Proposed Treasury review of exclusions in superannuation insurance offers no protection for workers in hazardous industries

A proposed review by Treasury of occupational exclusions in insurance as part of the Your Future Your Super bill offers no security for the 2.7 million^* Australians working in physically demanding and hazardous occupations such as the building and construction industry.

A review does not negate the fact that once implemented, the government’s ‘stapling’ legislation will lead to serious consequences for workers moving into hazardous jobs.

Now at risk is access to critical insurance for young workers who move into a hazardous sector at a time of life when they are at higher risk due to inexperience – and unengaged with their superannuation and retirement planning. Cbus is one of few funds that can now provide important default cover for young workers following the exemption provided by the Parliament and implemented just over a year ago.

Justin Arter, Cbus CEO says, “Cbus is proud to have been advocating for our members and for the high quality life and TPD cover we provide throughout this debate and to hear the support for our offering in both Houses.

“But the best public policy should mitigate unintended negative consequences. Negative consequences are now the risk for ‘stapled’ superannuation account holders who move into building and construction and other hazardous industries.

“Stapled to a fund without industry specific insurance tailored to hazardous jobs young Australians and their families will suffer financially if they are seriously injured or killed at work with no default coverage.

“If the government’s ‘stapling’ proposal does commence 1 November 2021, surely hazardous workers should be made exempt until at least after the exclusions review is complete.

“A Treasury review of unspecified outcome or timing will do nothing to mitigate the immediate impacts for workers in hazardous sectors. Within months workers in hazardous occupations are at risk of being stapled to a fund containing exclusions or unfavourable terms and conditions because their existing insurance cover has not been tailored to their new job. Despite paying insurance premiums, stapled members in heavy blue-collar occupations or people working at heights may not be covered. Members and their families will likely only discover these exclusions when tragedy has struck – and they try and fail to make a claim against cover they believed they had.

“A consequence of stapling will be an increase in desperate and grieving families being forced to face acute financial hardship and often a loss of their family home.

“Young workers who will move into hazardous sectors like building and construction deserve superannuation legislation that recognises their unique needs.”

^*Figures are based on analysis of Safe Work Australia’s Work-related Traumatic Injury Fatalities data from 2016 and 2017 (the most recent available for each occupation), as set out in Tables 1 & 2, Actuaries Institute Information Note - Dangerous Occupation, November 2019, https://www.actuaries.asn.au/Library/Standards/MultiPractice/2019/INFinaltoAI261119.pdf

Media enquiries:

Tristan Douglas, 0417 736 434 or tristan.douglas@cbussuper.com.au