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What is a permanent incapacity claim?

Permanent incapacity claim is an early release of your superannuation account balance if you have an illness or injury that’s likely to stop you from ever working again in any occupation you’re qualified to do by education, training, or experience.

Who’s eligible to claim?

To be eligible to make a permanent incapacity claim, you need two registered medical practitioners to certify that, due to your ill-health (physical or mental), you’re unlikely to return to work again in the future.

How long does it take?

Every claim is different, and the length of the claims process can vary depending on personal circumstances, as well as the availability of information required from you and your doctors and specialists. We aim to finalise permanent incapacity claims within one month from when both medical certificates are received.

It’s all in the guide

For full details on the insurance cover we offer, including important definitions of key terms relating to permanent incapacity claims, refer to our handy Insurance in your super guide for members.

Download

How the claims process works

Call our Helpline and we’ll help you with the first steps of the claim and inform you of what’s involved with the overall process.

We’ll need to ask you a few questions relating to your claim, and you’ll need to have the following information handy to initiate your claim:

  • Your Equip Super membership number
  • Details of your injury or illness
  • The date you first consulted your doctor for your condition, and
  • The date you were certified as being unfit to work.

Once we’ve determined that you’re eligible to claim, the relevant forms will be sent to you to complete:

  • Permanent incapacity member statement – this needs to be completed by you (or your power of attorney).
  • General practitioner medical report – will need to complete the form confirming that you meet the definition of permanent incapacity.
  • Specialist medical report - will need to complete the form confirming that you meet the definition of permanent incapacity.
  • Benefit payment form – you’ll need to use this form to provide on for how you’d like to receive the approved benefit. Payment can be made as a full or partial withdrawal, and can be paid directly into your account via EFT or issued by cheque.
  • Certified proof of identity – for security purposes, certified proof of your identity such as your driver’s licence or passport is required. A certified copy is simply a photocopy of an original document that has been sighted, signed and stamped by an authorised person as being a ‘certified true copy’. Photocopies of certified documents cannot be accepted.

Your claim will be assessed to determine whether you meet the definition of permanent incapacity, as outlined by superannuation law.

We’ll strive to reach an outcome as quickly as possible and we’ll keep you regularly updated throughout the assessment process.

The Trustee is responsible for assessing and deciding on your claim. This includes ensuring the decision is fair and reasonable, and meets the early release benefit requirements as governed by superannuation legislation.

If your claim is approved, we’ll pay your benefit in accordance with your payment instructions.

If your claim is declined, we’ll tell you in writing why your claim doesn’t satisfy the definition. If this occurs, and you disagree with the decision, you can request a review. You’ll have the opportunity to provide further evidence (if any) to support your claim. All review requests are treated as formal complaints and will be independently assessed by the Trustee.

We’ll pay your super account balance to you if we approve your claim.

The benefit can be paid to you as:

  • A full benefit payment via electronic funds transfer (EFT) or by cheque
  • Partial lump sum withdrawals from your super account when you need to, or
  • An Equip Super Retirement Income account to provide you with regular income payments to support you into the future.

If you choose to take a partial lump sum withdrawal, a minimum account balance of $6,000 is required to be retained in your super account.

What about tax?

If your permanent incapacity claim is accepted, it results in an early release of your super account balance. Your benefit is likely to incur tax depending on your age, whether you withdraw the benefit as a lump sum or income stream, and how your account may have already been taxed.

Payments generally consist of a tax-free and a taxable component. Tax is only payable on the taxable component of your withdrawal. We recommend you seek financial advice to fully understand how any benefit payment made to you may be taxed.

 

Type of super 

Type of  withdrawal

Maximum tax rate (including Medicare levy 2%)

Taxable component – taxed element

Lump sum

Under preservation age:

  • Up to 22%

Over preservation age but under 60:

  • Nil up to low rate cap*
  • 17% on balance over low rate cap*

Age 60 and over:

  • No tax payable

Taxable component – untaxed element

Lump sum

Under preservation age:

  • 32% up to $1.780 million#
  • 47% on balance over $1.780 million#

Over preservation age but under 60:

  • 17% up to low rate cap*
  • 32% on balanced between low rate cap* and $1.780 million#
  • 47% on balance over $1.780 million#

Age 60 and over:

  • 17% up to $1.780 million#
  • 47% over $1.780 million#

 

* For financial year 2024-25, the low cap rate is $245,000.

# The amount shown is for financial year 2024-25.

We're here to help

Remember, we’re here if you need us for assistance with the claims process, or if you have any queries about the progress of a claim, or for any insurance related queries.

Contact us

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