TGB's Tim White analyses important cases relating to Total and Permanent Disability superannuation entitlements.
Personal injury lawyer Tim White analyses important cases relating to Total and Permanent Disability superannuation entitlements.
Some time ago I wrote this blog about how injured people can claim entitlements through their superannuation fund. Further, there have also been a number of important Court decisions that have considered a person’s entitlement to claim total and permanent disablement compensation (TPD) under a Superannuation Fund policy. The cases studies below are an important resource for any person who is making or considering a TPD claim, as they give some insight into the factors that the Superannuation Fund should consider when assessing a TPD claim.
Further, what is clear from these cases is that this is a very complex area of the law, one that is often decided based on the individual circumstances of the claimant, and due to the complexities involved it is highly recommended to seek the advice of a lawyer.
This was a matter that proceeded to the High Court of Australia, and the principal issue in the case concerned the duty of a trustee to give genuine consideration in the exercise of its powers when assessing a TPD claim. In this case total and permanent invalidity was defined as follows:
a. The member must have been continuously absent from all active work for a period of at least six months; and
b. In the opinion of the trustee after consideration of any information, evidence and advice provided to the trustee by the employer and any other information, evidence and the advice the trustee may consider relevant, the member has ceased to be an employee and is unlikely ever to engage in any gainful work for which the member is for the time being reasonably qualified by education, training or experience.
A central question related to whether or not the trustee, when considering the claim, simply had to exercise a discretionary power or whether the member had a beneficial interest, and therefore a higher level of investigation by the trustee was required.
The High Court concluded that:
“If the consideration is not properly informed, it is not genuine. The duty of a trustee to properly inform themselves is more intense in a superannuation trust. Further, the failure to seek relevant information in order to resolve conflicting bodies of material, as was the case here, is a breach of that duty”.
Among the important conclusions from this case is that now a Superannuation Fund or a trustee has a higher duty to make enquiries when considering a claim than they previously thought. Further, a decision will be reviewable if the trustee has not sought all relevant information that exists in order to resolve conflicting evidence.
The applicant here suffered significant lower back injuries, and was absent from work from early 2006, with his employment finally being terminated in late 2006. In 2009 he lodged an Application for a TPD benefit. The applicant put forward all relevant medical information. The employer did not provide or seek any relevant medical documentation. His claim for TPD was denied.
A number of important principles arose from this case including:
a. The time at which an assessment for TPD is to be made, is it the date of the employee’s termination from work;
b. The occupation or work to which the person may be reasonably suited by education, training or experience, includes part time employment and/or employment on a modified or restricted duties basis;
c. There is no obligation on the Superannuation Fund or the trustees to give reasons for the exercise of their discretion;
d. If the material under consideration by the fund or the trustee is deficient in any way, there is a duty on the fund or the trustees to make all appropriate further enquiries.
In this case, in order to be properly informed, the fund should have sought additional medical information before determining the TPD claim. There was also further information that should have been sought including:
a. The specific work duties the individual performed throughout his employment;
b. Any tickets or certificates the member had obtained previously;
c. Any particular licences, such as forklift driving etc that the member had;
d. The level of seniority he achieved in the employment;
e. The relevant in-house training programs he completed previously over his years of employment;
f. Any particular other skills or experience he had obtained;
g. Whether he was regarded as a competent and capable employee.
When determining whether he was able to fulfil the relevant TPD definition, it was important that not only medical evidence was considered, but the factors set out above as well. It was important that all relevant information was before the decision maker, so that they could make a fully informed assessment of whether or not the member met the criteria contained in the definition for TPD.
The worker was successful with the case, and the decision rejecting his claim by the fund was set aside. The fund then appealed the decision to the Full Court. The Full Court concluded that, “when a fund is faced with conflicting information, it is under a duty to seek information to resolve the conflict. The claimant does not bear any onus of proof and accordingly the fund has a responsibility for making enquiries if it is not satisfied with what the claimant has provided. The fund’s onus is not discharged simply by requesting, in general terms, that the claimant provide further information to support his application”.
In summary, again this was a further decision highlighting the considerable duty the fund or trustee has when assessing a TPD claim and further gives insight into the factors that must be considered when determining the likelihood of a person returning back to work in the future.
Dargan v United Super Pty Ltd & Anor (2011) NSW SC 1316
A central part of this case involved consideration of the phrase, “reasonably fitted by education, training or experience”.
The applicant claimed to be totally and permanent disabled from July 2007, when he fell and injured his back at work. At the time he was working as a removal assistant.
The relevant TPD definition was as follows:
a. The insured person has not been gainfully employed for more than a period of six months;
b. The insured person is unable to follow the usual occupation by reason of accident or illness, after considering the medical evidence, the trustee is satisfied it is unlikely that the insured is ever able to engage in any regular remunerative work for which he/she is reasonably fitted by education, training or experience.
At the time of considering his Application, Mr Dargan was working part time as a taxi driver. Subsequent to making his Application for a TPD claim, he applied for a licence as a taxi driver. So the Application for his licence as a taxi driver occurred more than six months after he had ceased work. He was also not working at the time of making the Application for TPD. However, by the time his Application was decided by the insurer, he was working about 15 to 20 hours per week as a taxi driver.
The case went on appeal to the Full Court, and it was decided that Mr Dargan’s work as a taxi driver was reasonably within his education, training or experience, as he had many years ago worked as a truck driver. The Court indicated that the fact that Mr Dargan had undertaken a short course to retain his certificate to work as a taxi driver, did not impact on his fitness for this type of work. Importantly, the Court also concluded that working part time did constitute regular remunerative work, as defined in the TPD definition of the policy. Provided the work was relatively uniform each week, it would generally be deemed to be regular remunerate work, even if on a part time basis.
In summary, from this case it is clear that part time work is likely to be considered regular remunerative work. Further, additional training or certificates a person undertakes subsequent to ceasing employment, will be a relevant factor to consider when determining what work a person is likely to able to undertake in the future and accordingly whether they fulfil the relevant TPD definition.
What are my options in challenging a decision denying my TPD claim?
There are various alternatives. One is applying to the Superannuation Complaints Tribunal for assistance in reviewing the decision of the Superannuation Fund, the other is taking Court proceedings through either the Magistrates Court or the District Court.
Proceeding through the Court system can be necessary, but usually involves a considerable period of time to resolve any matter. Accordingly it can be an expensive process.
My preference initially is to seek the assistance of the Superannuation Complaints Tribunal. There is no direct fee payable to the Tribunal. Further any decision made by the Tribunal is binding on the Insurer or Superannuation Fund, but is not binding on the individual making the Application. Accordingly, if the person is unhappy with the outcome, the decision of the Tribunal is not binding and they can then proceed to take Court action should they wish to do so.
However, recently there have been important changes to the time limits within which to make the Applications to the Superannuation Complaints Tribunal. It is important that these time periods are followed, otherwise the Tribunal will refuse to and cannot assist you.
For any decisions made by a Superannuation Fund after 1 July 2013, the Superannuation Complaints Tribunal can only assist you if:
1. If you have ceased employment, then your claim for TPD benefit was made to the fund within two years of you permanently ceasing employment, and your complaint to the Tribunal is made within four years of the trustee’s decision about your claim;
2. If you have not permanently ceased employment, your complaint is made to the Tribunal within six years after the Superannuation Fund has made a decision in relation to your claim;
3. If the fund’s decision was made before 1 July 2013, these time limits apply:
3.1 If you have permanently ceased employment, your claim for the TPD benefit was made to the trustee within two years of you ceasing employment, and your complaint to the Tribunal is made within two years of the fund’s decision about your claim;
3.2 In relation to the date of ceasing employment, it is the date that you were formally terminated, it is not the last day that you worked. On most occasions there can be a considerable gap between the last day that you worked and the date of your formal termination from work;
3.3 Further in relation to the date that the decision of the Fund, it is the first decision the Fund makes in relation to your claim, that is the relevant date. It is not any subsequent decision made by the Fund or any reviewed decision by the Fund.
These time limits are very important to be aware of and are strictly applied by the Superannuation Complaints Tribunal.
If you need assistance with a TPD claim or dispute, contact me for a free initial interview about your situation.