Gaius Whiffin discussing Banking Royal Commission into TPD claims – 11 February 2020

Tuesday, 11 February 2020 

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DK – Deborah Knight / Gaius Whiffin–   C1,2,3, etc – Callers 

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DK      We love Tuesdays for our free legal advice and this one is a beauty because one thing insurers were slammed for in the banking royal commission was the narrow definition of claims and one in particular, the total and permanent disability claims. A lot of people have got TPD insurance. More than 13 million Australians in fact get automatic cover through your super, through your superannuation but almost half a million Australians offer working in casual roles or high risk jobs, they are funnelled by default into these policies with really narrow definitions and they really are not worth the paper they are written on.  It results in some payouts only if consumers if can’t perform activities of daily definition is the definition, things like feeding, dressing or washing themselves, and as a result many of these claims are declined. Now we know ASIC is calling on the government to crack down on this and to give Australians a fairer go but something needs to be done about it and you might be caught up in it.  You are in the right place if you’ve got a question to do with payouts, to do with TPD with superannuation, give us a call now.  131873 if you’ve been caught out yourself by these narrow definitions, has your insurer knocked back your claim. That is our focus on legal matters today. It’s a really popular segment and don’t leave it to the last minute, we do run out of time. 131873 and as always we have got our $100 Westfield voucher to give away to the caller who asks the best question in our legal matters segment. Turner Freeman Lawyers gives a lot of specialised legal services including compensation and negligence law, asbestos litigation, superannuation and disability claims, employment law, wills and estate and property law and Gaius Whiffin in the partner in Turner Freeman Sydney’s office and specialises in personal injury law, he is the man to ask your questions and answer them all and he is here in the studio with us now. Gaius hello to you.

GW     Hello Deb.

DK      Give us an idea with TPD, what the insurer is basically meant to cover when it works?

GW     Yeah well TPD is like any other insurance, it comes part of your superannuation policy but there are definitions and you’re only going to be entitled to that insurance benefit if you meet those definitions. So when someone looks at when the superannuation fund and the insurance they are going to take out, they often don’t look at the definitions in those policies and so forth. It is one of the last things you often look at when you are starting a new job or choosing what superannuation fund but it is important. There is a variety of definitions, generally the definition is somewhere along the lines that if someone is unable to perform employment for which they are reasonably qualified having regard to experience and qualifications and age and so forth but it can be very different to that and ASIC has certainly been looking at that in the last few months or so.

DK      It is a tricky field, it is complex like you say. You might have a question. Gaius is here answering your questions, free legal advice on this Tuesday. 131873 is my number. In terms of what you are covered for, is it for work incidents, are you covered for say a car accident?

GW     Oh yes. The policy….total and permanently disabled can be for any reason, it can be something not to do with an accident at all, you might have cancer unfortunately but generally if you are unable to work and generally in an area to which you are reasonably qualified, you are probably entitled but again it’s a complex area because of the definitions, it’s not quite as simple as car insurance or contents and house insurance etc.

DK      And a lot of people I suppose would be asking the question, do I really need it because with 13 million Australians having this insurance because it becomes there automatically with your superannuation, is it insurance that you think is essential.

GW     Well that’s up to the individual, I mean at the end of the day um the coverage is quite substantial in a lot of circumstances especially if you have been working a long time and have a decent amount of superannuation up your sleeve. It depends upon what other insurance you have so do you have your own income protection insurance, do you have your own life insurance and so forth so it needs to be the individuals choice.

DK      And I know that ASIC is calling for greater control over the TPD insurance. How is that going? Are we seeing any action, are we likely to see it soon.

GW     Well I’m not sure but it was one of the recommendations of the banking royal commission that ASIC have a lot more control, especially over the claims process, because a lot of these insurance claims are handled in a different way to other insurance claims is what ASIC found, ASIC found that whereas in a number of insurance claims, so if you have a motor vehicle accident, the emphasis is on well there has been an accident, you are entitled to have your car fixed. These claims seemed to be looked at the other way and the claims managers seem to be looking at it in terms of “Well, how can we get out of this payment” – rather reversing the sort of onus there and that is certainly what I found in practice too.

DK      Yes – 131 873 is the number to call. Angela is on the line in Frenchs Forest with a question. Hi Angela.

C1       Angela

Angela             Hi – my husband actually was injured at work and he had several superannuation funds apparently operating, but to our horror most of them had withdrawn TPD insurance – is that common?

GW     Ahh, I’m not sure they had withdrawn them so that

Angela            They’d notified us in the past that there – the policies were changing and TPD would no longer be covered – one of them covered him – but he had several superannuation funds and …..

DK      Which a lot of people do – you have multiple – many people have multiple

Angela            Yes – if you change jobs ……

DK      Of course

Angela            And you still – you know they weren’t dead funds – they still had money in them     and they were – but they had – most of them had withdrawn insurance.

GW     Yes – well you’ve got to be careful of that because you should be given the option – if you’ve got insurance to cover a particular fund, you need to be given the option

Angela            I would have thought the superannuation funds were normally inclusive rather than exclusive – so you should opt out rather than opt in.

GW     Generally when a new fund is opened, that’s the case – there has been a lot of movement, especially with smaller funds – so if some of these funds were – they are still active funds – but there hasn’t been contributions for some time, there was a move by the Government following the Royal Commission that insurance wouldn’t apply to those funds from the 1^st of July last year – so that may have been the case.

Angela            No this was 5 years ago.

GW     Oh okay – well that’s say – that does sound quite strange – I mean you would need to look at what documentation was provided to you – you can’t just cut out insurance cover.

DK      Without notifying the person with the claim absolutely.

GW    

DK      Yes you would have to look at that fine print unfortunately.  Brett is with us too in. Brisbane with a question for Gaius – Hi Brett.

C2       Brett

Brett   Good morning – how are you.

DK      Well thank you.

Brett   Excellent.  I’ve got a question – if you’ve a superannuation running – and so you’ve got $500,000.00 in your super and you are injured at work and you put in a TPD claim and that’s granted – do you lose your $500k in super and get a pension or do you get both?

GW     No – whatever superannuation – the insurance is separate to your other superannuation – so you don’t lose your superannuation – if your insurance benefit is whatever it is – that is a separate benefit to whatever superannuation funds or – have been contributed over the years.

DK      Alright – there you go – it is separate – 131 873 is the number to call. Don’t forget we’ve got our $100 Westfield Voucher to give out for the best call for our Legal Matters segment. If you’ve got a question on superannuation on TPD insurance – you’re in the right place – Gaius is here from Turner Freeman Lawyers to answer all of your calls. We’ll take a short break and get back to them right after this.

131 873 is my number – we have free legal advice for you – Gaius Whiffin is one of the key lawyers with Turner Freeman- he joins us every Tuesday – a lawyer from Turner Freeman to look at the issues. We are focusing today on TPD insurance – total and …… what does it stand for Gaius?

GW     Total and permanent disability.

DK      TPD insurance – total and permanent disability insurance – 13 million Australians actually have it through the super but it might be an issue that you’re facing problems making a claim – maybe you’ve had issues with very narrow definitions that have impacted you – Gaius is here to answer your questions and we’ve got a $100 Westfield Gift Voucher on the line for the best call as well.  131 873. I know Gaius that the claims process – it can be extremely trying for a lot of people – it can be complex – how hard or how easy is it for people to navigate the claim process?

GW     Yes – look it’s not easy Deb – I mean and it should be a lot easier – I mean some of the initial packs that I’ve had been able to see – you know sometimes go for 50 more pages in terms of claim forms and doctor’s certificates – you then you need another doctor to sign off from this and you need your employer to sign off and your ex-employers – you know you haven’t worked there for some time so they are not very helpful so – it is a fairly complicated process and it is certainly one where a lot of people seek legal advice – the issue with some cases though of course is that the superannuation payment or the insurance payments at the end of the day is not necessarily going to be sufficient in some circumstances for that legal advice – so it can be a tricky one – that’s what as – is looking at – is looking at this claims process and looking at the – also the timeframes involved in that process because one of the recommendations of the Royal Commission was also that the process should be within that six (6) month timeframe and that’s supposed to be is the standard practice industry – standard practice now a days – I’m not quite finding that at this stage – but anyway – ASIC does want control over – or does want to have some management role in the claims process………

DK      To make it simpler and more timely – which is what everyone would want….. Greg is with us on the line from Canberra – Hi Greg.

C3       Greg

Greg   Oh g’day guys.  Yes – just a couple of questions. For example – if I’m an electrician right and I get injured and apply for TPD and it is deemed that I cannot do electrical work but can say for example drive a cab – therefore not eligible for TPD – is that correct?

GW     Depends upon the definition – that’s what we – that’s what ASICS is actually looking at – there’s a number of policies which have such a definition that’s – you know – it’s very very narrow and if your superannuation policy has that definition, then you are not going to be covered and I think as identified by about ½ a million I think it was – people that might be in that case and that’s what they refer to is these job policies  – Generally, there is a lot of circumstances where that wouldn’t be the case and if you are entitled to TPD payment if you are unfit for your normal job – having regard to training and experience – so if you’ve always been an electrician, if you’ve done your apprenticeship – worked through – that’s been your career for 20 or 30 years and you can’t do that anymore but there’s – generally, there are going to be other sorts of light jobs that you can do whether it be cab driving or any other sort of light employment, then if you’ve got one of these superannuation policies with this restrictive definition you may be in trouble.

DK      Yes – good question Greg – thank you. John – a quick question from you which is a good one too – Hi John

C3       John

John   Hi – yes I have a very old superannuation fund and I have TPD which has been accepted through Cbus but this one from AMP they said that I am not covered – only for death – is that your……

GW     Yes – it can be – it can be – as I said – it depends on the actual fund and if it is quite an old fund and especially if it’s you know – before you know –in the early 90s or so forth

John   Oh early – yes.

GW     Even earlier – okay – well yeah – they may very well be right – you will need to have a look at the definitions in the policies – you will need to go through all your documents – which – whatever you’ve kept and put them to the test over that too.

DK      Yes – it can be frustrating.  Unfortunately we are out of time as it always happens with this segment – it is a popular one – Louis, Greg and Steve – apologies we couldn’t get to you – but I think Greg had a very good question there – is that who you would like to give to our $100 Westfield Voucher?

GW     Yes.

DK      So Greg – we’ll get you to stay on the line and we will send out that $100 Westfield gift voucher for you for your questions.  Legal Matters of course every Tuesday with Turner Freeman Lawyers. Good on you Gaius – thank you so much for coming in.

GW     Thanks Deb.

DK      Gaius Whiffin there – a Partner in the Turner Freeman Sydney office specialising in personal injury law and we do look every Tuesday at Legal Matters – so if you’ve got a question give us a call at this time next week – Free legal advice – who wouldn’t want that?  Debra Knight with you here on Afternoons lots of calls coming through on the matter of restaurants and the hospitality business – the fact that it is really a struggle to make ends meet – we’ll get to your calls and your emails on that.  It’s coming up here on Afternoons – where it is 5 to 2 – 5 to 1 in Queensland.