What is Additional Death and Invalidity Cover?
Additional Death and Invalidity Cover (ADIC) is an additional insurance arrangement available to contributing members of the PSS who are under the age of 60 to get the most of their PSS membership in the event of their permanent disablement or death.
ADIC is accessed via application (underwriting) and your employer pays 50% of the standard premium for you if you are assessed a standard risk (that is, you are considered to be of good health and do not engage in hazardous pursuits). The remaining 50% of the standard premiums and any additional premium loadings are paid by you, deducted directly from your pay each fortnight. You will need to pay the entire premium during any period of unpaid leave.
ADIC is offered through group insurance arrangements which generally mean the cost of additional cover is inexpensive when compared to similar cover taken out privately. For more information on the cost of ADIC, please refer to the Death and Invalidity benefits booklet.
How ADIC works within the PSS
ADIC provides additional cover on death or total and permanent disablement, where you cannot achieve the maximum coverage that would be available through PSS. An example of this is if you joined or rejoin the PSS later in life and have a short prospective service career before turning 60.
ADIC helps to fill the “gap” between your current Accrued Benefit Multiple and the maximum amount payable from PSS. Over time, as you work longer, PSS receives more contributions and your Accrued Benefit Multiple increases. At the same time, the amount of ADIC also reduces to ensure you do not exceed your Maximum Benefit Limit (Salary increases and contribution rates will also affect your ADIC cover.
The following graphic explains the role ADIC plays in supporting the average PSS member in optimising their PSS benefit:
If you retire due to invalidity, the additional cover will make up a portion of your overall indexed pension. Where invalidity retirement is due to a terminal illness, you can choose to receive the payment as a lump sum amount. In the event of your death, your eligible spouse can take the beneﬁt as either a lump sum or an indexed pension. If you die without dependants, the beneﬁt is paid to your estate as a lump sum.
For more information on how ADIC can support you please refer to the Death and Invalidity benefits booklet.
Contributing PSS members can obtain a quote and apply for ADIC using the LIFEapp online application tool, available through PSS Member Online. This process takes approximately 20 minutes.
Alternatively, members can complete the Election to take out or vary additional death and invalidity cover [PDF 1 MB] form.
Before applying, it is worthwhile noting the following:
Your current Accrued Benefit Multiple (ABM)
Your ABM will help determine the maximum amount of ADIC you can apply for. Your ABM can be obtained from your last Annual Statement via PSS Member Online or by calling us.
PSS will confirm your allowable ADIC amount once your application has been received to ensure you do not exceed your maximum benefit limit
Exclusions that may apply
There are instances where ADIC will not be payable at claim time, this includes if you are deployed into a peacekeeping role or in active service with the armed forces.
A full list of exclusions is available within the Death and Invalidity benefits booklet
Ceasing employment - continuation of cover
Any existing ADIC in place when you cease to be contributing member will cease. Members are able to apply to the insurer (within 60 days of ceasing to be a contributing member) to continue any Death cover directly with them.
The application process
A personal medical statement is required with most applications for additional cover. You may also need to have a medical examination or produce medical reports from your doctor to establish your level of fitness to obtain the cover. The insurer will advise you if this is required.
We recommend you read the Additional Death and Invalidity Cover section within the Death and Invalidity benefits booklet to fully understand the ADIC benefit, the cost of cover and how it may help you as a contributing PSS member.
How much cover can I receive?
The level of cover available to you will be determined by your:
- present and prospective (to age 60) benefit accruals
- potential maximum benefit limit (cannot exceed 10 times your Final Average Salary)
- future salary increases
- percentage rate changes in contributions.
You can use the LIFEapp online insurance tool to determine the maximum level of cover you may be eligible for. PSS will confirm your allowable ADIC amount once your application has been received to ensure you do not exceed your maximum benefit limit
For more information on the amount of cover available to you please refer to the Death and Invalidity benefits booklet.
How much will ADIC cost?
Generally, the cost of group insurance arrangements is inexpensive when compared to similar cover taken out privately. For more information on the cost of ADIC, please refer to the Death and Invalidity benefits booklet.
You can obtain an online estimate for ADIC by clicking on the LIFEapp online insurance tool.
To apply for ADIC cover you will need to log in to PSS Member Services Online (MSO)
PSS will confirm your allowable ADIC amount and the associated premium once your application has been received to ensure you do not exceed your maximum benefit limit.
I am a non-contributing PSS member – Can I receive ADIC?
No, only contributing PSS members are eligible to apply for ADIC.
In addition, any existing ADIC in place at the time a member ceases to be a contributing member will cease. In this instance, members are able to apply to the insurer (within 60 days of ceasing to be a contributing member) to continue any Death cover directly with them.
Will my ADIC continue while I am on Leave without pay (LWOP)?
Yes - If you go on approved leave without pay, subject to the payment of premiums (you will need to pay for 100% of your premiums while you are on leave without pay), your cover will continue until your return to work date for a period not exceeding 24 months.
If your period of LWOP exceeds 24 months, you can apply to have the period of LWOP approved by the insurer. If you do not return to work by your specified LWOP end date, your cover will cease 30 days later.
Can I get Income Protection cover through PSS?
No, Income Protection is not offered by PSS.
You may be entitled to receive a partial invalidity payment. A partial invalidity beneﬁt is a form of income maintenance. It is paid as a pension where it is decided that your salary is permanently decreased because a medical condition causes you to be downgraded or to work reduced hours.
For more information on partial invalidity payments, please refer to the Death and Invalidity benefits booklet.
Do premiums count towards my contribution caps?
ADIC premiums will count towards your contribution caps from the 2017-18 financial year onwards.
The employer contribution component of the premium will count towards your concessional contributions cap, and the member contribution component of the premium will count towards your non-concessional contributions cap. If you elect to continue the coverage while you are on leave without pay or after ceasing membership, the entire premium will be counted towards your non-concessional cap.