TPD Calculator

Total Permanent Disability

Step 1: Your Situation

How the TPD calculator works

Total permanent disability cover pays a lump sum when illness or injury permanently stops you working in your own or any occupation, depending on the policy definition. This calculator estimates the size of that lump sum for a New Zealand household by adding everything the household still has to fund up to retirement, then subtracting the support already in place. The result is a gap, not a premium.

What the number on your screen means

The headline figure is your estimated TPD cover gap: the total need minus your existing support, floored at zero. Total need is your monthly living costs multiplied out to your retirement age, plus your remaining mortgage balance, plus $5,000 a year of ongoing medical and care costs, plus a one-off $30,000 allowance for home modifications such as ramps, bathroom changes and vehicle adaptation.

Existing support is subtracted from that total: any TPD cover you already hold, your current KiwiSaver balance, and half of your partner's income for every year until your retirement age. If that support already exceeds the need, the gap shows as zero rather than a negative number.

Why the time horizon drives the result

A permanent disability at 35 has to be funded for 30 years to a retirement age of 65, while the same event at 55 has to be funded for 10. Because living costs and medical costs are both multiplied by the years remaining, a younger person almost always sees a far larger gap for identical monthly spending, a household spending $3,500 a month accumulates $1,260,000 of living costs over 30 years before the mortgage is even added.

• Lowering the retirement age in the tool shortens the funding period and cuts the gap proportionally.
• The model does not apply inflation, so costs are held in today's dollars; nor does it apply investment returns on the lump sum, which partly offsets that.
• The gap is not reduced for New Zealand Superannuation, because Super begins at 65 and the model stops at your stated retirement age.

Why ACC does not remove the need for TPD cover

ACC provides weekly compensation and rehabilitation support after a personal injury, but it does not cover disability caused by illness. Multiple sclerosis, stroke, motor neurone disease and the long-term effects of cancer treatment can all end a working life without an accident being involved, and in those cases there is no ACC entitlement at all. TPD insurance is the private cover designed to fill that half of the risk.

TPD compared with trauma and income protection

The three products pay in different circumstances and are commonly held together rather than chosen between. TPD pays a lump sum once disability is assessed as permanent, which means a qualifying period has to pass before the policy definition can be met. Trauma cover pays a lump sum on diagnosis of a listed condition regardless of whether you can work. Income protection pays a monthly benefit while you are unable to work, whether or not the situation turns out to be permanent.

• TPD suits fixed, one-off costs: clearing the mortgage, funding modifications, replacing a lifetime of earnings.
• Income protection suits recurring costs and starts paying much sooner.
• Definitions matter: "own occupation" TPD is assessed against your specific job, "any occupation" against any work you could reasonably do, and the second is harder to claim on.

The assumptions behind the numbers

Every figure this calculator uses is fixed in the tool and stated below, so you can judge whether it fits your situation before you rely on it.

• Ongoing medical and care costs are set at $5,000 a year for every year until your retirement age.
• Home modifications are a single $30,000 allowance, not repeated.
• Partner support counts 50% of your partner's gross income for each year until retirement.
• KiwiSaver is treated as fully available; in practice a hardship or serious-illness withdrawal must be approved and is not automatic.
• If you leave a field blank the calculator falls back to its New Zealand defaults: age 35, retirement 65, income $85,000, living costs $3,500 a month, mortgage $370,000 and KiwiSaver $25,000.
• No inflation, no investment return, no tax and no New Zealand Superannuation are modelled.
• The calculator estimates need only. It does not price a policy, and it does not apply any insurer's underwriting or maximum sum insured.

Common questions

How much TPD cover do I need in New Zealand?

A workable starting point is your remaining mortgage plus your household living costs to retirement plus an allowance for care and home modification, less what you already hold. For a 35-year-old earning $85,000 with a $370,000 mortgage and $3,500 a month of living costs, that arithmetic runs well past $1,500,000 before offsets, which is why most people are surprised by the number.

Does ACC cover total permanent disability?

ACC covers permanent disability arising from personal injury and can provide weekly compensation, rehabilitation and lump sum independence allowances. It does not cover disability caused by illness, so conditions such as stroke, multiple sclerosis or the after-effects of cancer treatment fall entirely outside the scheme. TPD insurance exists to cover that gap.

What is the difference between own occupation and any occupation TPD?

Own occupation TPD assesses whether you can return to your specific job, so a surgeon who loses fine motor control can claim even if other work is possible. Any occupation TPD assesses whether you could do any work you are reasonably suited to by education, training or experience, which is a materially harder test and usually a cheaper premium.

Is a TPD payout taxable in New Zealand?

Lump sum personal TPD benefits are generally not treated as taxable income in New Zealand, unlike income protection benefits which are usually taxable when the premiums are deductible. Tax treatment depends on how the policy is owned and structured, particularly where a business or trust is the owner, so confirm the position with your accountant before relying on it.

Should I include KiwiSaver in my TPD planning?

KiwiSaver can be withdrawn early on the grounds of serious illness, and this calculator counts your balance as available support. Approval is not guaranteed, the funds are finite, and spending a retirement balance at 40 leaves nothing at 65. Treat it as a buffer that reduces the gap rather than as a substitute for cover.

Sources

• ACC, Calculating weekly compensation for employees: “ACC usually pays up to 80% of the income you earned before your injury”, before tax and deductions (retrieved 18 August 2026).
• ACC, Injuries we don’t cover: illness, sickness and conditions related to ageing sit outside the scheme (retrieved 18 August 2026).
• ACC, Calculating your levies: maximum liable income $152,790 for the year starting 1 April 2025 and $156,641 for the year starting 1 April 2026 (retrieved 18 August 2026).

Related calculators

• Income protection calculator

  , models the monthly shortfall while you are off work, before any disability becomes permanent.

• Trauma insurance calculator

  , sizes a lump sum for the recovery period after a critical illness diagnosis.
• ACC gap calculator, shows exactly what ACC pays and what it leaves uncovered.

Explore related pages: Life Insurance, Income Protection, Health Insurance, Trauma Insurance, Technology.