Despite being internationally notorious for our ‘laid-back’ lifestyles, Australia has always been renowned as a hard working nation. From our very first settlers, to our modern day farmers and local business operators, Australian men and women have always toiled tirelessly to see our young nation grow and prosper into the great land that it is today. Sadly however, many Australian workers are forced to prematurely cease employment due to unforseen illness or injury every day. These are undoubtedly very difficult moments in these individuals’ lives, who are often left with no other alternative but to make a claim under their superannuation insurance policy. These insurance benefits, though often insignificant, provide eligible incapacitated workers with the lifeline they need to get their lives back on track.
It is estimated that around 75 per cent of all Australian workers have some form of insurance coverage through their superannuation fund, whether it be against income loss, total and permanent disablement (TPD), trauma, or even death. Whilst this rate of coverage is apparently high, many injured or ill workers are often oblivious to their level of cover and as a result are unaware of the benefits that they are entitled to under their superannuation polices. According to a recent study conducted by Australian superannuation journal, Super Review, less than half of all insured or ill workers were actually aware of their level of cover.
As a consequence of this universal lack of awareness, it is often the case that an injured or ill worker will seek to make a claim against their superannuation insurance policy some many months (or even years) after becoming eligible for that benefit. Presently, there is no time limitations for when a member can make a claim against their superannuation insurance, unless of course it is an explicit term of the subject policy that a claim be made at (or within) a certain time. Q-Super for example have become notorious for their “seven-year pre-existing condition exclusion” rule applying to any member who makes a TPD or death claim arising from an illness or injury occurring prior to 16 December 2013.
Presently, members’ rights to access their insurance benefits (at any time) are largely preserved by provisions contained under section 54 of the Insurance Contracts Act, which prescribe that an insurer cannot decline a claim merely on the basis of there being a ‘delay’ in bringing that claim forward. Notwithstanding this however, and in light of the increasingly high volume of ‘delayed’ claims being received, superannuation funds and insurers have begun lobbying the Government to impose limitation periods for when claims may be made. Jim Minto, Chief Executive of insurer TAL has been most vocal about this point, claiming that the greater the distance between a ‘claimable incident’ and the time which a claim is made, the harder it is for an insurer to successfully process and assess that claim. Minto further states that ‘late claims’ could have a potentially harmful effect on insurer’s costing models, namely due to the fact that they are unaccounted for when calculating their capital needs.
A recent study conducted by the Sydney Morning Herald has revealed that Australian workers are among the hardest working of their international counterparts. The study found that a typical full-time Australian worker performs more than 70 minutes of unpaid overtime a day, and that Australian workers have stockpiled more than $33.3 billion in leave, the equivalent of 123 million working days. The study also revealed that as a result of their work habits, Australian workers are almost 60 per cent more likely to suffer illness or injury than their international counterparts.
These findings whilst disturbing in any regard, will present obvious issues should the Australian Government decide to implement limitation periods for superannuation insurance claims. The fact that Australian workers are working longer, harder, and are significantly more prone to illness or injury when compared to their international counterparts, suggests that what limited coverage presently exists for workers under their superannuation insurance, ought not be further restricted, but rather broadened.
Put simply, it is not fair that Australia’s hard working men and women should be forced to forfeit their ‘lifelines’ (which they often do not even know exist), merely because they do not lodge their claim within a prescribed time frame. The suggestion that an insurer’s inconvenience in assessing a ‘late claim’ should take priority over, and occur at the expense of an incapacitated worker’s rights, frankly is absurd.
Written by Will Barsby
Written by Shine Lawyers. Last modified: September 26, 2018.