Littles cheat sheet: What you need to know about recent changes to super

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.

1. Your Future, Your Super

The ‘Your Future, Your Super’ reforms involved two key measures: ‘super stapling’ and the ‘YourSuper’ comparison tool.

Heard of ‘super stapling?

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.

What about YourSuper?

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

  • displays a table of MySuper products ranked by fees and net returns
  • allows you to select and compare in more detail up to four MySuper products at a time
  • links you to a super fund’s website when you select a MySuper product from the table
  • can show your current super accounts alongside other MySuper products – if you access the personalised version through myGov, and
  • provides links to help you consolidate your super accounts.

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.

2. Putting Members’ Interests First

From 1 April 2020, your super fund was required to ‘switch off’ your insurance coverage if you were a member of a MySuper  super fund and you: 
 
  • had an account balance of less than $6,000 (even if you are actively making contributions)
  • were aged under 25 years, and/or
  • didn’t make an election to have insurance in your super – that is, you didn’t tell your super fund that you wanted to keep your insurance.
 
Importantly, super funds were required to give you notice that they would be switching your coverage off! They had to write to all members with an account balance of less than $6,000 before 1 December 2019 to let them know that if they took no action or made no election, their superannuation-based insurance would cease from 1 April 2020. Didn’t hear from your super fund? If you weren’t notified of the cancellation and you have lost the right to make the necessary election to keep the cover, you may be able to claim on your policy or against your super fund on the basis that you were not notified of the cancellation.

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.

3. Protecting Your Super

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:

 

  • that after 1 July 2019, a benefit won’t be provided to them if their account has been inactive for a continuous period of 16 months, and they haven’t elected to maintain their insurance cover, and
  • how the member can elect to maintain their cover.
 

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.

Have you lost insurance coverage?

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.

Don’t delay – seek advice now

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.

Free advice and no upfront fees

Not only do we offer a FREE claims check – we handle most insurance claims on a no win, no fee basis. Our Head of TPD and General Insurance, Rowan McDonald, is an insurance law expert. If you think you might have a claim, get in touch with Rowan and his team for high quality legal advice.

Like? Share it with your friends.

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email
Share on print

Contact the Author

Topics

More Articles