Total and Permanent Disability Payout

“Its not the size of the dog in the fight that matters, it’s the size of the fight in the dog!!”

Mr S worked as an underground miner, and had done so for many years. During the course of his work he sustained a significant injury to his lower back.

Mr S approached our firm about making a WorkCover claim against his employer for their negligence. An out of court settlement favourable to Mr S was negotiated, the terms of which remain confidential.

Separate to his WorkCover claim, Mr S’s superannuation policy entitled him to make a claim for total and permanent disablement. If successful, he was entitled to a lump sum payment of $176,000.00. On our advice Mr S instructed us to lodge an application for total and permanent disablement (“TPD”). If successful, Mr S was not required to pay back his WorkCover damages. Mr S had everything to gain and nothing to lose!

Under Mr S’s policy TPD was defined as “having been absent from employment with his Employer through injury or illness for six consecutive months and in the opinion of the insurer after consideration of medical evidence satisfactory to the insurer having been incapacitated to such an extent as to render the Member unlikely to ever engage in or work for reward in any occupation or work for which he is reasonably qualified by education, training or experience.”

Mr S was absent for longer than six consecutive months. He satisfied that criteria. The insurer refused to pay Mr S on the basis that he was able to work in occupations that he was reasonably qualified for by education training or experience. On Mr S’s behalf we contested the insurer's refusal to pay, and the dispute went before the Superannuation Complaints Tribunal to be decided.

Prior to being injured Mr S had only ever worked in occupations that can only be described as being “heavy labouring” in nature, his most recent occupation being as an underground miner. All of the medical experts, including the insurers’ experts agreed that Mr S could not return to work as an underground miner, nor could he return to any work of the kind that he had performed previously because of his injuries.

The insurer tried to argue however that Mr S could be re-trained into lighter type work, and if re-training was successful, then he could return to paid employment. Julian McNamara our litigation partner prepared lengthy written submissions to the Tribunal making the point that Mr S’s entitlement to the lump sum payment did not depend on whether or not he could be re-trained into another occupation, but rather Mr S should be paid his lump sum entitlement because he was unlikely to ever engage in or work for reward in any occupation or work for which he is reasonably qualified by education training or experience.

The Tribunal agreed with Mr McNamara’s submissions, having this to say:

“The Complainants’ response submission deals with all of the points raised by the Insurer in some detail, both in terms of the facts and the interpretation of evidence, and also makes legal submissions. A summary of this very complete response submission would perhaps fail to do it justice, and accordingly one is not attempted. The whole response submission is on the record and has been considered by the Tribunal.”

The Tribunal went on to decide that “the decisions reached by the Insurer and Trustee (in refusing to pay Mr S) are unfair and unreasonable, and that their decisions should be set aside.”

The Tribunal ordered the Insurer pay to Mr S his full entitlement of $176,367.00, plus make payment to him of interest on that amount, compounded annually. The total payment to Mr S was close to $230,000.00, including interest of $54,624.48!

The Insurer would have saved itself from having to pay $54,000.00 in interest had they allowed Mr S’s claim in the first place.

This decision goes to show that if you have a legitimate entitlement, you should not allow the big guys to push you around. Remember, its not the size of the dog in the fight, but the size of fight in the dog! A win for the little guy against the big guys!!!!!

Skyring v National Mutual Tailored Superannuation Fund, SCT, 12 July 2005.