Latest developments on the Government’s proposals to alter automatic insurance cover
As reported in our last edition of broadcast, the Government put forward proposals to alter automatic insurance cover from July 2019.
The Government’s changes are based on the view that young people are less likely to need cover and shouldn’t have insurance premiums deducted from their super. While this might be a valid view for office-based staff, many of our employers operate in industries that score among the highest for injury and workplace accidents, according to data from Safe Work Australia.
Cbus has continued to raise concerns with the proposed changes to insurance, highlighting the disastrous effects of removing default insurance for young workers in hazardous environments and for those with a low balance.
In recent weeks the bulk of the Government’s Protecting Your Super package passed through the Senate, but was changed to allow automatic insurance to be provided to young and low balance members. This is great news for Cbus members. We were pleased that the work we did with the help of many of our employers and members has helped preserve automatic insurance for members under 25 years of age and for those with account balances less than $6,000. Young workers will retain these important protections.
However, the Senate did pass legislation to alter automatic insurance cover from 1 July 2019, by preventing trustees from continuing automatic insurance to* all inactive accounts (no contributions received for 16 months including the time before 1 July 2019, unless a member has directed otherwise).
We understand that the Government may make further amendments to the legislation in 2019. Cbus will continue to make representations to ensure that the reforms are effective and in the best interest of our members.
We will continue to keep you updated about this important legislation.
*Members with Choice or MySuper products