What Happens After Your TPD Claim Is Approved?

Getting your TPD claim approved is a huge relief — but it’s also just the beginning. Once your insurer or super fund notifies you of approval, there are several important steps you need to take to actually receive your money, minimise your tax, and protect your financial future.

Step 1: You’ll Receive a Letter of Approval

Your insurer or super fund trustee will send you a formal letter confirming that your TPD claim has been accepted. This letter will outline the approved benefit amount, any conditions attached to the payment, and instructions on what you need to do next. Read this letter carefully and keep it in a safe place — you’ll need it for tax purposes.

Step 2: Choose How You Want to Receive Your Payout

In most cases, your TPD benefit will be paid directly into your superannuation account first — not straight into your bank account. You then have two main options: withdraw the full amount as a lump sum cash payment, or leave it inside your super fund (where it may grow further tax-effectively). The right choice depends on your age, tax situation, and financial needs. If you’re under 60, withdrawing your super early may attract tax — so it’s worth getting financial advice before deciding.

Step 3: Understand the Tax Implications

TPD payouts held inside super are generally taxed differently depending on your age and the components of your super balance. If you are under 60, your lump sum payout may include a taxable component that is subject to tax (typically at 20% plus the Medicare levy). For more detail, see our guide on whether your TPD payout is taxable. If you are 60 or older, your payout is usually completely tax-free. The tax-free component of your benefit is always paid out tax-free regardless of age. Your super fund will provide a payment summary detailing the breakdown of taxable and tax-free components.

Step 4: Notify Centrelink (If You Receive Government Payments)

If you are receiving Centrelink payments such as the Disability Support Pension (DSP), JobSeeker, or Carer Payment, you must notify Centrelink when you receive your TPD payout. A lump sum TPD payout can affect your Centrelink eligibility and payment rates, as Centrelink applies an assets test and income test to most payments. Centrelink may impose a ‘lump sum preclusion period’ — a period during which your Centrelink payments may be reduced or paused. Speaking with a financial counsellor before receiving your payment can help you plan for this.

Step 5: Get Your Other Insurance Policies Reviewed

Receiving a TPD payout may affect your other insurance policies. In many cases, your income protection insurance and life insurance held through the same super fund will be cancelled once a TPD claim is paid — because the policies are linked. Some standalone income protection policies outside super may continue. You should review all your insurance coverage with a financial adviser to understand what cover (if any) you still have and whether you need to replace it.

Step 6: Seek Financial Advice

A TPD payout can be a substantial sum of money — often hundreds of thousands of dollars. Many people who receive a lump sum payout without proper financial guidance end up depleting it too quickly or making costly decisions (such as withdrawing too early and paying unnecessary tax). A licensed financial adviser can help you create a plan for managing the lump sum, minimising tax, protecting the money from creditors, and ensuring you have enough to live on for the long term.

What If There Are Delays After Approval?

Even after approval, some claimants experience delays in receiving their money. Read our full guide on how long it takes to get paid after a TPD claim is approved. The insurer may approve the claim but your super fund trustee still needs to process the payment. This can take several weeks. If you experience unreasonable delays (more than 28 days from approval without payment), you can lodge a complaint with the Australian Financial Complaints Authority (AFCA) or contact a TPD lawyer for assistance.

Frequently Asked Questions

How long after a TPD claim is approved do I receive my money?

Most super funds aim to process and pay TPD benefits within 28 days of the trustee decision. However, some funds take longer. If your payment is delayed beyond 30 days, contact your super fund directly and request a timeline. If they cannot provide one, you can lodge a complaint with AFCA.

Will I still have life insurance after my TPD claim is paid?

Not necessarily. In most super fund policies, paying out a TPD benefit cancels or reduces your life insurance cover within the same fund. However, any life insurance held outside of super as a standalone policy is usually unaffected. Check your specific policy documents or ask your super fund directly.

Do I need to repay any Medicare or Centrelink benefits after a TPD payout?

No. You do not need to repay Medicare benefits. However, Centrelink may reduce your ongoing payments going forward if the TPD payout takes you over the assets or income test thresholds. This is different from repaying past benefits. It is a good idea to contact Centrelink and a financial adviser to understand your position before receiving your payout.

Can I still claim on other super accounts after receiving one TPD payout?

Yes. If you have TPD insurance cover through multiple super funds or policies, you may be entitled to claim on each of them separately. Receiving a payout from one fund does not automatically affect your entitlement under another fund. Each policy is assessed independently. See our guide on claiming TPD from multiple super funds for more detail.

Need Help With Your TPD Claim?

Whether you’re waiting on an approved payment, dealing with post-approval delays, or have questions about tax and Centrelink, our experienced TPD claims lawyers are here to help. We work on a No Win, No Fee basis so there’s no financial risk to getting advice. Contact us today for a free, confidential discussion about your claim.