Obtaining a TPD payout can make an enormous difference in the lives of disabled persons. Total and Permanent Disability compensation can provide short- and long-term financial relief.
We’ve written about the process of claiming TPD and what it takes for a payout to be approved. It is just as important to know what options you have after receiving a lump sum payment.
TPD Compensation Lawyers provide expert assistance to claimants in Melbourne and throughout VIC. Call us at 03 9966 7188 for a FREE consultation.
How Do I Get a TPD Payout?
First, you should consult a knowledgeable TPD lawyer. Legal counsel is often essential for maximising your TPD payout.
An experienced lawyer can help you navigate the process of lodging a claim. This includes:
1. Understanding the TPD Eligibility Criteria
Each insurer has a different definition of Total and Permanent Disability. You will need to meet the criteria set by your insurance company to receive a payout.
The eligibility requirements for TPD can be difficult to understand on your own. A qualified lawyer can assess the situation, review your insurance cover, and cut through the legalese to explain your entitlement.
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2. Gathering Documentation
You will need thorough documentation of the injury or illness that prevents you from working. This includes:
- Medical records
- Specialist reports
- Diagnostic test results
- Employment history
- Financial information
3. Attending Medical Assessments
The TPD application must include a minimum of two statements from qualified medical practitioners confirming that you have a Total and Permanent Disability. You’ve likely seen one or more doctors already, but it will be necessary to have your disability confirmed in accordance with the insurer’s requirements.
4. Submitting the Application
Work with your lawyer to fill out the necessary paperwork and other aspects of the application. Incomplete applications are among the most common reasons TPD claims get rejected, so it is important to do it right the first time.
5. Awaiting the Decision
Once your TPD claim has been reviewed, the insurer or superannuation fund will make a decision regarding your eligibility for a TPD payout. If your claim is approved, you will receive a lump sum payment.
How Much Will I Get?
The value of a TPD claim depends on both the available insurance cover and the type of policy you have. Insurers may also take into account the nature and severity of the disability.
You may be able to obtain additional compensation if you have multiple TPD policies. A TPD claims lawyer can evaluate your insurance cover and help you pursue payouts from any and all insurers you have policies with.
Your Choices After a TPD Payout
Generally speaking, the TPD entitlement is paid as a lump sum into your superannuation account. You have immediate access to the funds, but it is important to take stock of your financial situation before making any decisions.
The options you have once a TPD payout is received include:
1. Leaving the Funds in Your Super Account
If you leave the funds in super, you will not have to pay taxes on the TPD compensation you receive. You can withdraw money at any time, but tax will be assessed on withdrawals prior to the preservation age (usually 55–60 years old). Benefits can be accessed tax-free once you reach the preservation age.
2. Withdrawing Some or All of the Funds
A TPD payout may represent a financial windfall for those with a Total and Permanent Disability. By definition, those who qualify for TPD are unable to work. The lack of income can lead to significant financial strain.
Many people have plans for the money they receive through a TPD claim. This may include:
- Paying off debts: Funds from a TPD benefit can be used to pay off medical debt, credit card balances, personal loans, etc.
- Covering costs: A TPD entitlement can take the place of income to help you pay for everything from day-to-day expenses to the cost of medical care.
- Establishing an emergency fund: Building an emergency fund is essential for unexpected expenses or emergencies that may arise in the future. This is especially important for people with chronic medical conditions and other issues that make it impossible to work.
Understanding your financial obligations will help you make informed choices about how to allocate your TPD payout. Professionals such as TPD lawyers and financial advisors can help.
It is important to have a plan for the money you get from TPD. Most people with a Total and Permanent Disability won’t be able to return to work. The money in your super may be your primary means of financial support, so it is important to use it wisely.
3. Creating an Income Stream
After your TPD claim is approved, you can withdraw a portion or the entirety of the balance in your super account. You also have the option of setting up regular payments from super. This is known as an income stream.
Income stream payments are similar to receiving a pension. They are also subject to a tax offset, which reduces the amount of tax owed on the money you receive. However, it is important to note that an income stream can impact the payments you receive through Centrelink.
Read More: Does a TPD Payout Affect Centrelink?
Get the TPD Payout You Deserve
TPD Compensation Lawyers represent clients on a No Win, No Fee basis. Clients pay nothing upfront and only have to pay fees if the matter is successful. This agreement ensures that you don’t have additional financial stress at an already challenging time.
Our lawyers are committed to obtaining the maximum TPD payout. We can counsel you throughout the process of applying for TPD, as well as provide valuable advice when and if your claim is paid.