Australian Financial Complaints Authority · AFCA published IP determinations · 2024–2026

Total and partial are separate benefits — AFCA applies the PDS as written

Recurring pattern across published income-protection determinations.

What happened

Retail and group IP product disclosure statements that AFCA reproduces in determinations typically split Total Disability and Partial (or residual) Disability. Common retail patterns include a 10-hour week threshold, an important-duties test, and a residual formula (A − B) / A × insured monthly benefit. Some wordings require a stretch of total disablement inside the waiting period before partial can pay. Offsets and ‘income you could reasonably earn’ clauses sit on top.

Holding / approach — AFCA does not grade medical severity as ‘total’ or ‘partial’. It asks which definition the person met in each month: hours actually worked, important income-producing duties, and earnings against pre-disability income. Working more than the hours threshold usually takes the file out of total and into partial — if the earnings drop and duty test are also met. Not working, but still able to do the important duties, fails total. A graded return is often residual, not recovery and not a failed total claim. Where the PDS deems a ≤10-hour week to be a 100% loss, AFCA applies that deeming.

What to capture on the file

Export hours and pay for the same periods the PDS uses. List important duties that generate income (some wordings use a 20% income-producing duty). Do not hide two days of work; do not accept ‘you sent email’ as the occupation. Check whether partial needs total days in the waiting period first.

What happened

What to capture on the file

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