Q & A on the 2GB Chris Smith Afternoon Show discussing Super TPD
Tuesday, 20 June 2017
Luke /KB – Kerry Byrnes /C1,2,3, etc – Callers
Luke Now in legal matters today, we’re going to continue the conversation about income protection because although it’s important it’s the least common type of insurance that people have so if you’ve got any questions about income protection or anything else to do with superannuation you can call us right now on 131 873 and thanks to TF lawyers and their legal matters segment we have a $100 Westfield voucher to give away to the caller who asks the most relevant question. TF lawyers provide a range of specialised legal services including compensation and negligence law, asbestos litigation superannuation and disability claims, family and employment law, wills and estate, and property law. Offices in NSW are at Sydney, Parramatta, Campbelltown, Penrith, Newcastle and Wollongong. and in Queensland you can find them in Brisbane, Logan, North Lake, Ipswich, Toowoomba, Gold Coast, Sunshine Coast and Cairns. Kerry Byrnes is an associate based in the Sydney office. Kerry specialises in total and permanent disability and income protection claims made through super policies. She’s with me now, hello Kerry.
KB Hey Luke how you going?
Luke Good, nice to see you. Just to remind our listeners what income protection insurance actually is, does it have to be part of a super fund?
KB No, it doesn’t have to be part of super, um, it frequently is, and that’s the way that most people would have access to it but there is also an ability for people to take out an insurance policy themselves if they want to.
Luke So this I’m assuming by virtue of name if you become unable to work it provides you perhaps not your full income replacement, does it? Or proportion of it?
KB Usually a proportion, usually around 75 to 80 per cent depending on the policy. Um but yeah it’s designed to cover people if they’re not able to work due to an injury or an illness.
Luke So is this an insurance you opt in? So it’s part of the super fund you know you can have life cover or whatever it might be, this is something that would normally be something you would have to opt in or would your employer offer you this?
KB It depends on each individual policy to a large extent so, often people have group super, um sorry, group insurance policies through their superannuation so in that sort of situation it’s the actual trustee of the superannuation fund who would monitor the different types of cover that people have so the top three usually are death, total and permanent disability and then the one that lags behind a little bit is income protection but that’s the way that most people will have access to an income protection policy.
Luke So it kinda sounds pretty important. Why is it also relatively uncommon?
KB Um, it’s a good question. Um, I suppose to a large extent it’s got to do with um what the uh trustees feel is going to offer the best value um for the different members of the um of the fund. There is definitely an under insurance problem in Australia that’s something that commonly comes um up when you have these sort of discussions so I think it’s something the trustees of the super funds look into as they take out these kind of policies, um and I suppose also making sure that they can get value for their members, value for money cause the premiums can sometimes be quite expensive.
Luke Is it typically something you would add on to the money that would go into your savings superannuation component or is it deducted from the total percentage that would normally be um you know, contributed.
KB The premium is deducted from your particular um how much you’ve got in your part of the fund.
Luke Okay, so if your premium was a thous-, if you were getting a thousand dollars benefit by virtue of your salary a year uh and you were opting in to the income protection, the cost of the income protection comes off the thousand dollars so it would, -could potentially lead you to accumulate less but then you gotta weigh up the benefit of having it or not having it.
KB Usually with these kinda policies they’re not that expensive they’re maybe comparatively expensive but you know every policy is different and that’s something that the trustees have to monitor quite closely to make sure that they are giving value for their money for their members.
Luke Okay legal matters today, we’re joined by Kerry Byrnes who’s from TF’s Sydney office, we’re talking about insurances and superannuation and and we have calls on line 131873, g’day John go ahead mate.
C1 Hi Kerry.
KB Hi John.
C1 Um how are you? Good thanks, um I was put on um GSC a number of years ago by my employer and my superannuation fund due to a um an injury at work and it was classed as a permanent disability. Now should my employer have been contributing their portion of the guaranteed superannuation towards my um towards me or for me while I was on that?
KB What were you off on leave for? Was it like a worker’s compensation type situation?
C1 It was through an injury that was caused by work and then I was deemed to be unfit for work permanently.
KB Did you remain employed?
C1 Um, no I got transferred then over to the trustees of the group super annuation fund.
KB It sounds like a pretty specific kind of situation John I think I’d probably need to get a few more details from you in order to be able to give you some specific advice, but generally speaking in terms of the guaranteed super usually you’re only entitled to guaranteed super only if you’re working um so it would really depend on the situation so it might be the sort of thing that I can give you some advice about off air.
Luke John we’ll take your details and pass them on to Kerry thanks for the call, I notice a me riotous professor Rosalind Croucher AM has been appointed as president of Australia’s Human Rights Commission. More on that coming up in a moment or two. Do you know Rosalind?
KB I’m familiar with her name but-
KB It’s exciting.
Luke I was gonna say-
KB No, no.
Luke -wow, this is gonna be fantastic, scoop.
KB No, not at all.
Luke Rod go a-
KB Lovely news.
Luke Rod go ahead mate.
C2 Good afternoon guys, um look I’m 53 years of age I’ve got a uh income protection plan outside of superannuation, cause I used to work in the um ah superannuation and insurance industry.
C2 Its 80,000 dollars worth of cover with a six month waiting period, I’ve just look at my last premium statement which I’m about to pay and its starting to become quite expensive.
C2 A way of reducing the costs to me is that I can either reduce the amount of coverage or i can reduce um or I can increase the waiting period further, is there an option for me? I’m in an accumulation plan I’m a commonwealth public service I’m in the PSSAP plan but I didn’t take up the option for income protection outside of the super cause I had an outside policy, cause at the time 15 years ago that was quite tax effective for me. So I’m just wondering what would be possibly the best option for me and is it available for me to reduce- either reduce the amount of the potential payout or increase the amount of the waiting period which will reduce the amount of both options…
KB I think possibly that might be really a question that’s best directed towards a financial planner rather than you know this isn’t the sort of situation where you’ve needed to make a claim on it luckily um so that’s the sort of question that’s probably better directed to a financial advisor I think.
Luke Alright mate thank you for that, uhh Justin g’day, go ahead mate.
C3 Yea mate what I’m just inquiring about is my wife um I wouldn’t say she’s retired she’s only 45 now, but she got- more-or-less got told to give up the work force because she got diagnosed with a condition she going blind and deaf I think called retinitis pigmentosa.
Luke Oh sorry
C3 Ah that’s alright s*** happens mate what do you do. She’s actually on a blind pension now um cause we actually found out at the time she was- she got diagnosed with that the same time she fell pregnant with twins, at the end of the day she said oh well gods given me the kids but taken the eyes. Now my question is if it’s in her policy how would I find out if she’s been more-or-less what is it TPD she’s not allowed to work anymore, would that be on the policy or how would I find out about that.
KB Quite possibly yea, I supposed the best way would be to have a look at the policy it would be good to know first of all if she has TPD cover under her super do you know if she does have that?
C3 I’m not too sure but with her getting out of the workforce would they have taken that to offer her a policy because I’m still adding to the policy, adding to her super, but with her going out of the workforce, would they change that in the policy or they’re not allowed to do that?
KB You’re gonna get sick of this answer, every policy is different and each policy depends on the wording of it but certainly it would be worthwhile to have a look into whether or not she is still covered by the policy, sometime if you continue to contribute you remained covered sometimes if it’s not an employer who is contributing then you don’t have the cover, So I think it would definitely worthwhile to have a look into it would also be in your case, or in your wife’s case really important to be able to show that the reason she went off work wasn’t because she’s having twins, congratulations btw I’m a twin we’re a handful and um the other thing is that um that you can prove that it was because of her injury or in this case her illness. And you’d probably need some medical support for that but you know, in this case where there’s a diagnosed condition you’d probably be able to get around that, so some good medical support.
Luke Would that be a matter of talking to the administrator of the fund, if it’s a retail fund the company, do you talk to the employer?
KB In this kind of situation Justin, I’d be more than happy to speak to you or your wife off air but certainly you’d wanna get some information about whether what the policy says what the trustee says what are the forms and the information you need to fill in and that’s certainly something that we’re able to assist with.
Luke Righto Justin, we’ll get your details off air, thanks so much 131873 at 11 to 2.
Luke Alright lets go to Greg at Balmain line, Greg?
C4 G’day, I’m a subcontractor and we have to take out our own worker’s compensation, just a hypothetical question if you’re injured at work and you had the other policy well would you get like um double barrel? If you know what I mean.
KB Do you mean if you had both workers comp and TPD?
C4 Yes yes.
KB So hypothetically if it was TPD it may be that you would be able to get both, if it was income protection there’s usually an inclusion clause that says that any workers compensation that you get you have to pay back an equivalent amount to um, to the income protection policy um but again, like I said before you’re going to get sick of hearing this answer it very much depends on the terms of the policy usually you’re okay to get both worker’s comp and TPD but you know absolutely check the policy.
Luke Okay, Greg thank you, Karen?
C5 Yea hi I’m just ringing up I’ve been receiving income protection payment since April 2015 due to a surgery that went wrong I do have an appointment with one of your colleagues in a couple of weeks, I’ve been advised not by the actual insurance company but by other people to think about getting a payout rather than the payment each month What would your advice be on that cause you know it’s a permanent injury and its Sally that I will be meeting with in a couple of weeks if that helps as well.
KB Okay so it’s like a med neg claim if you’re going to see Sally.
C5 That’s right.
KB It might be that um the two types of law are a little bit different, so I don’t pretend to know anything about medical negligence law so I wouldn’t like to give you any advice about what Sally might be able to tell you but certainly in terms of the income protection it’s probably worth getting it as long as you’re in a position to and then have a look at what if there is any other settlement that is offered and that’s deemed to be reasonable and we’ll be able to give you some advice about that then you can you know revaluate at that point in time if there is something that gets offered to you later on but certainly you know in the meantime not a problem with you to keep having that inc protection coming in.
Luke Alright thank you for your call and our final one today, because of time is Paul, who’s calling from Melbourne, go ahead Paul.
C6 How you going, look I became legally blind last year I went on to income protection insurance my job got terminated because of that but I did also put in for a TPD claim December last year and I’m still just hanging out to see what’s happening I keep ringing them and I don’t get much of a response, it was, the TPD claim was part of my corporate superannuation plan.
KB Mhm, yea that’s a really big problem that we have with the super funds and their insurers usually you can expect once you put the claim in with all of the necessary paperwork you can expect to have some sort of response within about 2 or 3 months, but if you put that in in December its now June um it might be time for you to uh go and have a chat to a lawyer Paul um because it might be that there are some legal avenues that you could pursue such as taking the fund and their insurer to court if you can demonstrate that the delay has been unreasonable but there’s no real reason why they haven’t made a decision. So yeah, that exactly is the sort of situation where it might be worth engaging lawyers to give you some assistance.
C6 What about the SCT?
KB I have some personal views about the SCT that I shouldn’t put on the radio. That is certainly an avenue that you can pursue, but it might be worthwhile, if you do decide to go ahead with that or if you decide not to it might be worthwhile to get some legal advice one way or the other.
Luke Thank you Paul, what is the SCT?
KB The Superannuation Complaints Tribunal.
Luke We have our Legal Matters $100 Westfield voucher to give away to the caller whose asked the most relevant question of the day which we’re about to adjudicate and award and don’t forget Turner Freeman Lawyers provide a range of specialised legal services including compensation and negligence law, asbestos litigation, family and employment law, wills and estate, commercial litigation, superannuation and disability claims. Uh the winner is Paul, okay well done Paul, you’ve scored the prize.
KB Fantastic .
Luke Kerry, thank you for coming in.
KB My pleasure, thank you for having me again.
Luke You’ll be back some time no doubt in the future.
Luke Good on you good to see you.
KB Thank you so much.
Luke All the best. Thank you so much. Turner Freeman present legal matters on the Chris Smith afternoon show back of course next week.