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Govt acknowledges stapling impact on insurance
Cbus Super has welcomed the Your Future, Your Super (YFYS) review that acknowledges the importance of access to insurance for workers in hazardous industries.
Insurance through super had been a “key pillar” of economic security for workers in those hazardous and physically demanding industries, and Cbus was critical of the fact it was excluded from the original YFYS legislation.
In the Treasury’s review of YFYS, released in early April, it noted respondents had given feedback that stapling meant employees changing jobs could end up with inappropriate insurance cover within their super account, particularly those in high-risk occupations.
Others noted that the letter encouraging members to switch if their fund failed the performance test excluded information about the impact of switching on a member’s insurance coverage.
This included Cbus, which had made a recommendation in its submission to the YFYS review. Almost $300 million in claims were paid by Cbus for the 2021–22 year.
“The failed policy of arbitrarily stapling members to their first fund, without regard for the performance of that fund or the appropriateness of their insurance offering for the member, should be abandoned. The collective choice of fund made by workers and reflected in EBAs [enterprise bargaining agreement] should be respected as a valid form of choice,” it said in its submission.
“If recommendation one is not accepted, workers in hazardous occupations should be excluded from the stapling regime, defaulting instead into the fund named in their EBA or award.”
Cbus interim chief executive Kristian Fok said: “Statistically, the most vulnerable workers of all in the workplace are young workers new to a job. Following the introduction of stapling, Cbus has seen an increase in apprentices and young people on construction sites without any level of insurance cover for hazardous work.
“We look forward to working with government to address the pressing insurance needs of workers across Australia in hazardous occupations.”
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
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