Disability benefit disputes

Contributed by Paul Bingham and Graham Young and current to 1 September 2005

Disputes about total and permanent disability benefits are also common, since a determination of whether the member is disabled as defined by the trust deed must be made. Such benefits are often provided by way of an insurance policy between the trustee and an insurance company. So, a dispute can also arise as to whether the person is disabled as defined in the insurance contract. Other disputes can arise as to whether a person is covered by insurance at a particular time, and by which insurance company. These occur because the trustee may from time to time change insurer. The question of when an incapacity occurs and which insurer is liable at that time can also arise.

The remainder of this chapter will concentrate on the review of decisions concerning total and permanent disability benefits, but the same principles apply to review of other decisions.

STRUCTURE OF DISABILITY BENEFITS

The definition of total and permanent disability varies from trust deed to trust deed. A common definition requires the member to have been absent from work due to disability for a period of at least six months and, in the opinion of the trustee, to be unlikely ever again to engage in any profession, trade or occupation for which the member is reasonably fitted by education, training or experience. Work for which the member is reasonably fitted by education, training or experience means work for which the member is neither overqualified nor unqualified.

For example, a roofing carpenter who was able to work as a clerk or watchman was regarded as totally and permanently disabled with this definition because such work was not suitable, given his carpentry qualification and experience. Other common definitions require the member to be unlikely, in the trustee’s opinion, ever to engage in the member’s usual occupation (an easier test for the member to satisfy), or to engage in any gainful occupation (a more difficult test). Any gainful occupation means any occupation which the member is reasonably capable of undertaking, having regard to his or her education, experience or training, or which the member could reasonably be trained to perform. Therefore a person who is physically capable of performing a clerical job but cannot read or write may be unable to engage in “any gainful occupation”.