Australia TPD Calculator
Estimate your Total and Permanent Disability cover needs in Australia and compare own-occupation vs any-occupation TPD definitions and premium impact.
Your Profile
TPD Premium Estimate
Annual Premium
A$962
Monthly: A$80
Cover Amount
A$750.0K
Tax Inside Super
A$110,217
Tax Stand-Alone
A$0
Definition
ANY
Tax Treatment on Benefit Payout
2026 low-rate cap = $249,014. Untaxed element below the cap is tax-free if paid as a lump sum while under preservation age; above it, concessional tax applies.
Stand-alone TPD outside super: benefit is tax-free to the insured. Inside super: accessed as a disability super benefit — portion up to the low-rate cap is tax-free; excess taxable element attracts 17% tax (includes Medicare) with a 15% offset for total-and-permanent disability lump sums for under-preservation-age recipients.
Definition Explainer
Any-occupation TPD pays only if unable to ever work in any suitable job matching training & experience — stricter test. Standard inside super.
What TPD insurance covers
Total and Permanent Disability (TPD) pays a lump sum if you become unable to work — ever again — due to sickness or injury. It plugs the gap Income Protection doesn't: a one-off sum to clear debts, fund medical costs, modify your home, and replace long-term earnings. Typical sum insured target: debts + 10× lost income - existing cover.
Own-occupation vs any-occupation vs ADL
Own-occupation: pays if unable to perform your specific job (e.g., a surgeon who loses fine motor skills). Strongest definition, 50% more expensive, usually only available outside super. Any-occupation: pays only if unable to work any job matching your training and experience. Standard inside super. ADL: only if you can't perform 2 of 5 basic activities of daily living — very restrictive, cheapest, usually only for heavy-risk workers.
Tax on TPD paid from super — the low-rate cap
For 2026-27, the low-rate cap is A$249,014. If you're under preservation age and receive a TPD lump sum from super, the untaxed element up to the cap is tax-free; above the cap, the taxable element attracts 17% (includes 2% Medicare) with a 15% disability-superannuation-benefit offset commonly applying. Stand-alone (outside super) TPD: benefit is fully tax-free to the insured — no cap. This often makes stand-alone the better net-of-tax outcome for cover amounts above $250k.
Split-structure arrangement
Many advisers recommend SPLIT: any-occupation TPD inside super (cheap, cash-flow-friendly premium) PLUS an own-occupation TPD top-up outside super. Trigger claim on any-occ first; if only own-occ is met, claim the outside super top-up. This works around APRA's 2014 restriction that prevented own-occ TPD from being held inside super.
Common questions about TPD
What exactly does TPD pay on?+
A tax-free lump sum if you are deemed totally and permanently unable to work again. Two definitions: Any-occupation (default inside super) — you can't do any job you're qualified for; much harder to claim. Own-occupation (only available outside super) — you can't do the duties of your specific occupation. Own-occ claims are roughly 3× more successful. Policies also cover activities-of-daily-living (ADL) triggers for non-working spouses.
How much TPD do I need?+
Tally lifetime costs if you can never work again: cleared mortgage + cleared debts + home modifications (ramps, bathroom, vehicle — $100k-$300k) + lifetime medical/care gap + dependant support to independence. A mid-career earner with a family typically needs $1.5M-$2.5M. TPD sits alongside life cover — you don't need to double-budget for both; size TPD as the "living disability" equivalent of your life-cover number.
Why own-occupation must be outside super?+
Since 2014 SIS Act changes, super funds cannot offer own-occupation TPD because the definition doesn't match the "unable to ever work again" test required for super benefits to be released early on disability grounds. Insurers got around this with split contracts: any-occ TPD held inside super + an own-occ "top-up" held outside. Ask your adviser for a linked-cover structure to maximise tax-effective premium payment while keeping the stronger own-occ definition.
Is TPD taxable?+
Paid outside super: tax-free to the owner. Paid inside super: the "taxable component" (roughly: amount × (days-to-retirement / days-of-eligible-service)) is taxed up to 22% (including Medicare) if you're under preservation age. The tax can shave a 6-figure amount off a million-dollar TPD claim if structured poorly. Structuring matters — take advice.
TPD vs Trauma/Critical illness?+
TPD pays on permanent disability preventing work — a slow, careful assessment with medical opinions. Trauma pays on diagnosis of listed conditions (cancer, heart attack, stroke, MS) — faster to claim, but only on the defined list. They are complementary, not substitutes. TPD handles the catastrophic-career case; Trauma handles the "mid-career health shock that doesn't prevent all work" case.
What are the 2026 premium benchmarks?+
$750,000 any-occ TPD inside super, stepped, non-smoker: age 30 ~A$280/yr, age 40 ~A$620/yr, age 50 ~A$1,450/yr. Own-occupation equivalent outside super: roughly +35-45% on those figures. Smokers +60%. Blue-collar occupations (plumbers, electricians, construction) add another 40-80% loading depending on class.
How long does a TPD claim take to pay?+
Realistic average 6-12 months from claim lodgement to payment, sometimes longer. Insurers require extensive medical evidence, multiple specialist reports, and often a 3-6 month "stability period" confirming permanence. Factor this lag into any financial plan — your family needs IP + savings to bridge the TPD claim timeline.