How to Claim Superannuation in Australia

Whenever someone in Australia begins working, a portion of their salary is deducted from their paycheck and placed into a retirement fund. This system is called superannuation.

But did you know that your superannuation also entitles you to insurance benefits that you can claim without dipping into your super balance?

In this article, we’ll answer the most frequently asked questions (FAQs) regarding how to claim  superannuation, as well as explain the processes and guidelines that claimants should follow.

Below are the key takeaways that you will learn from reading this article.

• How superannuation insurance works
• The different types of superannuation insurance policies
• When you can make a superannuation claim
• How to make a superannuation claim
• How long it takes to process a superannuation claim

Firstly, what is superannuation?

Superannuation (sometimes referred to as simply “super”) is Australia’s long-term retirement investment system.

Here’s how it works. 

Whenever you begin working in Australia, you are required by law to choose a super fund, into which your employer will contribute a portion of your earnings. The super fund will then invest those contributions to grow your retirement fund.

Once you reach preservation age and meet other release conditions, you can withdraw lump sum amounts or receive regular payments from your superannuation, like a pay check. This will allow you to retire from working and still earn a living.

What is superannuation insurance?

Super funds provide contributors with several benefits, and insurance is one of those perks. Workers in Australia are automatically enrolled in superannuation insurance once their fund reaches $6,000 and they are over the age of 25.

How does superannuation insurance work? 

When you start working and choose a super fund for your retirement, you will be immediately enrolled into a default insurance plan with no health checks. You can check (or upgrade) your level of cover, policies, and benefits by logging into the super fund’s online portal, reading their product disclosure statement (PDS), or calling them directly.

Insurance premiums are deducted from your super balance. However, if you make a claim, it will be paid out from the insurance policy, not your retirement fund. This means you can enjoy your benefits without draining your superannuation.

In the event that you need to make a claim on your insurance through your super, your first step should be to contact your super fund. They will provide you with the forms you need to fill out and tell you what information they require to process your claim. 

What does superannuation cover?

Superannuation covers you and/or your beneficiaries in the following scenarios:

• You are injured or fall ill, thus becoming temporarily disabled and unable to return to work for a period of time.
• You become totally and permanently disabled, thus never being able to work again.
• You pass away or become terminally ill.

What are the different types of superannuation claims? 

Here are the different types of claims you may be able to make on your superannuation insurance policies, depending on what your super fund offers:

• Total and permanent disability: This claim provides you with a lump sum payout if you’re unable to return to work, ever.
• Income protection: This claim replaces a percentage of your income that you’re losing while you’re temporarily disabled and unable to work.
• Death benefit: This claim is for a lump sum payout or income stream to your beneficiaries in the event of your death. 
• Terminal illness: This claim provides a lump sum payout or stream of income to your beneficiaries in the event that you become terminally ill.
• Trauma: This claim pays a lump sum to help you cover certain medical conditions (including cancer, strokes, and heart attacks) or surgeries.

What are the different types of superannuation insurance? 

There are three main types of insurance that super funds typically cover: death benefit, income protection, and total and permanent disability (TPD). But there are other types, as well. We define them all below. 

• Total and Permanent Disability (TPD) Insurance: This insurance policy provides a monetary benefit to claimants who can prove that they have a total or permanent disability that prevents them from returning to work at any point in the future. 
• Income Protection Insurance: This type of insurance protects workers who, due to an injury or illness, are temporarily unable to work. 
• Death Benefit Insurance: This policy pays the insured party’s beneficiaries in the event of the insured’s death or terminal illness. 
• Trauma Insurance: This insurance provides a payout to workers who suffer from a certain health condition or must undergo a certain type of surgery. The insurer decides which health conditions and surgeries to cover.

Who can make a superannuation claim?

Australians who meet the following requirements can make a superannuation claim:

• They must have started a superannuation with a super fund.
• They must have superannuation insurance.
• They must be under the age of 65 to make a TPD super claim and under the age of 70 to file a death benefit super claim.

There are two situations where a worker will not be automatically enrolled in insurance under their super fund, meaning they can’t make a claim.

• If they are under the age of 25.
• If they have less than $6,000 in their superannuation.

There are, of course, exceptions to those rules. For example, workers who are under the age of 25 or have less than $6,000 in their retirement fund can contact their super fund directly to request insurance. Their super fund may also choose to cover them if they work in a dangerous, high-risk job.

Furthermore, if a worker has already been enrolled in superannuation insurance, and their super balances fall below $6,000 afterwards, they won’t lose their coverage.

Finally, super funds cancel insurance on super accounts that workers have not contributed to in 16 months. After that, you would not be able to make a claim. 

When can I make a superannuation claim?

You can claim your superannuation as soon as you are injured,  become sick or disabled. 

How do I claim superannuation in Australia? 

Below are the steps that Australians should follow to make a claim on their superannuation insurance.

Step One: Contact your super fund

Call your super fund by phone to let them know that you want to make a claim on your superannuation insurance. Be sure to tell them what type of claim you want to make (i.e., TPD, income protection, etc.).

Step Two: Provide all the documentation your super fund insurer requests

Your super fund’s insurer will tell you what information and documentation they need to assess and approve your claim. They may, for example, ask for:

• Medical reports from your physician that prove your claim.
• Financial statements, pay stubs, and tax returns to prove your pre-claim income.
• Death certificate, if the claimant has passed away and their beneficiaries are claiming the death benefit.

Step Three: Wait for your claim to be processed

Once you have filed your claim and submitted all the required information, the next step is to wait for the insurer to make a decision. If your claim is approved, you will receive a lump sum payout or monthly benefits. If it’s denied, you may be able to appeal the verdict with the help of a lawyer.

How long does it take to process a superannuation claim?

The length of time it takes to process a superannuation claim varies. Some claims may take only a few weeks to be approved or denied. TPD claims in particular can take anywhere from 3-18 months or longer to finish.

Furthermore, if you’re submitting an income protection claim, you may have to wait an additional period of a few weeks or months before you start receiving your monthly benefit. This is called the wait period, and the length of it is defined in your policy.

Do I need a superannuation lawyer to make a claim? 

You don’t have to hire a lawyer to make a superannuation insurance claim. But if you engage the help of professionals like LHD Lawyers, the process is made so much easier. We will use our experience and expertise in insurance legislation to determine if you have a valid claim. From there, we will set up a plan of action, so that you can get the compensation you deserve. 

If you think you have a superannuation claim, LHD Lawyers can help everyday Australians receive the benefits they’re entitled to. Call 1800 455 725 for a no-obligation consultation about your case.

Author: James Bodel