Disclaimer – This article is general information and education only. It is not financial or legal advice. Every insurance and employment situation is different. If you are considering making a TPD claim and are concerned about your employment, contact an employment lawyer and/or a superannuation/insurance-claims lawyer for advice tailored to your situation.
The single most common question we get asked is:
“If I make a TPD claim, can my employer sack me?”
The short answer is: No — your employer cannot lawfully dismiss you just because you make a TPD claim.
Your employment may still end if medical evidence shows you cannot perform the inherent requirements of your role. That is a separate decision from your insurance claim.
This guide covers:
- The difference between employer action and insurer decisions,
- When and how an employer may terminate on medical grounds,
- What workplace law protections apply, and
- How TPD claims interact with your employment.
Claims vs Employment: Separate Matters
| TPD Claim | Employment |
|---|---|
| Claim under an insurance policy (usually through super). | Governed by employment law, contracts, awards, and anti-discrimination law. |
| Decided by insurer/super fund. | Managed by employer. |
| Assessment against policy definition of permanent disability. | Assessment of inherent requirements of the job. |
| Making a claim is not a ground for dismissal. | Termination only possible if incapacity is permanent and adjustments cannot enable return to work. |
Can an Employer Fire You for Making a TPD Claim?
No. Under Australian law, an employer cannot dismiss you simply because you’ve lodged an insurance claim.
They may, however, lawfully terminate employment if:
- You cannot perform the inherent requirements of your role, and
- Reasonable adjustments (reduced hours, modified duties) would not allow you to return, and
- The decision is based on medical evidence, not the claim itself.
This is called a medical incapacity termination.
Workplace Law Protections
- Fair Work Act 2009 (Cth):
- Prohibits “adverse action” (including dismissal) for exercising workplace rights (such as making a claim).
- Protects against dismissal for temporary absences due to illness/injury (up to 3 months at a time or 3 months total in 12 months).
- State/Territory Anti-Discrimination Laws:
- Employers cannot discriminate on the basis of disability.
- Employers must consider reasonable adjustments before terminating.
- Enterprise Agreements & Awards:
- May provide additional rights to leave, extended absence protections, and return-to-work processes.
How Employment Commonly Ends During a TPD Claim
- Resignation – employee resigns knowing they won’t return.
- Medical termination – employer terminates employment where incapacity is permanent and supported by medical evidence.
- Redundancy – rare, unless genuine structural workplace changes occur.
- Dismissal for misconduct – unrelated to your medical condition or claim.
Key point: your employer cannot use your TPD claim itself as a reason to dismiss you.
Employer Involvement in a TPD Claim
You do not have to tell your employer immediately. However, insurers typically request:
- Employer statement confirming your role, duties, and last day worked,
- Payroll/tax records,
- Sometimes a statement of incapacity.
This is administrative only — your employer does not decide your claim outcome.
Worked Examples
Example 1 – Nurse with Back Injury
Kate lodges a TPD claim while on extended sick leave. HR completes the insurer forms. Months later, her hospital terminates her employment because she cannot ever perform nursing duties. She still receives her TPD payout, as termination is separate.
Example 2 – Office Worker with PTSD
Daniel lodges a TPD claim while on unpaid leave. His employer keeps him employed for 18 months before terminating due to incapacity. His TPD claim is approved regardless.
Example 3 – Factory Worker Worried About Retaliation
Ahmed fears dismissal if he claims. He lodges anyway. His employer leaves him on extended leave and the insurer pays out the TPD. His employment only ends when he resigns voluntarily.
Myths vs Facts
| Myth | Fact |
|---|---|
| You must resign to make a TPD claim. | ✘ Wrong. You can make a claim while still employed. |
| If I’m dismissed, my claim is invalid. | ✘ Wrong. Your eligibility is based on medical evidence, not job status. |
| Employers and insurers are the same. | ✘ No. Insurers assess claims; employers manage employment. |
| I must request adjustments myself. | ✘ Employers are legally obliged to consider reasonable adjustments first. |
Fast-Track Checklist: TPD Claims and Employment
| Action | Why It Matters | Who to Consult |
|---|---|---|
| ✅ Lodge your claim without fear | A TPD claim is not grounds for dismissal. | TPD lawyer |
| ✅ Ask about adjustments | Employer must consider these before termination. | HR/employment lawyer |
| ✅ Keep medical evidence current | Both insurer and employer rely on it. | GP/specialist |
| ✅ Don’t resign too soon | You may have leave or protections available. | Adviser/lawyer |
| ✅ Seek advice if dismissal threatened | Protects you against unlawful termination. | Employment lawyer |
FAQs
Do I need to resign to make a TPD claim?
No. You can lodge a claim while still employed.
If my employer terminates me, will my TPD claim fail?
No. Claim assessment and termination are separate processes.
Can my employer dismiss me while a claim is pending?
Yes, but only if you are medically unfit and adjustments would not help — not because of the claim itself.
Does my employer decide if I’m eligible for TPD?
No. The insurer or super fund decides.
Do I have to tell my employer about my TPD claim?
Not initially, but insurers usually ask for employer records eventually.
Key Takeaways
- Employers cannot dismiss you for making a TPD claim.
- Employment may end if you can’t do the inherent requirements of your role, but that is separate from the claim.
- Employment law protects you against discrimination and unlawful dismissal.
- You do not need to resign to lodge a claim.
- Seek legal advice if pressured to resign or threatened with dismissal.
Making a TPD claim should not put your job at risk. While your employment may end if you are medically unfit, your employer cannot terminate you simply because you’ve lodged a claim.
At TPD Claims Lawyers, we help clients not only secure their entitlements but also understand how their insurance rights interact with employment law. If you are worried about job security while considering a TPD claim, contact us today for a free, no-obligation consultation.
Last updated: 4 September 2025