Introduction
Most people hope to never have to claim on income protection insurance - but if illness or injury prevents you from working, the claims process is designed to provide structured, ongoing financial support while you recover.
In Australia, income protection claims are governed by the Life Insurance Code of Practice (March 2025), which sets clear standards around fairness, communication, and timeframes. Insurers must explain what's needed, keep you informed, and provide reasonable support.
🩺 1. Confirm Your Cover & Seek Medical Care
If something happens that may prevent you from working, the first step is to confirm what cover you hold.
- Your policy schedule outlines your waiting period, benefit period, and occupation definition.
- The Product Disclosure Statement (PDS) explains how claims are assessed and paid.
Income protection claims always require medical evidence. You'll need to consult a registered medical practitioner who can:
- Diagnose your condition
- Confirm when it began
- Assess how it affects your ability to work
📞 2. Notify the Insurer
Notify the insurer of a potential claim as soon as practicable after your illness or injury.
Claims can usually be initiated:
- Via the insurer's claims phone number
- Through an online claims form or member portal
- With support from your financial adviser or authorised representative
Once notified, the insurer will:
- Open your claim
- Assign a dedicated claims case manager
- Explain the next steps and required documentation
📅 3. Establishing Your Date of Disablement
A key part of the claims process is confirming your Date of Disablement - the date your illness or injury first prevented you from working.
This date determines when your waiting period starts and how pre-disability income is assessed.
The Date of Disablement is typically based on:
- When you stopped work or reduced capacity due to illness or injury, and
- When a medical practitioner first certified your condition
⏳ 4. Completing the Waiting Period
Income protection benefits don't start immediately. You must complete your waiting period (often 30, 60, or 90 days), during which you must:
- Remain disabled due to the same illness or injury
- Still meet the policy's disability definition at the end of the waiting period
Both total disability and partial disability can be assessed during this time.
📁 5. Providing Supporting Information
To assess your claim, insurers usually require information in three areas:
Medical information
- Treating doctor reports
- Medical records
- Ongoing medical certificates
- Independent assessments (when required, usually at insurer cost)
Financial information
- Payslips or tax returns
- BAS or financial statements (for self-employed)
- Employer confirmations (if relevant)
Personal & occupational
- Proof of identity
- Work history and job duties
💵 6. Claim Assessment & Payments
Once sufficient information is received, the insurer assesses whether you meet the policy definition of disability.
If your claim is accepted:
- Benefits are usually paid monthly
- Payments are generally made in arrears
- Benefits continue while you remain eligible and until the benefit period ends
During a claim, insurers will periodically review medical and financial information to confirm ongoing eligibility. This is a normal part of income protection, not an indication of a problem.
Total Disability vs Partial Disability
Income protection doesn't only apply when you're completely unable to work. Most policies recognise:
Total Disability
You're generally considered totally disabled if you:
- Cannot perform the important duties of your occupation
- Are not working in any suitable role
- Are under the regular care of a medical practitioner
Partial Disability
Applies when you:
- Return to work in a reduced capacity or fewer hours
- Perform modified duties
- Earn less due to illness or injury
Note: With a partial disability claim, income protection can still pay a benefit, typically calculated to top up your reduced income to a percentage of your pre-disability earnings.
Partial disability benefits are designed to support recovery and a gradual return to work — not penalise it.
📍 Income Protection Claims Held Inside Super
If your policy is inside super, the claims process has an additional layer of assessment under super law.
Even if you meet the insurer's definition of disability, benefits may only be paid if you satisfy the super fund's Temporary Incapacity definition.
To receive benefits from super:
- You must have been gainfully employed immediately before disability
- Your illness or injury must have caused you to stop being gainfully employed
💸 How much monthly benefit you'll get paid
Income Protection benefits are based on your income at the time of your disability, rather than your sum insured. There are several things that can impact the monthly benefit at claim time.
Your monthly benefit is based on your pre-disablement income, but this varies by employment history and timing.
Standard income calculation
If you are actively employed at the time you become disabled, your pre-disablement income is usually based on the average monthly income earned in the 12 consecutive months immediately before your Date of Disablement.
Income variation - reduced earnings
If your income has dropped significantly before your claim - for example due to a slow year or reduced hours - and:
- Your employment status has not changed
- Your income fell by 25% or more compared to the previous year
You may be eligible to use a longer income window (for example a 24-month average).
Income variation - reduced work
If you're not actively employed on the Date of Disablement (e.g. parental leave, sabbatical, or recently unemployed), income is assessed differently:
- Less than 12 months: average earnings for the 12 months before leave
- 12 months+: 12-month average ending 12 months before disablement date
➖ Claims offsets
Your income protection benefit may be reduced (offset) if you're receiving other forms of income or compensation during your claim. This ensures total payments don't exceed your allowed benefit level.
🔻 Payments that offset
- Sick leave or employer-paid income
- Government illness/injury benefits
- Workers’ compensation
- Legal settlements for lost earnings
- Other income replacement insurance
💰 Lump sum offsets
Lump sum payments may be converted to a monthly equivalent for offset purposes.
Breakdowns should show:
- Loss of income
- Loss of earning capacity
- Other economic losses
If no breakdown is provided, insurers estimate reasonably and allow review.
✅ Not offset
Annual leave and long service leave are usually not offset.
Also not offset:
- TPD lump sums
- Trauma cover
- Terminal illness benefits
- Needlestick benefits
🏃 Rehabilitation & Return to Work
Income protection is designed to support recovery, not discourage work. Many policies outside super include rehabilitation and return-to-work support, which may involve:
- Graduated return-to-work programs
- Workplace adjustments
- Retraining or alternative role assistance
📋 Your Responsibilities While on Claim
While insurers must assess claims fairly, claimants also have obligations, including:
- Provide information reasonably required to assess the claim
- Follow medical advice and treatment plans
- Participate in rehabilitation or return-to-work efforts where appropriate
⏱️ How Long Does an Income Protection Claim Take?
Timeframes vary depending on:
- The waiting period
- The speed at which medical and financial information is provided
- The complexity of the claim
Straightforward claims are often assessed within weeks after the waiting period. More complex claims can take longer, especially if additional evidence is required.
📌 Key Takeaway
The income protection claims process is structured, regulated, and designed to provide ongoing support while you're unable to work. Most claims progress smoothly when you seek medical care early, notify promptly, and provide the required information.
Frequently Asked Questions
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