TPD claim financial advice · Australia-wide
Your TPD claim has been approved. Stop before you withdraw a cent.
When a total and permanent disability benefit lands in your super, the next few decisions decide how much tax you pay, what happens to your Centrelink payments and how long the money has to last. Get them laid out in front of you first. Then decide.
Our view
A TPD benefit is often the largest sum someone will ever receive, and it arrives at one of the hardest times of their life. The money isn’t going anywhere. An hour spent understanding your options before you withdraw can be worth more than anything else you do with it.
Sound familiar?
The money is there. The answers aren’t.
Everyone has an opinion
Family, friends, the fund’s call centre. Half say take it all out now, the other half say leave it. Nobody has looked at your actual numbers.
You’ve been told to roll your super together
Consolidating sounds tidy. After a TPD claim it can quietly increase the tax you pay on the way out.
You’re on DSP or JobSeeker
You’re worried a withdrawal will cut your payment, and you can’t get a straight answer about how it’s assessed.
Legal fees and a form to sign
Your lawyer needs paying, the fund has sent a withdrawal form, and you’d like someone to check it before it goes back.
The claim process
How a TPD claim through super actually works.
Most Australians hold TPD cover inside their super without ever having chosen it. Many hold it in more than one fund. Here is the path from a claim to money in your hand, and where the traps are.
Find the cover. Check every super fund you belong to, including old ones. Each fund’s insurance, definition of disability and waiting period can be different.
Keep the accounts open. Rolling an account out or letting it go inactive can cancel the insurance inside it. Don’t consolidate anything before a claim is resolved.
Lodge the claim. Usually with the fund, supported by medical evidence and employment details. Many people use a personal injury lawyer for this step, and we work alongside them.
The insurer and trustee assess it. The insurer assesses against the policy definition and the fund trustee makes the decision. If a claim is declined there is an internal complaints process and then the Australian Financial Complaints Authority (AFCA).
The benefit is paid into super. An approved benefit is added to your super balance. No tax is payable at this point and nothing has changed for Centrelink yet.
You decide what to do with it. This is where the financial consequences start, and where an hour of advice matters most.
Your choices
Once the benefit is in super, you generally have three options.
Because you’ve met a condition of release, the whole balance (your existing super plus the TPD benefit) is usually accessible. You don’t have to decide everything at once, and you can withdraw at any time in the future.
Leave it in super
The money stays invested and you can draw on it later. Super is generally not counted by Centrelink until you reach Age Pension age.
Withdraw some or all of it
Useful for clearing debts, the mortgage or legal fees. If you’re under 60, part of a lump sum can be taxed, and what you do with the cash can affect Centrelink.
Start an income stream
A regular payment from your super. If you receive a disability superannuation income stream before preservation age (now 60), you are generally entitled to a 15% tax offset on the taxed element. From 60, the taxed element is generally tax free. An income stream is also generally assessed by Centrelink.
Tax on TPD payouts
How the tax on a withdrawal works.
From age 60, withdrawals from a taxed super fund are generally tax free. Under 60, part of a lump sum withdrawal can be taxed. The good news is that a withdrawal after a TPD claim gets a special calculation, often called the tax-free uplift.
Two medical practitioners need to have certified that you’re unlikely to work again in a job you’re reasonably qualified for. The fund then works out what share of your working life was still ahead of you, from your date last worked to age 65, compared with your total service period, which starts at your eligible service date. That future share of the benefit becomes tax free.
So everyone’s effective tax rate is different. Each super account produces its own result, because each has its own eligible service date.
Illustrative example only. Someone whose super started at 25 and who stopped work at 45 has roughly 20 years of past service and 20 years to age 65, so roughly half the benefit could become tax free. If they had rolled in an older account that started at 18, the total service period grows, the future share shrinks, and more of the withdrawal is taxable.
Warning: consolidating super after a TPD claim can change your eligible service date and increase the tax you pay. Funds can also make mistakes in the calculation. Have it checked before you withdraw or move anything.
Centrelink and other payments
Approval doesn’t change your payments. What you do next can.
Super is generally excluded from Centrelink’s means tests until Age Pension age. For pensions and allowances such as the Disability Support Pension and JobSeeker, the withdrawal itself isn’t what Centrelink looks at. It looks at where the money ends up.
| What happens to the money | How Centrelink generally treats it |
|---|---|
| Left in your super account (under Age Pension age) | Not assessed |
| Used to pay down the mortgage on your home | Not assessed, because your home is exempt |
| Spent on bills, living costs, a car or a trip | Not assessed once it’s spent |
| Sitting in a bank account or invested outside super | Assessed under both the income test (through deeming) and the assets test |
| Moved into a super income stream | Generally assessed, even before Age Pension age |
| Given to family | Gifts above the allowable limits can still be counted against you for five years |
| Withdrawn before age 60 while receiving Family Tax Benefit | The taxable part can be included in adjusted taxable income and reduce Family Tax Benefit |
Centrelink pays on whichever of the income test or assets test gives the lower result, and the thresholds differ for singles, couples, homeowners and non-homeowners. They change regularly, so we work from the current figures for your situation rather than a fact sheet. Child support assessments, public housing rent and bankruptcy can also be affected by a withdrawal, and we cover those where they apply.
Our TPD assessment service
How we help, step by step.
Book a time
Pick a time online or call us. We work with people right across Australia, usually by phone.
Send us the paperwork
Your approval letter, super statements, any Centrelink details and your fund’s withdrawal form.
We run the numbers
Tax on withdrawal for each account, the Centrelink impact and the other consequences that apply to you.
Report and phone consult
A written report, then we walk you through it so you can make an informed decision.
Help with the follow-through
Completing the withdrawal form and paying legal fees, plus further advice or referrals if you want them.
What you get
A written report and a phone consultation.
- Your situation and the options open to you
- An estimate of the tax payable on a withdrawal, account by account
- A check of the eligible service dates the fund is using
- The Centrelink impact, with calculations where relevant
- Other consequences such as child support, public housing or bankruptcy
- Help completing the withdrawal form and paying legal fees
- What happens next, including further advice if you want it
The service is built for every TPD claimant, not only people with large payouts. Personal injury lawyers: we’re happy to work with your clients once a claim is approved.
Questions we’re asked
TPD payout FAQs.
Is my TPD benefit taxed when it’s paid into super?
No. The benefit is added to your super balance and no tax is payable at that point. Tax only comes into play when money is withdrawn, and then generally only if you’re under 60. How the tax-free uplift works.
Do I have to withdraw it all straight away?
No. Once you’ve met the condition of release you can generally leave the money in super and withdraw it whenever you need it. Many people take part of it now to clear debts and leave the rest invested.
Will my withdrawal reduce my Disability Support Pension?
The withdrawal itself generally isn’t assessed. What you do with the money can be. Paying off your home loan or spending it isn’t counted, while money held in the bank or invested outside super is.
Should I consolidate my super accounts first?
Not without checking. Rolling accounts together can bring an earlier eligible service date across and reduce the tax-free uplift. If a claim on another fund is still open, rolling out can also cancel that insurance.
I’m over 60. Do I still need this?
Tax on withdrawals is generally nil from 60, but the Centrelink, Family Tax Benefit and investment questions are still there. The TPD assessment is shaped to what’s relevant to you.
How do you work with my lawyer?
Many of our TPD clients come to us through personal injury lawyers. We focus on the financial side after approval, including what’s needed to pay the legal fees from your benefit, and keep your lawyer in the loop with your permission.
Can you help if I’m not in Melbourne or on the Gold Coast?
Yes. Most TPD assessments are done by phone or video, wherever you live in Australia.
WE. Insights
Reading on insurance, TPD and super.
Your next step
Before you withdraw your benefit, understand your options.
Book your TPD assessment online. You’ll leave knowing the tax, the Centrelink impact and the order to do things in.
General advice only, current as at October 2026. This information does not take into account your objectives, financial situation or needs, so consider whether it is appropriate for you before acting. Tax and Centrelink outcomes depend on your circumstances and the rules at the time. Wealth Effect Group (CAR 424768) and Andre Dirckze (AR 395157) are Authorised Representatives of Boston Reed Pty Ltd, ABN 89 091 004 885, AFSL 225738. See our important information.