Super industry rallies to protect automatic insurance cover for employees

Published: 11 April 2019

Sponsored content, Cbus

Working together with other industry super funds, Cbus was successful recently in preventing changes to legislation that would have left young construction workers without insurance.  

Last year the Government proposed to alter automatic insurance cover in super by:

  • Requiring new members under 25 to opt in for insurance cover with their super fund.
  • Requiring new members of any age to opt in for insurance cover where their account balance is less than $6,000.
  • Removing insurance cover from inactive accounts.

These changes were based on the view that young people are less likely to need cover and shouldn’t have insurance fees deducted from their super. While this might be a valid view for office-based staff, many employers operate in industries that score among the highest for injury and workplace accidents.

Cbus engaged directly with parliamentarians to raise concerns that removing default insurance would have a disastrous effect on young workers in hazardous environments and for those with a low balance.

When the Government’s Protecting Your Super package finally passed the Senate, automatic insurance for young and low balance members was retained. This will ensure that members under 25 years of age and for those with account balances less than $6,000 retain these important protections.

The legislation did contain an amendment, coming into effect from 1 July 2019, that will prevent Cbus from continuing automatic insurance to all inactive accounts (no contributions or rollovers received for 16 months including the time before 1 July 2019, unless a member has directed otherwise).

Further amendments to the legislation are proposed in 2019. Cbus will continue to make representation to ensure that the reforms are effective and in the best interest of members.

This information is about Cbus. It doesn’t take into account your specific needs, so you should look at your own business needs, objectives and requirements before making any financial decisions. Read the relevant Cbus Product Disclosure Statement and related documents to decide whether Cbus is right for you. Call 1300 361 784 or visit www.cbussuper.com.au for a copy.

Cbus’ Trustee: United Super Pty Ltd ABN 46 006 261 623 AFSL 233792 Cbus ABN 75 493 363 262