Time limits on TPD claims

The Financial Services Council (FSC) has been reported as calling for a statute of limitation on disability claims. [1]

Presently there is no general time limit within which people must lodge a disability claim for total and permanent disablement (TPD) or income protection or any other insurance arising from a disability through superannuation.

Proposed time limits on TPD claims

This can lead to difficulties when claims are made many years after a person ceases work because the quality of evidence available to support a claim will diminish over time. It is also difficult for insurers and superannuation trustees alike to determine with any degree of accuracy future claim commitments.

For those reasons alone the suggestion of a time limit is a reasonable one.

Proposed rules

Any time limit however, if it is to be introduced, must come with some exclusions. There can always be exceptions to the general rule where someone legitimately has not been able to pursue a claim within a certain time limit. Mechanisms exist in current legislation for time limits to be extended in circumstances where a person becomes aware of some material facts which they did not and could not have known about before. They are then allowed an extension for a short period of time from that point at which they become aware of the new information. This is crucial in circumstances where someone has lost the ability to work because of an injury or illness and should be available where:

• Claimants have been advised by a superannuation trustee or insurer that they are not able to submit a claim
• Where claimants are not aware of their right to claim.
• The claimant becomes aware for the first time of some material information relevant to their decision as to whether they should make a claim or not.

Time limits generally differ depending on the subject matter. In disability claims it is suggested that a period of 6 years would be appropriate. Across the country in personal injury claims time limits can extend from anywhere between months up to 6 years. In some latent injury cases where the existence of an illness takes a long time to be discovered there is no time limit. This is the case for example in relation to asbestos related disease in Queensland.

Reasonable time limit

A time limit of 6 years for disability claims is appropriate because it allows a reasonable period of time for the potential claimant to exhaust all avenues available to them to return to work be that through the use of other insurance schemes, common law rehabilitation processes or the social security welfare net and accompanying vocational assistance.

Any shorter period would not allow a reasonable time for an injured or ill person to fully test their capacity for ongoing sustained employment.

A period of for example 3 years would be too short. Given that there are often lengthy waiting periods required to pass before a claim can be made, commonly 6 or 12 months.

Whilst a time limit is good for the reasons referred to above it must be implemented carefully and in a way which is fair to those who may be entitled to claim for disability in circumstances where they can no longer work in their usual occupation. There must always be provision for exceptions with the ability to extend the time limit in certain circumstances.

The imposition of an appropriate time limit with the ability to extend the time limit will solve the insurer’s problem of open ended time frames as well as considering a potential claimant’s position and providing them a reasonable opportunity to rehabilitate and return to work without the assistance of insurance.

Your TPD and Disability claims

If you need advice or help with your Disability or TPD claims, or if your claim has been rejected by your insurer, give Super Claims Australia a call on 13 43 63. Alternatively, send us an email via our online enquiry form.