Death benefit

My partner had a fully functioning superannuation account with her boss making regular payments into it and with the recent new laws her balance was just under the $6000 and they were unable to contact her so they stopped her insurance even though she had been making the payments on the premiums for several years a short time after it was stopped the balance was above the $6000 she unfortunately passed away and when we went to her superannuation they said that she had no insurance
I am now a widow with a family to support and no insurance that my partner had in place I feel that the super fund has made a mistake
This was not some ghost account it was a fully functioning and operational account and always was with regular payments going into it and insurance in place from the day that it was started
What can we do from here to write this wrong??

 

Sorry to hear, this is something you should seek legal advice on.

 

Many funds had to change process to adopt a "opt out" default requirement for life & related cover. During the past years funds needed to contact members and make sure non-contributing members opted to retain cover or it would be cancelled. Members with old address or emails lost cover and many may not realise that from 1 July 2021 this is now effective. All those people who ignore their super corrensponsece are alos in this camp. I saw a estimate from some funds it can be as high as 30% of members. If the deceased member was impacted by this its something to explore and enquiries of the fund would assist taking the matter for legal advice eg specific dates and copies of what was sent. If the fund cant produce that then there may well be solid grounds that they acted against the interests of the member.

Funds do keep very comprehensive records of history of contact when members cease to pay super or act of notifications. The obligation is upon a member to maintain details to avoid a member being classified as lost and super laws specifically require a fund to stop insurance or even rollover funds in some cases when members dont reply. Some funds also contain contribution rules which consider contributions mean a member is not lost and are defaulted to continued cover when coributions are maintained. Low balance accounts however are governed by further specific rules which I copy below

The government has introduced additional rules to insurance within super as part of new legislation called Putting Members’ Interests First. The rules aim to protect young members and members with small balances from having their super accounts eroded by fees for insurance cover that they might not be aware of or may not need, giving members’ super the best chance to grow.

From 1 April 2020, super funds will no longer be able to offer insurance automatically to new members if any of the below applies:

• the new member is under 25 years old;
• the account balance for the new member is less than $6,000.

For existing super members, irrespective of their age, the new rules mean insurance will be cancelled if they have a super balance below $6,001 unless:

• their balance reached $6,000 at any point from 1 November 2019 and before 1 April 2020,

or

• members have 'opted in' to keep their cover before 1 April 2020, due to low balance,

or

• members have ‘opted in’ to keep their cover before 1 November 2019, due to their super account being ‘inactive’. Inactive means no contributions or rollovers have been received in a super account for a continuous period of 16 months.

Any existing members with super balances above $6,000 on 1 November 2019 are not impacted.

 

Thanks very much for your reply Paul
I have seen some of the information that you have put in your post in my recent research to find out where we stand . This account was not in active it always had regular contributions going into it from her employer and the balance was just below the $6000 when they cancelled the insurance and now is certainly above the $6000.
I have lodged with the afca and will see where that takes us
I can understand them protecting in active accounts but accounts that are completely active I do not understand how they think this will help us . We as a family are dealing with enough at the moment without having this on top of it as well

 

I was just saying this very issue to my wife last night when she asked about the issue. She also didnt realise that MONTHS ago she opted in. She commented how easy it would have been to ignore it ...or like us our address changed !! Lucky not back then.

I suspect a bunch of people will very unhappy whe they find they arent insured and assumed they might have been. The funds however know this and have largely kept immaculate records to defend a claim and ensure they acted to meet their legal obligations. Its quite concerning. The Govt did this to protect certain member accounts being eroded and in return it has some issues which means nsurances can be cancelled. There is also a proposal to force multiple funds to close and roll into one. Many people hold insurance in these domant fund accounts. And cannot get replacement cover. I am one.

 

I can understand dormant accounts being stopped to save funds being lost
But this was not a dormant account rather an account started 3&1/2 years ago and funds being regularly added to and insurance premiums being paid and now above there $6000 threshold that triggered it to cut off it should have been restarted soon after it was cut off because it went above the magic number

anyway thanks people for being a sound board