From April 01, superannuation members aged under 25, or with less than $6,000, in their fund, or with inactive accounts for 16 months or more, who do not “opt in” will see their default insurance automatically cancelled as part of the federal government’s “Putting Members’ Interests First” and “Protecting Your Super” reforms.
But national law firm Slater and Gordon said the federal government should not remove superannuation insurance from potentially vulnerable people next month, as the nation continues to face uncertainty amid the COVID-19 outbreak.
Annemarie Gambera, the firm’s principal lawyer, said some people would find it difficult to contact their super fund and elect to receive standard insurance cover during these uncertain times.
“When people are facing financial uncertainty or the potential of being ill, they need to ensure they have access to these benefits in case they lose the ability to work,” Gambera said. “While the banking, superannuation, and financial services royal commission has focused on consumers being overcharged for unnecessary fees and junk insurance by the industry, people need to understand why it’s important they are not losing the ability to make a valid claim. Losing your super insurance could have catastrophic consequences if you are injured or become ill and at risk of losing your main source of income after not being able to work.
“Many people under 25 are studying or working in casual roles in hospitality, retail, and tourism, and may need to access income protection or make a workers’ compensation claim if they find themselves out of work for weeks at a time if they contract the virus.”
Gambera said the firm believes changes scheduled for next month should be delayed “until after the COVID-19 threat has passed so families don’t miss out on insurance if a loved one were to die after contracting the virus.”
