Can You Claim WorkCover, TPD and Income Protection at the Same Time in Australia?
Many injured workers assume they can make only one type of claim after an injury or illness leaves them unable to work. However, depending on the applicable insurance policies and personal circumstances, it may be possible to claim workers compensation, income protection and Total and Permanent Disability insurance at the same time.
These benefits serve different purposes:
WorkCover or workers compensation provides weekly payments, medical treatment and other support following a work-related injury or illness.
Income protection insurance replaces part of your lost income while an injury or illness prevents you from working.
Total and Permanent Disability insurance, commonly known as TPD insurance, generally provides a lump-sum payment when an injury or illness permanently prevents you from working under the applicable policy definition.
Receiving one of these benefits does not necessarily prevent you from applying for the others. However, income protection payments are commonly reduced to account for workers compensation payments and certain other income you receive.
Can You Receive Income Protection While on WorkCover?
It may be possible to receive income protection payments while you are already receiving WorkCover or workers compensation weekly payments.
Income protection is designed to replace a percentage of the income you earned before your injury or illness prevented you from working. The percentage covered, maximum monthly benefit, waiting period and payment period will depend on the policy that applied when your incapacity began.
Many income protection policies contain offset provisions. This means the insurer considers payments received from other sources, including workers compensation, when calculating the income protection benefit.
You will not normally receive your full WorkCover payment plus your full income protection benefit. Instead, income protection may provide a top-up payment that helps bring your total income closer to the amount covered under your policy.
For example, if your income protection entitlement is $8,000 per month and WorkCover pays you $6,000 per month, the income protection insurer may pay approximately $2,000 per month.
The actual calculation will depend on:
Your pre-injury earnings.
Your insured monthly benefit.
The amount paid by WorkCover.
The percentage of income covered by your policy.
The policy’s offset provisions.
Any maximum benefit limits.
Your waiting and benefit periods.
Any other income received.
It is not automatically a simple arrangement where WorkCover pays 80% and income protection pays the remaining 20%. Every claim must be calculated under the relevant policy.
When Income Protection May Close the WorkCover Gap
Workers compensation schemes calculate weekly payments using your pre-injury earnings, but maximum weekly payment caps generally apply.
This can create a significant income gap for people who earned more than the maximum amount covered by the workers compensation scheme.
A worker may have earned $12,000, $15,000 or more each month before their injury, but their WorkCover payments may be restricted by the statutory maximum. Even when receiving the highest available weekly WorkCover payment, the worker may still receive only half, or even less, of their former income.
Income protection insurance often has a higher monthly maximum than WorkCover. It may therefore help close the gap between:
The worker’s pre-injury earnings.
The WorkCover maximum payment.
The amount covered under the income protection policy.
Income protection may provide a top-up where:
The worker held valid cover when the incapacity began.
The insured monthly benefit is higher than the WorkCover payment.
The worker meets the policy’s definition of incapacity caused by injury or illness, including a workplace injury where applicable.
The applicable waiting period has been completed.
The worker continues to provide the required medical evidence.
The policy permits a payment after workers compensation offsets are applied.
The insured amount shown on a superannuation statement is generally the maximum potential monthly benefit. It does not necessarily mean the full amount will be paid on top of WorkCover.
My Personal Experience With WorkCover and AustralianSuper
In my own case, I was receiving NSW workers compensation payments through the icare system.
Before my workplace injury, I was earning approximately $12,500 per month.
Because my earnings were above the NSW workers compensation maximum, I did not receive anything close to my full pre-injury income. I was receiving approximately $6,500 per month from WorkCover, even though I was being paid at or near the maximum NSW weekly payment rate.
I also had income protection insurance through AustralianSuper, with a maximum monthly benefit of approximately $10,000.
The income protection insurer did not pay an additional $10,000 per month on top of my WorkCover payments. The insurer took the workers compensation payments into account and calculated the difference payable under the income protection policy.
I eventually received approximately $57,000 as a backdated lump-sum income protection payment, covering part of a two-year benefit period.
The payment helped make up some of the difference between my WorkCover payments and the amount payable under my income protection cover.
My experience shows why injured workers should investigate their superannuation insurance even when they have already received WorkCover payments for several years.
However, this does not mean every injured worker will receive the same result. The calculation will depend on the person’s earnings, insurance cover, waiting period, benefit period, WorkCover payments, medical evidence and policy terms.
Can You Make a Retrospective Income Protection Claim?
In some circumstances, an income protection claim may still be investigated several years after a person stopped working or after their insurance cover was cancelled.
One of the most important questions is whether the person held valid income protection insurance on the date their injury or illness first caused them to become unable to work.
A later cancellation of the cover does not necessarily remove an entitlement that arose while the insurance was active.
A retrospective claim may be possible where:
The insurance was active when the incapacity began.
The person met the policy requirements at that time.
The waiting period was completed.
The person remained unable to work during the claimed period.
Medical evidence supports the incapacity.
Employment and financial records establish the person’s pre-injury earnings.
WorkCover payment records are available so offsets can be calculated.
In my case, I applied approximately five years after first going onto WorkCover. My income protection cover had already been cancelled for around three years, but the claim was investigated based on whether I qualified while the policy was active.
This is why injured workers should not automatically assume that it is too late to make a claim. Contact the superannuation fund or insurer and ask them to investigate the cover that existed when the incapacity began.
Retrospective claims can be more complicated because older medical, employment and financial records may be difficult to obtain. It is important to gather as much evidence as possible.
Can You Also Claim TPD?
A TPD claim is different from an income protection claim.
Income protection generally provides monthly payments for a defined benefit period while an injury or illness prevents you from working.
TPD insurance generally provides a lump-sum payment where an injury or illness permanently prevents you from returning to work and you meet the definition contained in the policy.
You may potentially make a TPD claim while receiving:
WorkCover weekly payments.
Income protection payments.
Workers compensation medical treatment.
Rehabilitation assistance.
Other eligible insurance benefits.
A successful WorkCover claim does not automatically establish that you qualify for TPD. Similarly, receiving a TPD payment does not automatically determine your ongoing workers compensation entitlements.
Each claim is assessed separately under different laws, policy definitions and evidence requirements.
A TPD insurer may consider:
The nature and severity of your injury or illness.
Your medical evidence.
Your current and likely future work capacity.
Your previous employment.
Your qualifications, training and experience.
Any unsuccessful return-to-work attempts.
Whether you are reasonably likely to return to suitable employment.
The exact TPD definition contained in the policy.
The policy definition that applied when you stopped working is critical. Do not rely only on the current insurance terms displayed by your superannuation fund.
Can a TPD Payment Affect Income Protection?
A TPD payment may affect income protection, depending on the terms of the policy.
Some policies may allow income protection payments to continue after a TPD claim is approved. Other policies may reduce or stop future income protection payments once the TPD benefit is paid.
In some circumstances, the payment of a TPD benefit may cause the income protection cover to end. However, the person may still have an entitlement to unpaid or backdated income protection benefits for a period when the cover was active.
Before finalising a TPD claim, ask the superannuation fund or insurer:
Will payment of my TPD benefit stop my income protection payments?
Can I still claim backdated income protection for an earlier period?
Will the TPD payment be offset against my income protection entitlement?
Should my income protection claim be assessed before my TPD claim is finalised?
Will the insurer seek to recover any alleged overpayment?
What happens to my remaining insurance cover after the TPD payment is made?
Ask for the answers in writing and keep copies with your claim records.
What Evidence May Be Required?
WorkCover, income protection and TPD claims may each require different forms of evidence.
You may be asked to provide:
Medical certificates.
Certificates of capacity.
General practitioner reports.
Specialist reports.
Psychologist or psychiatrist reports where relevant.
Hospital and treatment records.
WorkCover payment statements.
Payslips.
Tax returns.
Notices of assessment.
Employment contracts.
Bank statements.
Superannuation statements.
Insurance certificates.
Insurance guides or policy documents.
Evidence showing the date you last worked.
Evidence of unsuccessful return-to-work attempts.
Details of your education, training and employment history.
Information about any other income or insurance payments received.
For a retrospective income protection claim, the insurer may require evidence covering the entire benefit period being claimed.
This may include historical medical reports and confirmation that you continued to meet the policy requirements throughout that period.
Check Every Superannuation Account
Many Australians have held more than one superannuation account because they changed employers, industries or occupations.
Each account may have included different insurance benefits, such as:
Income protection.
Salary continuance insurance.
TPD insurance.
Death insurance.
Death and disability cover.
Do not check only your current superannuation account.
Ask every former superannuation fund whether you had insurance on the date your injury or illness first prevented you from working.
Look through old statements for deductions described as:
Insurance premium.
Income protection.
IP cover.
Salary continuance.
TPD.
Death and TPD.
Death and disability insurance.
Cover may have ended later because of inactivity, insufficient contributions, age limits, a low account balance or the payment of another insurance benefit. However, a later cancellation may not prevent a claim relating to an earlier insured period.
Questions to Ask Your Superannuation Fund or Insurer
Contact each fund or insurer and ask:
Did I have income protection or TPD insurance on the date my injury or illness first caused me to stop working or become medically unable to work?
You should also request:
The amount of cover held at that time.
The date the cover commenced.
The date the cover ended.
The applicable waiting period.
The applicable benefit period.
The policy definition of incapacity.
The applicable TPD definition.
The workers compensation offset provisions.
The insurance guide or policy that applied on the relevant date.
The required claim forms.
Information about making a retrospective claim.
Make sure the fund investigates the insurance that applied on your original date of incapacity, rather than looking only at the cover currently shown on your account.
Always Disclose Your WorkCover Payments
You must accurately disclose your WorkCover payments and any other income to your income protection insurer.
Failing to report other payments may result in:
An overpayment.
A demand to repay money.
Reduced future benefits.
Delayed payments.
Suspension of the claim.
A dispute with the insurer.
Keep copies of your WorkCover payment statements and notify your income protection insurer whenever your weekly compensation rate changes.
The income protection insurer may periodically recalculate the amount payable based on changes to your WorkCover payments or other income.
The Key Message
Receiving WorkCover does not necessarily prevent you from claiming income protection or TPD insurance.
Income protection may provide a top-up between your workers compensation payments and the amount covered under your income protection policy.
This can be particularly important for higher-income workers whose WorkCover payments are restricted by a statutory maximum payment cap.
TPD may provide a separate lump-sum payment where an injury or illness permanently prevents a person from working and the applicable policy requirements are satisfied.
The most important steps are to:
Identify every superannuation account you have held.
Confirm what insurance existed when your incapacity began.
Obtain the insurance policy that applied at that time.
Check the workers compensation offset provisions.
Ask whether a retrospective income protection claim is possible.
Consider how the timing of a TPD claim could affect income protection.
Gather your medical, employment, tax and WorkCover records.
Obtain professional advice about your individual circumstances where necessary.
Disclaimer
This article provides general information based partly on personal experience. It is not legal, financial, taxation, medical or insurance advice.
Workers compensation laws and insurance policies differ between jurisdictions, superannuation funds, insurers and individual claims. The outcome of any claim will depend on the policy terms, evidence and personal circumstances.
Always obtain advice relevant to your situation and carefully review the insurance policy that applied when your injury or illness first caused you to become unable to work.
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