General Income Protection Total Permanent Disability Workers Compensation

Posted on 13 Oct 2025

Disability Payouts in Australia: Complete Guide to TPD, DSP & Workers Comp

What can I claim if I’m permanently unable to work?

If your condition permanently impacts your ability to work, you may be eligible for a Total and Permanent Disability (TPD) payout.

Total and Permanent Disability (TPD) payouts

A TPD payout is a superannuation disability benefit that provides lump-sum financial help if you’re permanently unable to work because of an injury or illness. It doesn’t matter where your injury happened or what caused it.

Most Australians automatically have TPD insurance through their superannuation, so you could be entitled to a payout without even knowing it. Below, we answer some of the most common questions about TPD claims. You can also explore our complete guide to TPD compensation for more in-depth information.

What conditions qualify for a TPD payout?

You may be eligible for a Total and Permanent Disability insurance payout if you’ve been diagnosed with a condition that permanently affects your ability to work. Some of the most common conditions include:

Heart conditions.
Back injuries.
Chronic illnesses, including arthritis, diabetes and asthma.

Cancer.
Autoimmune diseases.
Degenerative neurological conditions, including Alzheimer’s and Parkinson’s.

This isn’t a complete list, just some of the most common conditions we’ve helped clients claim TPD for. Whether your condition qualifies ultimately depends on how permanent disability is defined in your insurance policy.

If you’re unsure whether you’re eligible for a disability payout, reach out to our expert TPD lawyers. We offer free advice on your eligibility and can guide you on the best strategy to secure your TPD payout as quickly as possible.

Can I claim TPD for a mental health condition?

Yes, you can make a TPD claim for any mental health condition that permanently prevents you from working. This may include:

Anxiety.
Major Depressive Disorder.
Post-Traumatic Stress Disorder (PTSD).

Complex PTSD.
Schizophrenia.
Bipolar Disorder.

Claims for mental health-related TPD are often more complex than physical injury claims, requiring a strategic, evidence-based approach that fits your super policy. That’s where our specialist TPD lawyers help.

We go beyond generic forms, building a clear case that shows how your condition actually affects your ability to work. For example, it’s not enough to say you have anxiety or depression — your claim needs to show exactly how it impacts daily tasks, meetings, or interactions, with support from treating doctors and medical experts.

Insurers often argue that mental health conditions improve over time, suggesting you don’t meet your policy’s TPD definition. We counter this with vocational assessments and evidence of your long-term prognosis, showing why returning to your previous job isn’t possible.

Whether you’ve already stopped working or are considering it, we can assist. Head to our complete guide to mental health TPD claims or speak to our expert TPD lawyers today for tailored advice.

Can I claim TPD if I’m still able to do some work?

It’s a common misconception that you need to be completely incapacitated or bedridden to make a TPD claim. In reality, some policies only require proof that you can’t return to the kind of work suited to your education, training or experience.

For example, if you’ve worked your entire career in construction and your injury prevents you from performing physical labour, you may still qualify for a TPD insurance payout — even if you could theoretically work in an office.

If you’ve stopped working because of a disability, or you’re thinking about doing so, our lawyers can help. Unlike many firms that treat TPD as a side service, our dedicated TPD team specialises exclusively in these claims. They understand exactly how to interpret your policy, gather the right medical evidence, and prepare a strong case. This ensures you get your TPD payout as quickly and smoothly as possible.

Start your free online claim check

Find out if you’re eligible for a TPD payout today.

Check your claim nowIt only takes 2 minutes.

What can I claim for a temporary disability?

If your disability means you can’t work for a while, you may be able to access financial support through the Disability Support Pension, income protection, or workers compensation. Let’s take a closer look at how each of these options can help while you’re off work.

The Disability Support Pension

The Disability Support Pension (DSP) is a government payment that provides income support if you’re unable to work due to an injury, illness, or permanent disability. It’s designed to help you cover essential living costs when you can’t earn a regular income.

As a general guide:

A single person with no income can receive up to $1,178.70 per fortnight.
Couples can receive up to $888.50 each or $1,777.00 combined.

These figures are correct as of 2025 and are adjusted each year to keep up with inflation. You can learn more at the Service Australia disability payout calculator.

To qualify for a DSP payout, you’ll need to meet both medical and non-medical eligibility requirements.

There are two ways to meet the DSP medical rules: through the manifest medical rules or the general medical rules.

Manifest medical rules

You automatically qualify under these rules if any of the following apply:

You are permanently blind.
You require nursing home–level care.
You have a terminal illness with a life expectancy of less than 2 years.
You have an intellectual disability with an IQ below 70.
You have category 4 HIV/AIDS.
You receive a Department of Veterans’ Affairs Disability Compensation Payment at the Special Rate (Totally and Permanently Incapacitated) under the Veterans’ Entitlement Act 1986.

General medical rules

If you don’t meet the manifest medical requirements, you can still qualify under the general rules if you meet all of the following:

Duration: Your condition is likely to last more than 2 years.
Diagnosis: Your condition must be diagnosed, reasonably treated, and stabilised.
Impairment: You have an impairment rating of 20 points or more. This is assessed by Services Australia.
Program of support: You meet the Program of Support rules. This is only relevant if you have an impairment rating of less than 20 points.
Work capacity: Your condition prevents you from working at least 15 hours a week within the next two years.

To qualify for the DSP, you must also meet certain age, residency, income, and asset rules:

Age: You must be at least 15 years and 9 months old, and under the Age Pension age when you apply.
Residency: You must live in Australia, be physically present when applying, and be an Australian resident.
Income test: As of 2025, you can’t receive the DSP if you’re over 21 and earn more than $2,575.40 per fortnight (or $3,934.00 combined for couples). You can still receive reduced payments if your income is below these limits.
Assets test: In 2025, the asset limits are:
- Single homeowner: $321,500.
- Single non-homeowner: $579,500.
- Couple homeowners: $481,500 (combined).
- Couple non-homeowners: $739,500 (combined).

It’s worth noting that there are exceptions to some of these rules. For example, you may not need to complete income or asset tests if you’re permanently blind. And if you’re experiencing severe financial hardship, you might still be eligible for support even if your assets exceed the usual limits.

Income protection disability payout

Income protection is a type of superannuation disability payout that provides financial support if you’re temporarily unable to work due to illness or injury.

With income protection, you’ll generally receive:

Up to 75% of your regular income, including super (usually paid monthly).
Payments for a set period, such as 2 years, 5 years, 10 years, or until you reach retirement age

The best part? Many people already have income protection without realising it. It’s often included in your superannuation policy, though some people take out their policy directly through an insurer or bank. To check whether you’re covered, contact your super fund or insurer and ask for details of your insurance policy.

Once you’ve confirmed you have cover, it’s important to understand what affects your eligibility to claim. This can depend on your policy terms, including any exclusions or limitations. For example, policies that don’t cover pre-existing conditions or restrict certain types of injuries or illnesses.

If you’re unsure whether your policy covers your disability or need help making a claim, we can help. Our income protection lawyers can review your policy, explain your options clearly, and handle your claim on your behalf — all free of charge.

Workers compensation disability payout

Workers compensation acts as your financial safety net if you’re injured at work or because of your job. Depending on where you live, you might also hear it called ‘WorkCover’.

Unlike other types of disability payouts, a workers comp disability payout is only available for work-related injuries or illnesses. The good news? It doesn’t matter if you’re full-time, part-time, or casual — or even if the accident was your fault.

Every workers compensation claim can include these basic benefits:

Weekly wage-replacement payments (up to 95% of what you previously earned).
Hospital and medical costs.
Cover for rehab and return-to-work support.
Travel expenses between your medical appointments.

If your disability causes lasting problems, you could be entitled to extra compensation. And if your employer’s mistake or negligence led to your injury, you may receive a substantial disability payout. We’ll explain how this works in the next section.

Start your free online claim check

Find out if you’re eligible for a workers compensation disability payout today.

Check your claim nowIt only takes 2 minutes.

What other disability payouts could I receive?

If you injured yourself because of work and your disability causes long-term issues, you may be entitled to extra compensation on top of your basic workers comp payments:

If your injury leaves you with a lasting disability or long-term health issue, you could be entitled to an extra lump sum. This usually requires a Whole Person Impairment (WPI) assessment, which measures how your disability affects your daily life and overall functioning.

Some states have a minimum WPI threshold you must meet to qualify, so it’s important to check the rules in your area.

State	Minimum WPI threshold
New South Wales	• Physical injuries: 11% • Psychological injuries: 15%
Victoria	• Spinal injuries: 5% • Other physical injuries: 10% • Psychological injuries: 30%
Queensland	0%
South Australia	• Physical injuries: 5% • Psychological injuries: no lump sum available
Western Australia	0%
Tasmania	• Physical injuries: 5% • Psychological injuries: 10%
Northern Territory	5%
Australian Capital Territory	0%

To learn more about workers comp permanent impairment payments, head to our in-depth guide.

If your injury was caused by your employer’s negligence — such as unsafe work conditions, poor training, or a lack of proper equipment — you may be entitled to a common law damages claim. These claims can lead to significantly higher compensation than standard workers compensation benefits, sometimes reaching hundreds of thousands (or even millions) of dollars.

On top of your basic workers comp benefits, you could also receive:

Future lost income and superannuation: If your disability prevents you from returning to your usual job.
Ongoing medical and rehabilitation costs: Covering specialist treatment, therapy, and long-term support services.
Pain and suffering: Recognition for the emotional and physical impact of your injury, available in certain states.

How is pain and suffering compensation calculated?

Pain and suffering payouts are more complex than other parts of a compensation claim because they’re based on personal impact, not just financial loss. Courts look at how your injury has changed your daily life, rather than just your medical bills or time off work. This might include things like your ability to work, socialise, and enjoy normal activities.

In most states, you’ll need to meet a minimum impairment threshold before you can claim for pain and suffering. An independent medical specialist will assess your level of permanent impairment and assign a rating. This may be referred to as WPI (Whole Person Impairment), ISV (Injury Scale Value) or, in some states, Most Extreme Case (MEC).

The higher your impairment rating, the larger your potential payout. However, each state also has its own rules and maximum limits for pain and suffering compensation.

State	Requirements for claiming pain and suffering compensation	Maximum compensation for pain and suffering
NSW	At least 15% of the Most Extreme Case (MEC).	$761,500
QLD	Injury Scale Value (ISV) of 1 or higher.	No cap except for workers compensation claims ($442,195)
VIC	At least 5% Whole Person Impairment (WPI) for physical injuries or 10% WPI for psychological injuries.	$713,780
SA	The injury must have impacted you for over 7 days or your medical expenses reach the ‘prescribed amount’ (currently $7,440).	$478,500
WA	At least 5% WPI and meet the minimum claim value (currently $25,500).	No cap
TAS	Minimum claim value must be met (currently $7,000).	No cap
ACT	None	No cap

Is my disability insurance payout taxable?

Whether a disability insurance payout is taxable depends on the type of payment you receive:

Lost income: Payments that replace your salary are generally taxable, just like your regular income.
Medical expenses, ongoing care, and pain and suffering: These are meant to cover your physical, emotional, or financial losses and are usually tax-free.

For Total and Permanent Disability (TPD) claims, payouts are generally tax-free if they come from your superannuation. However, the exact tax treatment can vary depending on your age and how your super contributions are structured.

One thing to keep in mind: if you invest your lump sum payout and earn interest or returns, that income is taxable.

To fully understand how tax applies to your situation, it’s always best to speak with a financial advisor or your lawyer before making decisions about your disability payout.

Does a TPD payout affect my disability pension?

A TPD payout will not affect your eligibility for the government Disability Support Pension while the funds remain in your superannuation account. This is because superannuation is generally exempt from means testing for government support purposes.

However, if you withdraw the funds or use them to create an income stream, the money will be subject to the DSP income and asset tests, potentially reducing or stopping your pension payments.

If you’re considering a TPD claim but worried about how it will impact your DSP payments, reach out today. Our TPD lawyers are experts at navigating government support services and can explain the exact impact your TPD claim will have on your current benefits, free of charge.

Can I get free help with my disability payout claim?

Absolutely. We believe everyone — especially those living with disability — deserves access to expert legal support, regardless of their financial situation.

That’s why we offer free consultations for all disability payout claims across Australia. It costs you nothing to find out where you stand, and there’s no obligation to proceed after you chat with us.

If you choose to move forward, we will handle your case on a No Win-No Fee basis. This means we cover all upfront costs, and you’ll only pay if we successfully secure your disability payout. If your claim isn’t successful, you never receive a bill from us.