

If you have questions about disability benefit claims, get in touch with AJB Stevens to schedule your free consultation.