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We all know that super means putting money to away to secure our future financial wellbeing. However, people often don’t know that they have insurance through their super fund, including for total and permanent (TPD) insurance and income protection insurance, that could be critical if you’re unable to work because of illness or injury. There have been a range of efforts by government in recent years to improve accessibility and awareness around super. However, trying to keep up with these changes can be challenging, to say the least. Super is often in the news, yet working out what recent developments mean for you and your family can be tricky. We don’t think that’s right – super is your money and you deserve to know about important changes that will not only affect your super balance, but whether you are insured in case you are unable to work. Let Littles break it down for you! This blog considers three key changes introduced since 2019, and what you need to know – including what you can expect from your super fund.
The ‘Your Future, Your Super’ reforms involved two key measures: ‘super stapling’ and the ‘YourSuper’ comparison tool.
If you’ve started a new job, you might know that previously, if you didn’t tell your new employer what super account you’d like your contributions paid into, they could automatically pay them into a new account of their choice. As a result, many people ended up with multiple different super accounts that they were often unaware of or forgot about. This is all changing! From 1 November 2021, if you don’t nominate a super fund when you start a new job, your employer may have to check with the Australian Taxation Office (ATO) and ask if you have an existing account from a previous job. This new process is being called ‘super stapling’ and will mean that you have a ‘stapled super fund’, which will follow you through various jobs.
Our takeaway: This is a positive change, ensuring that super you’ve worked hard for doesn’t get eaten up by administrative fees and charges. You’ll also save time on chasing down lost super.
Thinking about changing super funds, or joining a new fund? The YourSuper tool allows you to compare MySuper super funds so that you can choose a super fund that meets your needs. YourSuper uses information collated and supplied by the Australian Prudential Regulation Authority (APRA) and
Our takeaway: We think it’s great to provide accessible, transparent information about super funds so that you can assess it against your own personal circumstances and needs. However, remember that before you close an existing fund, or move to a new fund, it’s important to carefully consider any impacts that doing so may have on your insurance. Many people do not know that they are often insured for things like total and permanent disability (TPD) insurance and income protection insurance through their super. Policies differ between funds and you should make sure that you won’t be worse off – whether it’s because your new policy has stricter definitions, or excludes pre-existing conditions.
If you’ve got a question about how changing super funds could affect your insurance, get in touch! At Littles, we are super experts and can do a free super check so you that you know which super funds are in your name and what insurance coverage they provide.
Our takeaway: This is another important means of raising awareness and transparency around your rights as a member of a super fund, including access to insurance. As we pointed out earlier, too many people do not know that they are often insured for things like total and permanent disability (TPD) insurance and income protection insurance through their super. Again, remember that policies differ between funds and you should make sure that you won’t be worse off – whether it’s because your new policy has stricter definitions, or excludes pre-existing conditions.
From 1 July 2019, super funds were required to ‘switch off’ all insurance which was in place for super fund members with ‘inactive’ superannuation accounts. FYI: an account is ‘inactive’ if it has not received a superannuation contribution – from you or your employer – for 16 consecutive months.
What does this mean? From 1 July 2019, all members with ‘inactive’ super accounts lost their insurance unless they told their super fund that they wanted their cover to continue. Insurance cover on ‘inactive’ accounts then stops after 16 consecutive months of not receiving a contribution. Super funds were required to send a notice, before 1 May 2019, to ‘inactive’ members advising:
Super funds have an ongoing obligation to advise you if they ‘switch off’ your insurance due to the account being inactive, in advance of taking that step.
Our takeaway: There are all kinds of reasons that super funds might become ‘inactive’ – for example, if people are made redundant. It’s important that people understand that by allowing their super account to become ‘inactive’ they are losing insurance and the options that it provides if they are unable to work because of injury or illness.
If you’ve read this blog and are wondering why you didn’t get a notice, it’s likely because the super fund didn’t send one or sent it to the wrong address; or your address details were out of date or incorrect.
Under the changes, it’s your responsibility to keep your address details updated. If you did not receive a notice because you did not update these details, you may have lost your insurance cover without knowing.
If you have lost cover, you can apply to have it reinstated. However, you may not be eligible to make claims relating to the period when their insurance was lapsed, or get cover for existing medical conditions.
People who did not get a notice because the fund failed to send one or sent it to the wrong address may still be able to elect to keep their cover or claim for illness or injuries which happened during the time that they didn’t have cover.
Do you have an injury or illness that prevents you from working, or just want to know more about what insurance you have under your super? Get in touch with Littles for a free super claims check. We can help you understand what you’re entitled to. Know where you stand, and get peace of mind.