TPD Claims on Super: Essential Info You Need

Navigating TPD Claims and Superannuation: Understanding the Impact

If you're facing a severe illness or injury that prevents you from working, you might consider filing a Total and Permanent Disability (TPD) claim through your superannuation. Understanding how such a claim can impact your superannuation fund is essential.

TPD Insurance Within Superannuation Policies

TPD insurance is commonly part of superannuation policies. Should you become totally and permanently disabled due to an illness or injury, this insurance offers a lump sum payment. This amount is intended to assist with rehabilitation expenses and debt repayment or to serve as income if your ability to work is compromised.

Understanding the Impact on Your Superannuation

Filing a TPD claim can have several effects on your superannuation, including:

1. Reduction in Superannuation Balance: A successful TPD claim leads to the benefit being deposited into your superannuation account. Upon withdrawing this amount, the overall balance of your superannuation fund decreases.
2. Tax Implications: The TPD payout might be subject to taxes, which vary based on factors like age and the components of your superannuation (tax-free and taxable).
3. Changes in Insurance Premiums: Premiums for TPD insurance, typically deducted from your super balance, may stop post-claim. However, premiums for other insurance types, such as life or income protection, might continue, gradually reducing your super balance.
4. Effect on Super Contributions: If your disability leads to a halt in work, both your and your employer's contributions to your superannuation may cease, affecting the fund's growth potential.
5. Possibility of Early Super Release: In certain situations, you might also qualify for early access to your superannuation on grounds of permanent incapacity.

Considering these factors when contemplating a TPD claim through your superannuation is crucial. Understanding the implications can help you make an informed decision.

At Claimsplus Lawyers, we're here to assist you in comprehending the nuances of making a TPD claim on your superannuation. Our experts can guide you through the process, ensuring you know how it affects your superannuation fund. Don't hesitate to contact us for detailed advice tailored to your specific situation. 

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