Deliver tens of thousands for injured tradies with tax tweak
3 March 2026
MEDIA RELEASE
Industry fund CBUS Super is calling for clearer, fairer tax settings on total and permanent disability (TPD) insurance payouts for members under 60 – a change that could save workers and their families thousands at a difficult time.
In its submission to the 2026-27 Federal Budget, the $110 billion fund has set out practical reforms to make sure members are paid super on time, protect their savings and make retirement easier to navigate.
While TPD insurance payments after age 60 are generally tax-free, members under 60 must deal with a complex web of rules and can pay up to 22% tax on claims. With the average CBUS TPD claim sitting at $103,000 last financial year, the tax hit can be significant.
CBUS CEO Kristian Fok said removing tax on all TPD claims – not just those paid after 60 – would make the system easier to understand and help members get to the finish line after a lifetime spent building our nation.
“For many of our members, a serious injury or illness can mean finishing work earlier than planned. Their insurance payout often needs to support them, their families and their recovery for the long term,” he said.
“We’re calling on the government to simplify the tax settings on insurance-in-super payments, so members aren’t left trying to untangle complex rules at an already stressful time.
“When you’re dealing with a life-changing event, worrying about tax shouldn’t be part of the load.”
Members currently face different tax components, uplifts and rates depending on their age and how they take their payment – creating unnecessary complexity during a tough period.
Insurance claims continue to rise, with CBUS paying more than $268 million in TPD claims last financial year.
With more than 925,000 CBUS members – many working in high-risk, hands-on jobs – Mr Fok said simplifying the tax treatment on insurance claims is a practical way to provide them better support.
“Insurance inside super is a vital safety net for members whose working lives are cut short due to injury or illness,” he said.
“As claims grow and costs rise across the industry, we want to make sure the system works as simply and clearly as possible for the people who rely on it.”
Retirement confidence remains another key focus for CBUS.
“Members tell us they’re unsure about key parts of retirement, including how and when to access the Age Pension,” Mr Fok said.
“Simplifying means testing and allowing super funds to help with applications would make a meaningful difference for thousands of Australians approaching retirement.
“And letting members make super contributions from occasional work would give them a smoother transition into retirement – and help us support them better along the way.”
In its pre-budget submission (available here), CBUS has also reiterated its calls for a crackdown on social media lead generators pushing Australians toward high-risk schemes, and for changes to ensure products meet consistent, transparent standards.
Media enquiries: media@cbussuper.com.au or +61 3 9100 4930
Case study – same member, very different outcomes
- Age 40
- $50,000 in super ($50,000 taxable)
- $300,000 TPD insurance payment
- Eligible service date 1 January 2024
- Date last worked 1 January 2026
| Member commences pension with existing fund | Member rollovers to another fund and commences a pension | Member withdraws entire amount as a lump sum | |
|---|---|---|---|
| Taxable component | $350,000 | $163,838 (47%) | $163,838 (47%) |
| Tax free component | $0 | $186,163 (53%) | $186,163 (53%) |
| Tax paid | Taxable component ($350,000) income taxed at marginal tax rate with 15% offset | Taxable component ($163,838) income taxed at marginal tax rate with 15% offset | Taxable component taxed at 22% - $36,044 |
* Case study for illustrative purposes only
Cbus Super is the leading Industry Super Fund representing those that help build, maintain and shape Australia. As one of Australia’s largest super funds, we provide superannuation and income stream accounts to more than 925,000 members and we manage more than
$110 billion of our members’ money (as at 31 December 2025). As of April 2022, Cbus merged with Media Super and offers Media Super products. In May 2023 Cbus Super successfully completed its merger with EISS Super, welcoming 17,000 new members and establishing itself as the leading fund for energy and electrical workers in Australia.
Issued 3 March 2026. United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 as trustee for Construction and Building Unions Superannuation Fund (Cbus and/or Cbus Super) ABN 75 493 363 262.