A complainant who insisted his total and permanent disablement (TPD) claim should have been accepted has failed to overturn his insurer’s decision, with the complaints ombudsman ruling his Centrelink carer’s allowance did not meet the policy’s “gainful employment” definition. 

The complainant, who was seeking a $36,000 payment, says his work as a carer – for which he received a Centrelink carer benefit – is “work” as defined by the policy and that the former insurer and former trustee made the wrong decision to decline his claim. 

He says his claimed condition of cardiomyopathy prevents him from working and that he had an employment arrangement with the person he was caring for.  

Under the arrangement he carried out specific domestic duties and worked between 30 to 40 hours a week and on this basis, he was “gainfully working” because he received reward or payment for his work in the form of a carer’s payment from Centrelink. 

But the Australian Financial Complaints Authority (AFCA) says the evidence does not support his claim. The ombudsman says, “objectively construed”, the Centrelink benefit is paid in recognition of the fact that a person is restricted in maintaining employment because of their caring responsibilities. 

“Carer’s allowance does not arise from gainful employment for the purposes of the insurance policy,” the AFCA ruling says. 

The TPD policy defines gainful employment as working in any occupation or work for reward or financial benefit or the hope of either one, whether on a permanent or temporary basis. 

“Objectively construed, the panel considered the policy contemplates an employer paying an employee or contractor for their service to the employer,” the AFCA ruling says. 

“This can be contrasted with the rationale for a Centrelink carer’s benefit, which is to support a person who is restricted in employment due to carer responsibilities.” 

The former insurer declined the claim in April last year and in the following month the former trustee reviewed and agreed with the decision. The AFCA ruling did not identify them.  

Zurich, which took on the liability of the previous insurer in August last year, says both the former insurer and the former trustee correctly declined the complainant’s TPD claim because his carer’s benefit did not arise from gainful employment under the policy. 

Zurich also notes the complainant has not claimed TPD in relation to the “activities of daily living‟ or “permanent loss” definitions under the policy. 

The insurer does not consider a refund of premiums appropriate and, because there is no TPD benefit payable, it has not considered interest. The complainant, who lodged his complaint with AFCA in March last year, was also seeking to have his premiums refunded and interest paid. 

He says the former insurer and trustee stalled his TPD claim for eight months and have declined it even though he has the serious health condition of cardiomyopathy. 

AFCA ruled the complainant was not entitled to a premium refund as he had insurance cover for more serious disabilities under the policy’s TPD definition 2 – and potentially under subsequent definitions – during the period he was paying insurance premiums. 

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