FAQs about recent Protecting Your Super and insurance and legislation changes
On 1 July 2019, the Federal Government’s Protecting Your Super (PYS) package came into effect. PYS aims to reduce the number of duplicate accounts in the super system and reduce erosion of account balances by fees and insurance premiums.
Also, on 1 August 2019, we updated our insurance offering.
We answer your questions about what’s changed, and why.
From 1 July 2019:
- Administration and investment fees and costs are capped at 3% for balances under $6000
- Insurance will be cancelled on super accounts that have been inactive for 16 continuous months, unless you let us know you want to keep your cover, or you contribute or transfer money into your super account before your account becomes inactive for this period
- Inactive low balance accounts (under $6000) will be transferred to the Australian Taxation Office (ATO), which will search for and attempt to consolidate your super into an active account.
The Protecting Your Super laws came into effect on 1 July 2019.
Under the laws, we’re to cancel your insurance cover if your account becomes ‘inactive’ (i.e. we haven’t received a contribution or rollover for you for at least 16 consecutive months).
Under Protecting Your Super laws, you can prevent your cover being cancelled if you let us know you want to keep it before your account becomes inactive for 16 continuous months. We'll write to you before your cover is cancelled. Follow the steps in this communication or complete and return a Keep or cancel my cover form.
Once you’ve let us know you’d like to keep your insurance, it won’t be cancelled – even if your account stays inactive – as long as you have enough money in your account to maintain the cover and your cover isn’t cancelled for another reason under our policy.
If you're an Employee Plan member or part of a corporate insurance arrangement, we will reinstate insurance cover when we receive a contribution for you from your employer. Keep in mind terms and conditions will apply, including an ‘active employment test’, and there will be a break in your cover. You’ll also only be able to reinstate any income protection cover for a period of up to 6 months after your cover ceased. Reinstated cover may be less than what you held previously, and in some circumstances, cover could be limited cover. All the details are included in your Insurance Guide.
You can also apply for new cover at any time, subject to eligibility.
We will always try our best to contact you if you are at risk of losing your insurance cover so that you can advise us of what you would like to do.
If your account currently:
- Has a balance less than $6000
- Doesn’t have insurance, and
- Hasn’t received any contributions or rollovers for 16 months
AND you haven’t:
- Changed your insurance or investment options or added or changed any binding beneficiaries within the last 16 months, or
- Made an election in the last 16 months to the ATO that your account is not an inactive low balance account
Then it will be classified as an ‘inactive low balance account’ and your super balance will be transferred to the ATO. You can prevent the transfer if you take action before the transfer occurs (see ‘How can I prevent my super balance being transferred to the ATO under Protecting Your Super laws?’ below).
Inactive low balance accounts will be determined at 30 June and 31 December each year and transferred to the ATO by the following October or April respectively, unless they stop being inactive, or you declare in writing that you don’t want your super treated as an inactive low balance account, before the transfer happens.
To keep your account active, you could:
- Choose CareSuper as your fund to which your employer pays your super
- Confirm that you wish to keep any existing insurance cover, or apply for and be accepted for new insurance cover on your account
- Make a contribution or roll money into your account
- Change your investment option
- Make or change a binding beneficiary nomination.
Before making changes to your account, you should consider your personal circumstances and whether these changes are right for you. We recommend you seek professional advice before making changes to your account.
At CareSuper we conduct periodic reviews of our insurance where we look at several factors, including how appropriate our offering is to our members’ needs, the product features we’re offering, the cost of cover and external factors like changing legislation. We also took into account the Insurance in Super Code of Practice, which aims to ensure insurance fees relate to the age and claims experience of members.
Following our latest review, our offering was made simpler and more appropriate for our members at different ages. We also made changes to align with the Federal Government’s recent Protecting Your Super package.
On 1 August 2019, age-based cover replaced unit-based cover for standard death and TPD insurance. Rather than being allocated units of cover, you would have received an amount of cover, based on your age, that changes as you get older.
You should refer to your Product Disclosure Statement and Insurance Guide for more information and to see how the amount you’re insured for and the cost of cover will change as you age.
From 1 August 2019 the fees for income protection cover are annual gender-based fees calculated for each $100 per month of income protection cover you hold. As well as gender, fees will continue to be based on age, occupation, waiting period and benefit period.
There were no other changes made to income protection cover. This means prior limits continue to apply. For example, you can apply for cover of up to 85% of your income, up to a maximum income of $423,530 per annum, plus a further 60% for the next $200,000 per annum of your income for the first two years of the benefit payment period.
Previously you were able to apply for the early release of your insured death benefit if you suffered from an illness that would lead to your death within 12 months (eligibility conditions apply). From 1 August 2019, that timeframe changed to 24 months. This means terminally ill members (if eligible) may be able to access their death cover earlier than was previously the case.
If you don’t identify as male or female, you can give us a call and let us know. We’ll then discuss with you what fees will apply in your circumstances.
Our new offering considers members’ needs at different ages, product features, cover amounts and costs — as well as external factors. We’ve also seen major legislative changes which require insurance cover to be cancelled in certain circumstances.
Our new offering takes all this, in addition to recent claims experience, into account. For some members it meant the cost of cover increased.
We also more closely aligned our standard insurance cover levels to what our members typically need at different ages. Typically, our younger members who are just starting out are less likely to need as much insurance, so we reduced the standard cover for these members.
Our offering from 1 August 2019 aims to meet the needs of most of our members, but you can always change or opt out of the standard age-based insurance design if it doesn’t suit you.
If you have an insurance claim in progress on 31 July 2019, you’ll be covered under the insurance offering that applied at the date of the event. If you’re unsure about the impact of these changes on your claim, call us on 1300 110 650.
You'll generally be covered under the insurance offering that applied at the date of the event. If you’re unsure about the impact of our insurance changes on your claim, call us on 1300 110 650.
Under government legislation, when your employer selects a super fund for your workplace, they must choose one that provides a level of insurance cover automatically to eligible MySuper members. We provide our Employee Plan members with automatic ‘standard’ death and total & permanent disablement (TPD) cover when they join. How much you’re automatically covered for depends on your age.
What are the benefits of insurance through super? Well, most likely you insure your car and home. Insurance through super allows you to insure something even more important – your life and ability to earn an income. With insurance through super you get access to the competitive premium rates we’ve been able to negotiate and the convenience of paying for those premiums from your account.
If your employer is making super contributions for you, there’s a good chance you’re an ‘Employee Plan’ member – and it means you probably have automatic standard death and TPD cover as part of your super account.
If you are not linked to an employer and make your own contributions to your super, or you become a CareSuper member due to a family law split, you are a Personal Plan member.
Personal Plan members do not receive automatic insurance but can still apply for cover (subject to assessment and acceptance by our insurer).
Income protection cover provides a temporary replacement income if you are unable to work due to illness or injury (specific conditions apply). The purpose of income protection is to help you continue to pay your bills while you’re taking the time to recover and recuperate from an injury or illness.
Find out more about income protection here or refer to your Product Disclosure Statement and Insurance Guide for more information.
Death cover provides a lump sum payment to your beneficiaries if you die, to help ensure the wellbeing of the people who depend on you (certain restrictions apply). You may be able to access your death benefit if you’re terminally ill (conditions apply).
Total & permanent disablement (TPD) cover provides a lump sum payment if you are never able to work again due to injury or illness. This payment could be used to cover medical bills and to ensure the overall security of your family and your home.
If your employer has established a particular insurance arrangement for you through your CareSuper membership, this is called a ‘corporate insurance arrangement’ (CIA). This insurance arrangement may differ from the standard insurance arrangement available to Employee Plan members. If you’re a member of a CIA, you can read more about your insurance in your Corporate Insurance PDS and Corporate Insurance Guide, as well as your annual statement.