Consumer Action Law Centre and Financial Rights Legal Centre made a joint submission to the Senate Economics Legislation Committee’s inquiry into provisions of the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019.
We strongly support the objective of preventing unnecessary and high insurance premiums from eroding superannuation account balances, particularly for young people.
This submission focuses on the interests of people who are on low incomes or have low superannuation balances. Our key consideration in assessing these reforms is ensuring that people who are financially vulnerable continue to be assisted by insurance in their superannuation, which can have a life-changing effect for families struck by injury, illness or death, while not having their superannuation balance eroded by insurance premiums.
Our main concerns with the Bill are:
- The need to maintain default insurance for active superannuation accounts with balances under $6,000
- The risk that problems with the implementation of the ‘Protecting Your Super’ reforms will be repeated with this Bill unless the compressed timeframes are extended and quality of communications from superannuation trustees to fund members significantly improves.
We remain deeply concerned that many Australians in vulnerable circumstances did not read, understand or even receive a notice about the Protecting Your Super changes and therefore did not make an informed choice about their insurance needs.
These problems must not be repeated in the implementation of this Bill.