Industry fund concern at insurance changes

The Federal Government’s reintroduced legislation aimed at changing the rules around insurance inside superannuation is too blunt with time-frames that are too short, according to industry superannuation funds representative body, the Australian Institute of Superannuation Trustees (AIST).

The Government late last week reintroduced the Treasury Laws Amendment (Putting Members’ Interest First) Bill to the Parliament – something which will see insurance inside superannuation made opt-in for those with super balances below $6,000 or aged under 25.

The legislation represents a reintroduction of legislation which was subject to amendment in the Senate before the 18 May Federal Election.

AIST head of advocacy, Ailsa Goodwin, said the organisation was ramping up its advocacy because of its concerns about the implications of the legislation.

“We support the intent of this legislation to protect some members – such as young people – from paying for insurance they may not need. But the legislation is too blunt and the timeframe is too short,” she said.

“Unfortunately, younger people in risky occupations do get injured and do make claims. The legislation needs to contain exemptions for super funds with members in this category,” Goodwin said.

Backing the AIST’s concerns around the Government’s unrealistic time line, Goodwin said that if the industry did not have adequate time to deal with the changes then members would suffer.