TPD Payout Guide

Map of Australia showing TPD Payout Coverage

How long does it take to get my TPD payout from a superannuation fund?

A TPD payout (Total and Permanent Disablement insurance payout) is generally finalised in 6-12 months. The wide range is due to differences in health conditions, insurance policies, evidence, superannuation funds and the insurance companies involved. 

The best way to ensure your claim is completed as fast as possible is to thoroughly prepare. Super Claims Assist takes the time to understand and document your situation with a free insurance claim check.

Does my TPD payout come all at once as a lump sum?

When your TPD insurance claim is one, your payout is deposited into your superannuation account. This usually happens all at once as a lump sum payment. At this point you can make a special withdrawal from your super account to access your TPD insurance entitlement. It’s important to know that you can make additional withdrawals but they could be taxed differently.

SunSuper TPD works a bit differently as it can pay out once a year for up to six years and you’ll need to apply each year to get the full amount.  Sunsuper policies that were active prior to 2016 may be different again so it’s worth checking what you are eligible for.

Learn more about how Sunsuper’s TPD and TPD Assist policies are different from most other Australian TPD policies on a free phone call.

Does a claiming TPD affect Centrelink Disability Support Pensions?

No! The two are completely separate and winning your TPD payout will not change your eligibility for a Centrelink DSP.

If you’ve been rejected for a Centrelink disability pension, you may be able to claim your superannuation’s TPD insurance.

Do you pay tax on a TPD payout from a superannuation fund?

Taxes vary by your age and situation. We recommend having a conversation with a financial advisor and your TPD lawyer who can help with your individual circumstances. Here are some general details so you can start that conversation about your TPD payout from a superannuation fund.

How much tax will I pay on the TPD payout from my superannuation fund?

Your TPD payout is deposited into your super account. There are special circumstances that allow you to withdraw a portion tax free after a successful superannuation insurance claim.

If you’re 60 or older, you don’t pay taxes on your TPD claim. If you’re under 60, how much tax you pay depends on your age and when you joined your superannuation fund.

If you’re younger than your preservation age, you can take out up to $225,000 without taxes. If you withdraw more, part of it is tax-free, and the rest is taxed at 22%.

Is it hard to get a TPD insurance payout?

Claiming your TPD insurance payout is a lengthy process with quite a bit of paperwork and technical requirements. Unfortunately most who try to claim without a specialist TPD lawyer get frustrated and give up or have their claim rejected. If you have heard about TPD insurance, our new claim support team can have a free phone chat to talk through the process and your situation.

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