02 May 2016
Submission to The Senate Economics Committee Inquiry into Scrutiny of Financial Advice - Accessing superannuation and insurance through the terminal illness provision
In 2015, BCNA was instrumental in having the legislation that allows access to superannuation under the terminal illness provision changed. Following our representations to then Assistant Treasurer Hon. Josh Frydenberg, the Government amended the legislation to change the life expectancy provision from one year to two years. The intention of this change was to make it easier for people with a terminal illness to access their funds earlier should they need to.
We remain concerned however with the complexity of application processes and delays in payouts.
There have also been some unintended consequences around access to insurance payments connected to superannuation policies. Although superannuation can now be accessed within 2 years of one’s life expectancy, the same time limit does not currently apply to insurance benefits that may be attached to superannuation policies. Currently, many super funds will only pay out death benefits (insurance) to people with a life expectancy of 12 months or less. This means that if a person withdraws all of their superannuation benefit and does not leave money in the account to pay the insurance premiums, their insurance policies could lapse.
BCNA has provided a submission to a Senate Committee inquiry outlining our concerns about the complexities in accessing superannuation and insurance, and making a number of recommendations to improve processes for people living with a terminal illness.
- That the Australian Government develops a taskforce of key stakeholders,including health professionals, Government officials, consumers and representatives of the superannuation and insurance industries, to develop national standards to deliver a more streamlined, less complicated process that would improve access to superannuation and associated insurances for all Australians living with a terminal illness.
- That resources explaining these very complex issues be developed for people working in the superannuation industry and Centrelink staff so they can give accurate and appropriate advice on accessing superannuation and associated insurances to people living with a terminal illness.
- That resources explaining these very complex issues are developed for the general public, and are well promoted.
- Read BCNA’s submission to The Senate Economics Committee inquiry into Scrutiny of Financial Advice.
- Read a news item on BCNA’s website.
- Download BCNA’s Superannuation and Insurance payments for people with a terminal illness fact sheet.
- Read more about The Senate Committee inquiry and other submissions made to it on Australian Parliament House website.