Frequently Asked Questions
What is Group HQ?
Group HQ is an exciting new platform that we have developed for our partners, meeting their needs in a ‘one stop shop’ with systems access, industry insights and innovations, events and case studies.
How often will Group HQ content change?
Group HQ will have regular updates to ensure we are bringing you all the relevant and up to date information available. We will also continue to issue the What's New on Group HQ newsletter, providing you with our latest innovations and insights. We will also keep a record of all published articles so you can access them at any time.
Under what conditions of release can a Trustee pay TPD benefits?
As outlined in our Conditions of Release, TAL pays TPD benefits according to the terms of the policy. The Trustee then decides how best to pay the member.
Generally, once a TPD insurance benefit has been paid by an insurer to a fund on behalf of a member, the Trustee of the fund must then decide how to release the member’s account balance (including the insurance benefit) if requested by the member, in accordance with superannuation law. Potentially influencing factors could include timing, tax questions and the eligibility of members' beneficiaries.
Who pays the insured benefit to a member?
As the member has insurance cover through their super fund, the Trustee of the super fund is the policy owner. This means that, should a member make a claim through the fund on their insurance cover, then any insurance benefit is paid by the insurer to the policy owner - the Trustee. The Trustee will place the money into the member’s account to be incorporated into their existing account balance. They will then discuss with the member how they would like the money to be released to them. The Trustee would need to determine that the member meets a Condition of Release and that the payment is released in the best interests of the member and their beneficiaries.
The member could be paid directly by the insurer, if the Trustee has instructed the insurer in writing to do so prior to the claim being paid.
Does a Trustee have to release an insurance benefit to a member under the same reason the insurer paid the benefit?
Generally, once a TPD insurance benefit has been paid by an insurer to a fund on behalf of a member, the Trustee of the fund then must decide how to release the member’s account balance (including the insurance benefit) if requested.
It’s not a requirement that the fund has to release the money to the member under the condition of release that matches the reason the insurer has paid the benefit, or release the benefit immediately after a condition of release is met.
What is Permanent Incapacity?
Generally, under SIS Regulations, if a trustee of the fund is reasonably satisfied that the member's ill-health (whether physical or mental) makes it unlikely that the member will engage in gainful employment for which the member is reasonably qualified by education, training or experience, the member will meet the Permanent Incapacity definition and the Trustee can release benefits under this condition of release.
Can insurance definitions be more restrictive than SIS Permanent Incapacity definitions?
A Registered Superannuation Entity (RSE) is able to provide a Total & Permanent Disablement (TPD) definition that differs to the Superannuation Industry Supervision (SIS) Act definition for Permanent Incapacity.
When TPD insurance is provided, a Member can generally only access this benefit if they meet:
- the Permanent Incapacity definition within the SIS Act; and
- the TPD definition under their insurance contract.
The definition of TPD under the insurance contract may differ from the definition of Permanent Incapacity under the SIS Act without contravening the SIS Act so long as the difference is not inconsistent with the conditions of release under SIS Reg 1.03C. For further information please refer to FAQ 68 on the APRA website.
What happens if a claimant suffers a recurrence of an illness or injury from a previous claim?
- Do they need to satisfy a new Waiting Period?
- Do they get a new Benefit Period?
- Is a new claim made each time?
A recurrent disability, as a policy clause, generally allows a claimant who has suffered a recurrence of an illness or injury the ability to claim again, if the recurrence happens within six months of the date the claimant was last entitled to receive a benefit.
The recurring disablement is considered a continuation of the previous claim and the claimant is not required to satisfy a new waiting period. As a continuation of the previous claim, the Benefit Period is continued from the date the last claim ceased, it is not a new benefit period.
If the recurrence happens outside the six month window due to the same or related illness or injury, the claimant will be required to satisfy a new waiting period. Generally, the remaining time of the benefit period will be paid subject to the terms of the policy. That is, if the claimant has a five year benefit period and had previously received benefits for two years, the maximum benefit period left for this illness or injury is three years.
A new claim does not have to be made each time.
Income Protection: Do Benefits Offsets reduce the benefit or only so that income received is limited to 75%
This is dependent on the terms of the Policy and varies. Some policies will only reduce a benefit by offsets if the total amount received by the claimant from all sources is greater than their agreed percentage of pre disability income (PDI). Other policies do not stipulate this and the offset will be applied regardless of the total amount received by the claimant.
|Default Sum Insured||$3,000 per month|
|Agreed % of PDI||75%|
|PDI||$7,000 per month (75% = $5,250)|
|Offsets||$1,000 per month|
Using the above example, dependent of the wording of the policy this claimant would either receive $2,000 or $3,000 from the insurer, dependent on the wording of the policy. This is because the sum insured plus the offsets is less than the agreed (75) % of salary and may or may not be applied.
What is TPD by installments?
This is a new innovation in TPD insurance, where a TPD benefit is generally paid to a claimant over time. That is, a claimant may be paid an initial TPD benefit (which is a portion of their sum insured) first, then the remaining balance, if they are still TPD a few years later.
Generally this will depend on the disablement and the definition of TPD the claimant meets. For instance, if they meet the ‘Everyday Working Activities’ definition at any point in time, they will receive their full TPD sum insurance up front, subject to the terms of the policy.