• Elna van Wyk

Losing your income due to COVID-19 doesn’t mean you can claim disability – here’s why

The labour court has been busy lately with numerous cases being battled out as many employers try to enforce a no-work-no-pay principle during lockdown in an effort to alleviate some cost pressures. Momentum Corporate reported that up to 25% of its employer client base have asked for some form of relief in terms of premiums and retirement contributions. But the insurer is concerned that there could be a looming influx of unfounded disability claims especially where employees designated as “vulnerable” are put off work for long periods with no income.

“We saw requests from employers for retirement fund contribution relief peak at about 25% of our employer client base. Of those employers who have requested relief, more than half have put their staff on unpaid leave,” said Elna van Wyk, Head of Group Disability and Underwriting at Momentum Corporate. “Although its trending down now as the economy has begun opening up again, we are concerned by an increasing trend for high risk employees who have been put off work with no pay to try to claim for disability,” says Van Wyk.

She explains that while many employees in the ‘high risk category’ - people above 60 years and/or with pre-existing conditions such as diabetes and hypertension – can continue to work from home and not go to work, there are many industries and professions like the mining industry, hospitals, nurses and retail workers where this isn’t an option. “In these cases, where the employer enforces a no-work-no-pay principle, we are seeing employees mistakenly assuming they have a disability claim,” says Van Wyk.

But she cautions that a valid disability claim is only when people become disabled due to COVID-19. “The definition of disability in group insurance policies relates to the ability to do one’s own or any reasonable occupation. This definition is applied when assessing disability claims, including those related to a COVID-19 diagnosis. Based on COVID-19 cases to date, the short duration of the illness means most affected people will be able to return to work within the waiting periods for disability. Insurance in principle pays valid claims for insured events that have happened, and not for anticipated events,” explains Wan Wyk.

She adds that Momentum Corporate group insurance policies do not have exclusions for viral infections and illnesses. This means valid death or funeral related claims due to COVID-19 will be paid.

She urges employees to speak to their employers, or benefit counsellor or their group financial adviser to understand the benefits they have available to them to help them this this tricky time.