Partial Disability

Partial disability cover sits within income protection insurance. It pays a proportional benefit when illness or injury reduces your work capacity but doesn't stop it entirely. It bridges the gap between full disability and complete recovery.

Standard definition

To qualify, you usually need to:

• Be unable to perform one or more important duties of your regular occupation
• Be working reduced hours due to illness or injury
• Have income loss of at least 20% compared to pre-disability earnings
• Be under medical care with ongoing treatment

How the benefit calculates

Benefits are proportional to income loss.

Example. If your pre-disability income was $8,000 monthly and your current reduced-hours income is $5,000:

• Income loss is 37.5%
• The benefit pays 37.5% of your monthly benefit

Most policies cap the combined total (work earnings + partial benefit) at 75 to 80% of pre-disability income to prevent over-insurance.

Why partial disability matters

It supports gradual return to work without immediate benefit cessation. The "own occupation" vs "any occupation" distinction applies here too, affecting whether reduced capacity in your role qualifies if you could work full-time in different work.

Waiting and benefit periods

• Waiting periods match the policy's main waiting period (30, 60, or 90 days)
• Maximum benefit period varies: some policies cap partial disability at 12 to 24 months; others match the main benefit period (to age 65 or 70)

Evidence requirements

• Medical certificates confirming ongoing restrictions
• Employment confirmation showing actual hours and duties
• Income evidence (payslips, tax returns) showing earnings loss
• Functional capacity assessments

How progressive claims work

A common pattern:

1. Start with a total disability claim
2. Transition to partial disability as recovery enables some work
3. Return to full duties, or settle into permanent reduced capacity

This flexible structure encourages return-to-work attempts rather than penalising them.

Where claims face scrutiny

• Whether work capacity is genuinely medically restricted or voluntary underemployment
• Accuracy of income loss calculations
• Whether reduced work relates to disability or to other factors (business downturn, lifestyle change)
• Long-term sustainability of partial work

Recent regulatory focus has supported claims practices that encourage return-to-work attempts without penalising claimants.