Latest developments on the Government’s proposals to alter automatic insurance cover.
Working together with other industry super funds, Cbus was successful in stopping 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 $6000
- 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 of our employers operate in industries that score among the highest for injury and workplace accidents, according to data from Safe Work Australia.
Cbus lobbied parliamentarians directly raising concerns that removing default insurance would have a disastrous effect on young workers in hazardous environments, and for those with a low balance.
Ultimately, the Government’s Protecting Your Super package passed through the Senate, retaining automatic insurance for 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 $6000. Young workers will retain these important protections.
However, the Senate did pass legislation to alter automatic insurance cover from July 1, 2019 by preventing Cbus from continuing automatic insurance to all inactive accounts (no contributions or rollovers received for 16 months including the time before July1 2019, unless a member has directed otherwise).
Cbus understands 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.