Leaving the workplace due to a chronic neurological condition

In this article, we explore employment challenges faced by individuals living with a neurological condition and supports available to help provide stability during this difficult transition. We’d also explore mechanisms for financial support, including the Total and Permanent Disability (TPD) insurance, the Disability Support Pension (DSP) and Income Protection Insurance.

Degenerative neurological conditions, such as multiple sclerosis, Parkinson’s disease and motor neurone disease, progressively impairs the nervous system.  

In Australia, approximately 2.2 million people live with long-term neurological conditions and these are among the leading causes of disability, accounting for 8.4% of the national disease burden in 2024.¹ The burden of disease is the quantified impact of a disease on injury on a population, which measures how much healthy life has been lost through living with illness or injury.  

 Degenerative neurological conditions often begin with mild symptoms but become increasingly limiting over time, with many individuals forced to reduce work hours or leave the workforce altogether.  

For those who choose – or need – to exit employment prematurely, the priority often shifts to the financial implications and securing financial support that can help maintain living standards and cover medical and care costs.  

There are three mechanisms of financial support to help individuals exiting employment: Total and Permanent Disability (TPD) insurance, the Disability Support Pension (DSP) and Income Protection Insurance. 

It is important to explore your options before you suspend or leave your employment as you may be able to claim insurance benefits that is attached to your superannuation. In some cases, reducing or changing your work hours prior to ceasing work can have a negative impact on insurance claims.  

TPD insurance is typically offered through superannuation or purchased separately and a lump sum is paid if an individual becomes totally and permanently disabled due to illness or injury. [moneysmart.gov.au].  Most workers are covered for TPD insurance through their superannuation fund contributions made by their employer.

Key features of TPD insurance: 

• Own-occupation vs. any-occupation 
  • Own-occupation cover allows you to claim if you cannot return to your specific job.
  • Any-occupation cover only pays if you can’t work in any job suited to your skills – a stricter definition. [moneysmart.gov.au], 
• Claim eligibility 
  • Insurers require evidence that the disability is permanent and that you are incapable of working as defined by the policy. Proving this often involves extensive medical documentation, including attending doctor’s statements and meeting policy criteria such as inability to perform daily activities. [rlc.org.au], 
• Uses of the claim 
  • People use TPD benefits to pay debts (like mortgages), fund home modifications, access rehabilitation or specialist care, and cover essential living or medical expenses. [moneysmart.gov.au], [westpac.com.au] 

For those leaving work because of degenerative neurological condition, a TPD payout can provide crucial financial breathing room. The value depends on policy limits and how much cover is held.  

It's typically advised to seek professional advice when looking at support in this space, including liaising with specialist superannuation lawyers, who can support you to determine eligibility, what potential payouts you may receive and to assist in lodging claims. The MSWA Employment Support Services (ESS) team can also connect you to a range of professionals who work in this space.   

The DSP is an Australian Government income payment for those with severe physical, psychiatric or intellectual disabilities expected to persist for at least two years and are unable to work more than 15 hours per week. Eligibility involves two criteria: [dss.gov.au], [servicesaustralia.gov.au] 

• Non-medical rules:
  • Must be Australian residents aged between 16 and Age Pension age.
  • Income and assets must fall below thresholds. [servicesaustralia.gov.au], 
• Medical rules:
  • Requires clinical evidence of diagnosis, treatment history, stabilisation and prognosis.
  • Must achieve at least 20 points under impairment tables and prove ongoing inability to work full-time for at least two years. [dss.gov.au],  

Applying for DSP can be challenging and often necessitates professional assistance, as applicants must compile comprehensive medical records, complete forms and potentially engage with programs of support.   

This medical evidence also needs to be in a format that is easy for Services Australia to understand and process, particularly regarding impairment tables.   

The MSWA team are experienced in supporting Clients with their DSP claims and can also help fast track this process for individuals with palliative illnesses.  

Income Protection Insurance reimburses part of your lost income usually up to 70% – if illness or injury prevents you from working, covering either a specified term or until age 65. [moneysmart.gov.au]. 

Core elements include: 

• Benefit structure 
  • Some policies offer indemnity value based on your income before becoming ill, while others offer an agreed value for those with variable earnings. [moneysmart.gov.au], 
• Waiting and benefit periods 
  • These benefits are typically not paid immediately and you usually need to serve a waiting period before claiming which is typically between 14 and 90 days in length depending on your policy. Some policies include inflation-indexed increases. [zurich.com.au], [moneysmart.gov.au]
• Tax treatment 
  • Premiums for standalone income protection policies are tax-deductible; if benefits are received, they are an assessable income. [ato.gov.au] 

Income Protection Insurance can offer financial stability during the early stages of leaving work. It can work in tandem with the DSP where income protection is sustained over months or years, once significant impairment is established. 

For those exiting work due to a degenerative neurological condition, a strategic combination of TPD, DSP and Income Protection Insurance can make a significant difference to your employment transition. This layered strategy maximises financial resilience while reducing stress: 

Walking away from work due to a degenerative condition is emotionally and socially challenging. Financial stress compounds these difficulties.  

Following these steps can ease the transition: 

1. Get early advice: If you have a neurological condition, reach out to the MSWA Employment Support Services team for assistance. It’s also highly encouraged to talk to financial advisors, legal experts and specialists to fully understand policy provisions, claim processes and timelines.
2. Organise medical evidence: Collect and store all relevant medical records –diagnoses, specialist reports, test results, functional assessments for TPD and DSP applications.
3. Track benefit timelines: Be aware of waiting periods for Income Protection Insurance and claim preparation times for TPD and DSP.
4. Plan for expenses: Budget for medical care, rehabilitation, home modifications and everyday living costs. Early preparation can reduce financial anxiety.
5. Tap into support networks: Utilise supports at MSWA including our ESS team, and Support Coordinators. Other support networks includes community organisations and employer services for care coordination, emotional support and workplace accommodations. 

Leaving the workforce due to a degenerative neurological condition is never easy. Though the road is challenging, Australia’s framework of TPD insurance, Income Protection and the DSP – backed by health and social care systems – offers a structured path through financial uncertainty. 

Proactive planning, aligning insurance coverage with individual needs and preparing strong claims documentation are critical. When effectively combined, these measures empower individuals to maintain dignity, care and financial security despite the challenges posed by degenerative neurological conditions. 

Reach out to Employment Support team today.