The Facts
Man suffers serious back injury shovelling earth at work
The complainant was a 61-year-old man who had obtained a higher school certificate and a TAFE certification in grounds, gardening and pool maintenance. He also had training in the hospitality, bar and bistro and security industries.
On 1 September 2000, the man commenced employment as a groundskeeper with the employer. He became a member of the employer’s superannuation fund.
On 20 March 2001 he suffered a back injury at work while shovelling earth into the back of a tipper truck.
He attempted to work following the injury, but due to intense pain was ultimately unable to do so.
The man sought treatment from a chiropractor and underwent a structured exercise program, but the pain continued.
On 16 October 2001, the employer terminated the man’s employment. He received workers compensation after this because of the seriousness of his injury.
The man subsequently tried to work in other capacities, but his pain was too intense to allow him to do this.
Insurer denies TPD claim and injured worker lodges complaint
In late 2012, the injured worker lodged a claim for total and permanent disability (TPD) with the insurer under his employer’s superannuation fund.
The fund’s policy covered the man for total and permanent disability if he was incapacitated to such an extent that he was unable ever to do work for which he was reasonably qualified by his education, training, or experience.
The insurer denied the man’s claim, concluding that he was not totally and permanently disabled.
The man lodged a complaint with the Superannuation Complaints Tribunal, arguing that the insurer’s decision was unreasonable and should be overturned.
It was up to the tribunal to decide if the insurer’s decision should stand.
Expert commentary on the court's decision
Superannuation Complaints Tribunal orders insurer to pay TPD claim
In a complaint heard by the Superannuation Complaints Tribunal against the insurer, AMP Life Limited, and the trustee of the employer’s superannuation fund, Host-Plus Pty Limited, the tribunal ruled in favour of the injured worker.
AMP was ordered to pay the TPD claim with interest.
Tribunal must determine whether insurer’s decision was fair and reasonable
Under section 37(6) of the Commonwealth Superannuation (Resolution of Complaints) Act 1993, the tribunal had to determine whether the decisions of the trustee and the insurer to deny the man’s TPD claim were fair and reasonable in their operation in the circumstances.
Insurer can reject TPD claim in cases of proven capacity to perform part-time work
Referring to two decisions by the NSW Court of Appeal, the tribunal agreed with AMP’s position that if proven, it was open to the insurer to rely on the injured worker’s capacity to undertake part-time work as a basis for denying his TPD claim.
The tribunal also agreed that the medical evidence before it established that the man had a serious back condition which potentially limited his work capacities to light or suitable duties.
Tribunal finds injured worker cannot realistically be expected to perform light duties
The tribunal noted that Australian caselaw requires the tribunal to consider whether there are “real jobs in the real world”.
Applying this test, the tribunal did not consider it realistic that the injured worker, with his medical history, would be able to establish himself in a job comprised solely of light or suitable duties.
The tribunal also noted caselaw confirming that the concept of work for which an insured person is reasonably fitted by education, training or experience directs attention to the insured’s work history to date:
The tribunal concluded that nothing in the facts before it indicated that the man was reasonably fitted by his education, training and experience for light or suitable duties.
The tribunal therefore determined that it was unfair and unreasonable of AMP to deny the man’s TPD claim, and ruled that AMP must accept the claim.
My experience representing the complainant
This case is of particular significance to me, as I represented the complainant.
I first met him when I was working as a financial counsellor at The Salvation Army.
Back then, my client was not aware that he had TPD insurance. However, he had been receiving workers compensation, and years of workers compensation certificates indicated that he could not return to his former duties.
One certificate added that he could possibly do some hours, for a few days a week, of light duties. The insurer pointed to this as proof that my client was “not totally incapacitated”.
How does the appeal process work when a TPD claim is rejected?
The appeal process requires that you first request that the insurer and superannuation trustee review their decision. So, we forwarded fresh medical evidence to them and requested a review.
In December 2017 we were notified that after the review the claim was still rejected.
With step 1 completed, we proceeded to step 2, and lodged an appeal with the Superannuation Complaint Tribunal in March 2018.
Meanwhile the Royal Commission was taking place, exposing wrongdoings by banks and insurers. AMP, the insurer in this case, was heavily criticised by the Royal Commission.
Considering this, I again approached both Host-Plus and AMP to ask if they wished to further review this case.
They advised me that a new, senior review panel was re-examining some troublesome cases, but again the claim was denied.
We then proceeded to the tribunal, where we were ultimately successful.
Although my client’s claim was for a relatively small amount of TPD (the average is usually around $100,000), it will have a huge impact on his life.
Review your financial position and make sure you have enough TPD cover
It’s important for people to review their financial position and to consider whether they have sufficient TPD cover to support themselves if they lose their capacity to earn.
The good news is that a case such as this one, where the insurer denied the claim, is the exception rather than the rule.
I have seen millions of dollars in TPD approved since I first gained experience with these insurances while working at The Salvation Army, and continuing once I joined Stacks.