EML has launched the latest iteration of its white paper series, The Complexity Premium: the cross-scheme pressures impacting claims in super, offering new insights into the future of income protection claims across the superannuation industry.
Australia’s income protection landscape is changing, not through sudden disruption, but through a gradual redistribution of risk.
New modelling commissioned by EML and conducted by the University of Melbourne shows that tightening eligibility for psychological injury in the Victorian workers’ compensation scheme could drive a 19% increase in income protection claims within superannuation over the next decade
Developed in partnership with the Council of Australian Life Insurers, the white paper reveals that if these trends continue nationally, a growing proportion of individuals who may previously have been supported through workers’ compensation will instead enter the superannuation system earlier, particularly through income protection.
News publications have started to report on the mounting sustainability pressures in the TPD insurance market, with the shift already starting to emerge in claims data across major funds.
Many funds are reporting rising claims costs and adjusting premiums accordingly, driven by increases in mental health and disability claims among younger members.
When workers' compensation schemes deny access earlier or exit claimants sooner, the income replacement obligation doesn’t disappear - it migrates. Income protection inside super is shifting from a backstop to a secondary safety net. As a subject matter expert in personal injury, we have first-hand insight into how these legislative and system changes move claims around the 11 different income support systems. What it's telling us is that income protection in super will see an increase in mental health claims for both income support and TPD. Our early discussions with the superannuation industry are revealing that funds are seeing this data translate firsthand into their claims experience. These insights are helping shape how they approach claims management.
Claims that historically entered through workers’ compensation are now:
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Presenting earlier in super
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Running for longer durations
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Requiring more complex intervention
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Increasing exposure within both income protection and TPD
Early discussions with superannuation funds indicate that this trend is already translating
directly into real-world claims experience.
Superannuation is fast becoming the safety net of last resort, and income protection claims are rising in both volume and complexity. When workers compensation settings shift, behaviour across the entire system changes. If you operate in super, this isn’t a future risk—it’s a current one. Our latest white paper helps funds, trustees and insurers understand what’s coming, what it means for sustainability, and how to act, before pressure turns into impact.
The research highlights three key risks for funds that fail to respond proactively:
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Increased claims volatility
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Poorer member outcomes
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Greater regulatory and reputational exposure
As scrutiny increases across both superannuation and mental health outcomes, funds face
heightened expectations around claims management practices.
