Help CentreNavigating TPD Claims and Superannuation: Understanding the Impact
If you're facing a serious illness or injury that prevents you from working, you may be eligible to make a Total and Permanent Disability (TPD) claim through your superannuation. Understanding how a TPD claim impacts your superannuation fund is essential to making informed financial decisions.
What Is TPD Insurance in Superannuation?
Many superannuation policies include TPD insurance, which provides a lump sum payment if you become totally and permanently disabled due to illness or injury. This payment is designed to help cover rehabilitation expenses, pay off debts, or replace lost income if you can no longer work.
How a TPD Claim Affects Your Superannuation
Making a TPD claim through your superannuation can have several financial implications, including:
1. Reduction in Superannuation Balance
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If your claim is approved, the benefit is typically deposited into your superannuation account.
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When you withdraw the funds, your overall super balance will decrease.
2. Tax Implications
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The TPD payout may be subject to tax, depending on your age, preservation age, and the taxable/tax-free components of your super.
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Tax treatment varies, and professional advice is recommended to understand your obligations.
3. Changes to Insurance Premiums
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TPD insurance premiums are usually deducted from your super balance.
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After a successful claim, your TPD insurance may cease, but life insurance and income protection premiums (if applicable) may continue, gradually reducing your super balance.
4. Impact on Super Contributions
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If you stop working due to a disability, your employer’s super contributions will cease.
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You may no longer be able to contribute to your fund, affecting its future growth.
5. Potential for Early Super Release
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In certain circumstances, you may qualify for early release of superannuation due to permanent incapacity, providing additional financial relief.
Making an Informed Decision
Understanding these factors is crucial when considering a TPD claim through your superannuation. Proper planning can help manage the financial impact and ensure long-term security.
Why Choose Claimsplus Lawyers?
✅ No Win, No Fee – You only pay if your claim is successful.
✅ Expert Legal Guidance – Our team specialises in superannuation and TPD claims.
✅ Seamless Process – We handle the legal complexities, ensuring a smooth experience.
At Claimsplus Lawyers, we specialise in guiding clients through the TPD claims process, ensuring you understand your entitlements and the impact on your super fund. Contact us today for expert legal advice tailored to your situation.
FAQs
1. How long does a TPD claim take?
The timeframe varies based on the insurer and complexity of the claim but generally takes 3 to 12 months.
2. Will my super be affected if I make a TPD claim?
Yes, a TPD payout reduces your super balance, and contributions may stop if you are no longer working.
3. Do I have to pay tax on my TPD payout?
Tax may apply depending on your age and how your super is structured. Professional advice is recommended.
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At Claimsplus Lawyers, we are dedicated to helping you secure the financial support you need. Reach out today for a free claim assessment.
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