The Federal Court has overturned an ombudsman’s decision on the date of disablement for calculating a woman’s TPD payment, finding in favour of the insurer.

The ruling sets aside a decision by the Australian Financial Complaints Authority that involved a life policy held through the Australian Retirement Trust and issued by QInsure.

Policyholder Kate Buckland stopped work in September 2021 and began receiving monthly income protection benefits the following month.

In August 2022 a psychiatrist issued a certificate stating she could not return to work, and she lodged a total and permanent disability claim that was accepted.

The payment was dated from August 2022, but Ms Buckland sought a recalculation after her GP completed a medical certificate in 2023 saying she had been incapacitated since September 2021.

AFCA determined Ms Buckland was entitled to be paid a TPD benefit from September 2021, adding $36,480 to the $312,960 already paid.

The Australian Retirement Trust and ART Life Insurance, formerly QInsure, appealed to the Federal Court.

Judge Roger Derrington says that in 2021 Ms Buckland’s GP expected she would be able to return to work by February 2022, but in 2023, after access to further medical reports, the GP issued another medical certificate saying she had been incapacitated since September 2021.

The judge says it will often be the case that someone is injured but it is not known if they will in future meet the TPD definition. The policy did not provide for financial adjustment for retrospective certification.

He says there was no suggestion an earlier TPD diagnosis could have been made, and before August 2022 “there was a real and recognised prospect that she would return to work in the future, and by the same token, a possibility that she would not”.

AFCA considered the requirement for medical certification for the date of disablement to be a technicality, which was incorrect.

Find the judgment here.