Mr John Berrill - Employment, superannuation & insurance issues for people with ME/CFS
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This document discusses issues around superannuation and insurance for people with ME/CFS. It covers what superannuation is, the types of benefits available like total and permanent disability (TPD) and temporary total disability (TTD) benefits. It also discusses making claims, accessing super early in situations like financial hardship or terminal illness, how super interacts with bankruptcy, getting insurance coverage including through employment super funds, making terminal illness and death claims, different types of insurance policies, changes to super including the new MySuper option, and contacting Maurice Blackburn Lawyers for further questions.
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Mr John Berrill - Employment, superannuation & insurance issues for people with ME/CFS
- 1. Superannuation and Insurance Issues for People with ME/CFS September 2014 Maurice Blackburn Lawyers
- 2. Preliminary Matters What is Superannuation? – Compulsory employment superannuation since 1992 – Employer pays 9.5% of salary into a super fund (proposed increase to 12% by 2025) – Types of funds – Industry (REST, Australian Super), Government (ESSS, VicSuper, PSS), retail (AMP,AXA) – Choice of Fund | 2
- 3. What benefits are available – TPD Benefits – what are they? – TTD benefits – what are they? – Account Based cover – Multiple claims? • Yes for TPD • No for TTD/ Income Protection – Making a super claim • When should I claim? • How do I lodge the claim? • What if my claim is rejected? • Ombudsman schemes (SCT & FOS) and courts | 3
- 4. What does your Statement say? | 4
- 5. What does your Statement say? | 5
- 6. What does your Statement say? | 6
- 7. What does your Statement say? | 7
- 8. Hesta- Life Events | 8
- 9. Early Access to Super • Early Access Provisions Page 9 Financial Hardship - Centrelink Payments Over 55-60 - Centrelink Payments Palliative care, funeral, medical, transport and home or modification expenses To prevent a mortgagee sale of your home Permanent incapacity for work Terminal Illness Leaving Australia (temporary residents) Preserved amount less than $200 • Accessing super can affect your insurance entitlements make sure you get advice | 9
- 10. Super and Bankruptcy Page 10 A payment from a regulated super fund is exempt from creditors, so long as the payment to the member occurs AFTER the date of bankruptcy. (see s.116 Bankruptcy Act). This includes any insurance benefit that is paid by a super fund. It is important to ensure that wherever possible, a payment to a member occurs after the date of bankruptcy, otherwise they could lose some or all of the money to creditors. | 10 AFSA disagrees with the above - currently
- 11. Getting Insurance cover Page 11 Applying to an insurer can include health questions, duties of disclosure and/or exclusions Group Insurance/Auto Cover • Employment Super • Employer Schemes • Industry Schemes | 11
- 12. Terminal Illness Claims • July 2007 legislative amendments • Later changes made by Super Funds/Insurers • Diagnosis and difficulties with Terminal Illness claims • How long does a terminal illness claim take? | 12
- 13. Superannuation – Death claims • Superannuation Death Benefits – What are Super Death Benefits? – Binding and non-binding nominations – Who can make a claim? • Spouse, • de facto (including same-sex couples) • children, • financial dependants, • interdependents, • deceased’s estate – What if my claim is rejected? • SCT – 28 day time limit | 13
- 14. Different Types of insurance – Many different policies on the market and they vary greatly • Income Protection • mortgage protection • consumer credit, • trauma, • term life, • sickness, • Accident • critical illness – What if an insurance claim is rejected? • FOS or Court | 14
- 15. Changes to Super • MySuper – low cost default option – Must include disability insurance – Disability insurance required to have a definition similar to the early release provisions – Auto-consolidation – losing insurance cover potentially | 15
- 16. Questions? John Berrill, Partner, Maurice Blackburn Lawyers. Ph: 1800 196 050 Email: jberrill@mauriceblackburn.com.au Email: nmcmurray@mauriceblackburn.com.au | 16
Editor's Notes
- WELCOME
- Super funds usually have default Total and Permanent Disablement (TPD) insurance cover, many have income protection cover and most have death benefits. Most people just think of super as a savings vehicle and don’t even know these insurances exist and they’ve got automatic coverage through their job. On average, most working people have three super accounts from past and current employers - means multiple claims can often be made. Super claims can be the only or best chance of getting compensation in some cases Easier to win claims for older people, people with poor English, and people without qualifications.
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- Many workers’ rights are tied to whether the injury or illness is work-related or where it happened (road, public place etc) With super claims it usually doesn’t matter where, why or how the person became ill or injured – The main question is usually ‘Can this person work?’ The injury or illness does not have to be serious or permanent. Having access to the insurance in their super is especially important for older or severely injured workers who may find it difficult to earn a regular income If workers are waiting on the resolution of a WorkCover case, we can often pursue their super entitlements in the interim
- TPD benefit pays you a lump sum if you can’t do your usual job or any suitable work long term. The injury or illness does not have to be work-related – a heart attack, cancer, stroke, mental illness or injury suffered at home can be used for a TPD claim. Key points: It usually doesn’t matter if your injury or illness existed before you joined your super fund. A TPD claim is usually a lump sum payment. The amount is dependent on your claim – our Super team can find out for you. You only have to be unfit for the work that you’re educated, trained and experienced in. If you’ve only ever worked as a truck driver, and you would need to re-train in a completely new role, you can be eligible for a TPD claim. If your member has only ever done manual work, it doesn’t matter if the doctors says you could do office work instead. Basic tests any occupation – most common own occupation – less common
- Income protection: Insurance to cover your income if you can’t work because of an injury or sickness for any reason. You can still usually be eligible even if you have a disability. How long: covered for monthly payments for two years, five years, til age 65 or lifetime (dependent on policy). Either a flat monthly amount or up to 75% of your income Members may be eligible for partial disability benefits if the member goes back to work in less than full capacity. Some policies (but not all) exclude injuries or sicknesses you had before you took out the policy. However, if you have a pre-existing injury before taking out the policy that you do not disclose to your insurer, the may refuse your claim and try to cancel your policy. The best thing to do is always encourage members to disclose all pre-existing medical conditions. Always best to make a claim as soon as possible; most policies will specify within 90 days. Once you’ve made a claim, most are finalised within 2 to 3 months. Basic tests own occupation ‘at least one of the income producing duties’ own occupation ‘all of the income producing duties’ any occupation
- Death benefits are usually paid to the surviving partner, children or dependants, or to the deceased’s estate. You will have nominated this when you joined your super fund – however it is not binding; which means that the trustee will take them into account but are not bound by them. A dependent is: A legally married spouse De facto spouse (hetero or same sex couple) Children Financial dependents Interdependents – someone who you have a close personal relationship with, as well as live with a provide each other financial and domestic support Dependents receive a lump sum payment, which are generally tax free. The amount is disclosed in the super policy when it is taken out. If anyone other than a dependent receives a lump sum from a super death pay out, it will be taxed at 15% plus Medicare levy. If you decide to take out all of your super due to a terminal illness, be aware that this may cause you to lose valuable death and disability insurance cover. Get advice.
- Difficult claims can be won Time limits apply but can be worked around, however: The basic time limit is 6 years BUT For cases about decisions of super funds, it is 12 years It is unusual for time limits to be a serious problem Insurers of the super funds can be beaten We often run and win very old claims going back to the early 1990s We might be able to get compensation for members who lost their jobs years ago.
- Examples of when insurers of super funds can be beaten… Member tries to get back to work: not fatal to claim – can be a failed return to work Member could return to work if they were retrained: still eligible for TPD payment in most schemes WorkCover doctors say member is fit to return to work: this often happens but often the claim can still be won Worker takes a redundancy: not necessarily a problem if handled correctly – get advice Alleged fraud and non-disclosure of medical conditions: uncommon, but there are ways to fight these allegations
- Claims are sometimes rejected if the termination is classed as a resignation or redundancy Some funds require claims to be made soon after stopping work A few funds require a claim before a member stops work Doctors’ reports saying a person can return to work can make a claim harder to win, but there are ways around this Some employer-based policies have payments that end on termination of employment Get advice!
- A man was referred to Maurice Blackburn for a severe psychological issue that happened at work. The man was not entitled to WorkCover because Q-Comp held that the psychological injury was caused by reasonable management action. Having not earned an income for an extended period, the man was destitute and unable to pay his mortgage, so the bank sold his house and he was homeless. The man had no idea he had any entitlements under his superannuation – in fact, he had 3 TPD insurance policies from his past and current jobs. Maurice Blackburn obtained the necessary medical information and handled the superannuation TPD insurance claims. All of the 3 claims were successful and the man received enough compensation to buy a house and set aside money for his psychological treatments to assist him to rebuild his future. The important part of this case is that the client had no idea this insurance even existed. When we told him he had TPD insurance through his super, he still didn’t think he was entitled to it because “I just have a mental illness and there is no way anyone will believe me that I have a disability”. He was wrong, and the outcome has changed his life.