Australia — total vs partial as two PDS benefits

The test in this jurisdiction

Australian retail IP almost always defines Total Disability and Partial Disability separately. A widely used pattern (reproduced in AFCA determinations) is: total if, solely due to sickness or injury, you are not working more than 10 hours a week in your usual or a gainful occupation and cannot perform the important income-producing duties for more than 10 hours; or you are not working at all and cannot perform one or more important duties. Partial if you are working more than that hours threshold (or in reduced capacity) and earnings are below pre-disability income, under regular medical care.

The partial amount is typically (A − B) / A × C, where A is pre-disability (or pre-disablement) income, B is income while partially disabled, and C is the insured monthly benefit. Some Premier-style wordings deem a ≤10-hour week to be a 100% loss so the total benefit still pays. B may be replaced by what the insurer says you could reasonably earn if you are not working to capacity. Offsets (sick leave, workers compensation, other IP) still apply.

Waiting periods often require a block of total disablement (for example 14 of the first 19 days, or 7 of 12) before partial can accrue. Returning to work during the waiting period can reset or complicate that. After the waiting period, AFCA looks month by month: this month total, next month partial, a later month off claim if earnings recover. A graded return is the classic partial file — not evidence that you were never disabled.

Limbs to check

1. Hours threshold Count hours in the usual or any gainful occupation. Crossing the PDS threshold (often 10 a week) usually moves the file from total to partial.
2. Important duties Not the job title. Duties that produce income — some group wordings say a duty generating 20% or more of monthly income. Unable to do one such duty can still be total if you are not working.
3. Residual formula (Pre-disability income − current income) ÷ pre-disability income × monthly benefit. Minimum drop (often 20%) appears on some contracts. Same currency, same period.
4. Capable of earning If you are not working to capacity for reasons other than sickness or injury, some PDS replace actual earnings with a reasonable estimate. That is a medical and vocational argument, not a payslip.