Having been diagnosed with young onset Parkinson’s, you may feel confused about your well-being and finances. You should start by gathering information about your rights and insurances within and outside superannuation. Employers may also have insurance for you, so you should read your employment contract and contact your HR department to enquire about things like income protection insurance.
Medical Retirement Planning
After gathering all the information about your financial affairs including any insurances you may claim, you should start to think about your health and well-being and have open discussions with your primary health professionals. Some jobs could be easier to work in, so you should print a resume and discuss your job description with your medical team and discuss your ability to continue to work regularly. This is important because if you need to reduce your hours, you should have medical reasons why this is appropriate to reserve any insurance rights and employment rights.
Taxation (Insurance claims)
People with Parkinson’s often retire early. Accessing your superannuation and insurance may be a great way to help you feel less anxious. Start by asking your superannuation fund or your insurer about your entitlements. Sometimes this insurance is held by your employer without you knowing about it so also do speak to your HR or manager about any insurance your employer may be covering you for.
If you are going through a superannuation release, you should be aware that you may be able to access under disability grounds (also called incapacity), you may pay some taxes. For those under age 58, the tax is the lower of 22% or your marginal tax rate. This tax applies to the entire benefit (meaning any insurance and your superannuation savings). For those between the age of 58 and 60, you may pay less tax but it is a very good idea to obtain financial advice from a Certified Financial Planner and preferably one who specialises in complex health conditions. Generally, those who are over 60 pay no tax. If you have worked for the Australian Defence Force, Police or other government agencies special rules may apply to you and you should check with your employer/ advocate/ superannuation fund.
For insurances held in your personal name, there may be no tax payable. However, any income replacement insurance (also known as income protection or temporary incapacity insurance) then taxes are paid just like your ordinary income. You must also be mindful that accessing your superannuation could have an impact on any Centrelink benefits, Child Support Payments and Family Tax Benefits.
People with Parkinson’s are often not required to undergo many medical proofs so the insurance claims tend to be easier than other types of illnesses. Paying hefty legal fees is not usually required. Typically an insurance claim takes 2-6 months, and you will be required to provide two medical certificates proving you cannot continue with a job you are suited to by training, education or experience. Many people feel burdened by the process, but there are many options for administrative assistance provided by claims advocates.
There are four major types of insurances you may claim:
Total and Permanent Disablement (TPD) Pays a lump sum and often found in your superannuation account. Most people with Parkinson’s would qualify due to the nature of the illness.
Income Protection Insurance (Salary Continuance) Pays an income and often found in your superannuation account or you may own it directly or your employer may have taken one out for all employees. This replaces any partial or full loss of income and is a great way to keep working longer but reducing your hours, or fully stopping.
Trauma Insurance (Crisis) This is lump-sum upon diagnosis of Parkinson’s and is typically purchased through a financial institution or a financial planner and is owned by you directly.
Life insurance (death) This provides a lump-sum and is often found in superannuation and can pay if two medical practitioners certify you are likely to die within 24 months, or after you pass away.
Centrelink related matters including disability pensions
Centrelink Disability Support Pension is one of the more difficult financial resources to obtain. Most people would be on Jobseeker or Jobkeeper first prior to Disability Support Pension (DSP). However, unlike DSP those payments have “mutual obligations” meaning you must attend appointments and be actively searching for work. Typically, you can take be given medical leave from those mutual obligations for 6 months in a 12 month period. This means that many people with Parkinson’s find it exceptionally difficult to keep up with the demands of those payment types.
To apply successfully for the Disability Support Pension you should be aware that there are impairment thresholds you need to reach and you need to be:
- A. Fully diagnosed
- B. Fully managed
- C. Fully stabilised
- D. Show that you were in a program of support (to meet your mutual obligations through a job search agency) but you have been exited under medical grounds, and you meet the financial tests (both income and asset tests)
We suggest you seek the advice of a Certified Financial Planner if you feel that you may be eligible, but your financial resources are above the thresholds. Those thresholds can be easily found if you search “asset test” or “income test” on the web.
Your primary support person (your partner or anyone else that is not remunerated to assist you) may also be eligible for Centrelink assistance and receive payments such as Carer Allowance and Carer Payments.
Planning for future needs including trustee support
People with young onset Parkinson’s may feel easily overwhelmed with paperwork due to fatigue and concentration issues. You may also feel unable to engage with your finances as much as you like and this may worry you. On the other hand, some medications are known to cause impulsive issues that lead you to make financial decisions you may not otherwise make. Appointing someone you trust as a Power of Attorney can be one way to stay in control for longer. We recommend that you speak to a lawyer about your options.
If you are deemed unable to manage your own affairs, and you have no Power of Attorney then a trustee may be appointed for you. This could be a State trustee or a trustee company. They typically charge a fee for their work, but often take care of most aspects of your finances and usually will consult with you if you are able to give instruction.