Superannuation & Insurance Claims

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What is superannuation?

Superannuation is a long-term savings plan to provide income for your retirement. Most workers are covered by compulsory workplace superannuation, with their employers required to pay the equivalent of at least 9% of their wage into a complying superannuation fund. Some workers make additional personal contributions. When you retire your superannuation is paid to you either as a lump sum or a superannuation pension. It may also be paid to you or your family if you die or become too ill or disabled to work.

In addition to your work superannuation, you may also have private superannuation, life insurance, income protection insurance or other insurance.

Since July 2003, employers have had to make superannuation contributions at least every three months, although many pay contributions every month.

Your superannuation salary will usually include bonuses, allowances and leave payments, but not overtime or workers compensation payments. Some industrial awards or agreements provide superannuation benefits in excess of the compulsory superannuation, for example superannuation on overtime, make-up pay or an additional 3%. Most, but not all, superannuation policies include extra benefits for disability and death. Download a fact sheet on Superannuation Disability Benefits or Superannuation Death Benefits for more information.

Many subcontractors, couriers, cleaners, owner/drivers and childcare workers also qualify as employees for superannuation.

Superannuation funds often provide for a lump sum to be paid to you if you cannot keep working because of your illness. This lump sum benefit is often provided as an 'extra' on top of your superannuation contributions. Some funds provide a further benefit of a disability pension paid for two years or more.

Choice of fund

Usually your employer selects the employment superannuation fund, although some employers will offer you a choice including an industry fund. Since 1 July 2005, many employees are able to choose which superannuation fund their compulsory contributions are paid into. However, many government employees, and those covered by defined benefit funds or awards, will have a limited choice or no choice at all. If you have a choice of superannuation funds, it's important to check the disability and death insurance cover when deciding which fund to join.

For more information and guidance about the issues surrounding superannuation choice, go to the Australian Securities and Investments Commission FIDO website. You can also find out the names of the funds and get help to check your cover.

Checking superannuation

If you are employed, or have been employed, check the benefits statements that are sent out by your superannuation fund every year. Look for your account balance, the contributions paid into the fund in the last year, and your disability and death benefits.

To find out what old superannuation funds you might have, check the Lost Members Register at the Australian Taxation Office website or ring the infoline on 13 10 20.

If you don't think you've got disability and death cover, always double check. Sometimes a statement will say 'nil cover' but you might still have had cover when you stopped work.

If you are not sure whether you are entitled to any disability benefits, or if you can't find any of your statements, you should ask your employer, your superannuation fund or someone who has expertise in this area.

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What happens if my superannuation contributions aren't paid?

If your employer doesn't pay superannuation contributions into a superannuation fund for you, you can take action.

The Australian Taxation Office (ATO) is responsible for collecting unpaid compulsory super. If you think your employer hasn't paid any or enough super, you should notify the ATO. The form to fill in is on the ATO website. You can also get it by ringing 131 020.

The ATO will record your notification, try to collect the superannuation and pay it into a superannuation fund you nominate. It can take many months to collect the money and there is no guarantee the ATO will be successful. It's important to chase up the ATO but they might not tell you much because of the Privacy Act.

Suing your employer

If you are covered by award superannuation, or if your work agreement includes superannuation, you may be able to sue your employer to collect the contributions and any insurance benefits you have lost. This is important as it is doubtful the ATO will try to collect any insurance benefits.

Your superannuation fund can also take action to recover unpaid contributions.

It's very important to check that your employer is paying superannuation contributions. Your employer has to give you a quarterly statement setting out all superannuation contributions.

If your employer goes out of business, your superannuation might never be collected. You might also lose valuable disability and death cover. Download a fact sheet on Superannuation Disability Benefits or Superannuation Death Benefits for more information.

If the contributions aren't being paid, get help immediately from the ATO, a lawyer who specialises in this area or your union.

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When can I get my superannuation?

Your personal contributions, paid up to July 1999, can be paid to you when you leave a superannuation fund.  However, your post-June 1999 contributions and employer contributions must usually stay in a fund until you reach retirement after age 55 (or up to age 60). This is called your preserved super.

Early access to preserved superannuation

You can get early access to your preserved superannuation in some circumstances, for example if:

Early access applications

Applications under (a) and (b) above are made to your superannuation fund and you will need a letter from Centrelink (called a Q230).

Applications under (c) and (d) above must be made to Australian Prudential Regulatory Authority (APRA). Application forms are available on the APRA website. You will have to show APRA you can't pay for the expenses.

Applications under (e) above can be made to the superannuation fund and you will need two medical certificates.

Applications under (g) above can be made to the superannuation fund and you will need proof that you were a temporary resident and have left Australia.

It's important to get advice from experts

You might have a separate claim for superannuation disability benefits as well as your contributions. Download a fact sheet on Superannuation Disability Benefits for more information. It's important to get advice from an expert before applying for your super.

What are superannuation disability benefits?

Most superannuation policies include disability benefits, but not all. Superannuation disability benefits are total and permanent disability (TPD) lump sums or disability pensions or both. They are usually insurance benefits that 'top up' the contributions in your fund if you have to stop work.

Total and permanent disability benefits

To get a TPD lump sum, you have to show you can't ever go back to your usual job or any other suitable work that fits your education, training or experience.

You don't have to be unfit for any work at all. For example, if you have only ever done manual work and can't do that type of work now, it won't matter if the doctors say you could do office work.

If you lose the use of your arms, legs or eyes, you might qualify for a TPD benefit even if you can still work.

There is usually a six month qualifying period, but this can be reduced in some cases.

Many people with disability will qualify for a TPD benefit, as will many people on disability support pensions.

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Total and temporary disability (TTD) benefits

If you can't do your usual job because of disability or illness, you may qualify for a total and temporary disability benefit (TTD).

Some funds have weekly or monthly payments if you can't do your usual job (TTD payments). The payments can be up to 75% of your wage and might be paid for up to two years - or perhaps even up to age 65.  There is usually a qualifying period of one, three or six months.

Payments are usually offset against workers compensation and, sometimes, transport accident and Centrelink payments. Temporary payments might stop if your employment is terminated or if you are paid a TPD benefit.

Automatic cover

Most employment superannuation funds provide disability cover without any health questions, up to certain limits. This means that if you already had disability or illness before you joined the fund, you will still be covered for disability benefits - including if you stop work because of a pre-existing injury or illness.

Making superannuation disability claims

Superannuation disability claims should be made as soon as possible. However, claims can often be made years after stopping work. It doesn't usually matter if you've already been paid out your superannuation contributions. Disability claims can also be made by the estate of a person after they die.

To make a claim, you need to fill in claim forms and lodge medical reports and other papers. You might be asked to sign medical, workers compensation and tax authorities, and to go to a few medical and rehabilitation examinations.

It's important to give the right information and medical reports and to make submissions to help your claim.

TPD claims usually take approximately 12 months and TTD claims approximately 2-4 months. However, both can be longer.

Rejected claims

If your claim is rejected, you can ask the superannuation fund to change the decision (Section 101 Complaint). They have 90 days to make a new decision.

If your claim is still not successful, you can appeal to the court or to the Superannuation Complaints Tribunal (SCT). The SCT is an alternative to the courts. It's quicker and cheaper than most courts, and cases are decided by written submissions and replies without formal hearings. However, there are limits on the types of complaints the SCT can deal with.

It is important to get update reports and make detailed submissions to support an SCT appeal. Many appeals and complaints win or are settled.

It's important to get advice from experts

Disability claims can be complicated and take a long time, but it's important that you find out about your rights. There are also time limits for appeals to the courts and the SCT. It's important to get help from an experienced lawyer before making a claim or appeal.

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What are superannuation death benefits?

Superannuation funds have death payments that are usually contributions plus any insurance benefits paid if a person dies when still in a fund, or up to six months after leaving.

Some government superannuation funds pay lump sums or pensions to surviving partners or children.

Who can claim?

A death benefit is paid to the husband/wife, de facto partner, children or financial dependants of a fund member. If there are no partners or dependants, the benefit is usually paid to the deceased's estate.

Anyone who relied on the deceased for money or was paid money by the deceased even in a small way may claim. For example, you can claim if the deceased paid your rent or some money for food or bills.

When you join a fund, you are asked to name someone you would like to get the death benefit. However, the fund doesn't usually have to follow your nomination - although a few funds do have binding death benefit nominations.

How to claim

To make a claim, write to the trustees of the superannuation fund and tell them about your relationship to the deceased. You can ask who is nominated and if anyone else has claimed.

The fund might ask you to send in papers such as a statutory declaration, a copy of a will, marriage certificate, property title, bank accounts or expense receipts. It's important to highlight how you were financially dependent on the deceased.

Appeals

The trustees of the fund decide who gets the benefits, but if you aren't happy, you can ask them to change the decision.

If you are still not satisfied, you can appeal the trustees' decision to the Superannuation Complaints Tribunal or to the courts. Many appeals win or are settled.

It's important to get advice from experts

Some superannuation death benefit claims are complicated and stressful at a very sensitive time. Strict time limits also can apply to superannuation death complaints with the Trustee and with SCT death complaints - usually 28 days.

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Am I eligible for insurance disability benefits?

Many people with chronic illness will be able to claim disability benefits under insurance policies.

Types of insurance disability policies:

Income protection insurance

Most self-insured people and others in the work force have income protection insurance.

You might be covered under this insurance if you can't do your usual job, one of the duties of your usual job or any other suitable work. If you are covered, you will receive fixed monthly payments, or a percentage of your earnings, after a qualifying period. The period of insurance payments will depend on the policy. It might be two years or five years, to age 65 or lifetime.

If you go back to work, you might still be eligible for partial disability or rehabilitation payments.

Some income protection policies also include trauma benefits for injuries or illnesses such as loss of use of limbs, Motor Neurone Disease, Multiple Sclerosis and heart attack.

Making insurance claims

Insurance disability claims should be made as soon as possible. However, claims can often be made years later. Claims can also be made by the estate of a person after they die.
 
To make a claim, you will need to fill out claim forms and medical reports and lodge other papers. You also might be asked to sign medical, Medicare and tax authorities, and to go to a few medical and rehabilitation examinations.

It's important to give the right information/reports to help your claim - particularly medical reports and written submissions supporting the definition of disability in the policy. Claims can take approximately 3-12 months.

Rejected claims

If your claim is rejected, if your insurance payments stop, are late or reduced, or if you are being mucked around, you can lodge a formal complaint with the insurer. They have 21 or 45 days to make a new decision.

If you are still not satisfied, you can appeal to the courts or to an industry complaints scheme: Financial Industry Complaints Service (FICS) http://www.fics.asn.au or the Insurance Ombudsman Service (IOS).

FICS and the IOS are quicker and cheaper than most courts and complaints are decided by written submissions and replies without formal hearings. However, there are limits on the types of complaints they can deal with.

It's important to get updated reports and make detailed written submissions to support an IOS or FICS complaint. Many appeals and complaints win or are settled.

It's important to get advice from experts

There are time limits for appeals to the courts and the industry complaints schemes.

It's important to get advice from an experienced lawyer before making a claim or appeal.

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What are government superannuation funds?

State superannuation schemes (Victoria)

Victorian public servants have been covered by superannuation schemes for many years.

Schemes, such as the State Superannuation Scheme, the Emergency Services Superannuation Scheme and the Local Authorities Superannuation Scheme, pay lump sums or pensions depending on whether you stop work because of resignation, retirement, disability or death.

The schemes pay disability pensions or lump sums if you are permanently or temporarily unfit for work or die. However, since 1994, new state public servants are members of VicSuper. VicSuper pays lump sums on resignation or retirement and includes Total and Permanent Disability and death insurance lump sums and Temporary Disability payments for up to two years.

Commonwealth superannuation schemes

Most commonwealth public servants are members of generous defined benefit schemes - CSS, PSS or the Military Superannuation and Benefits Scheme.

These schemes include invalidity benefits, which are usually paid as lifetime pensions if you are permanently unfit for your usual job or any other suitable work. Under the Military Superannuation and Benefits Scheme, the rate of the invalidity pension depends on the severity of your disability.

Some Commonwealth Government employees are members of an accumulated contribution scheme, AGEST, which includes total and permanent disability and death lump sums.

Claims and appeals

The claims process for government disability benefits is basically the same as for other superannuation schemes.

To make a claim, you need to fill in claim forms, supply medicals that support your claim and make written submissions. You might have to go to a few medical/rehabilitation appointments and sign authorities. A decision will take approximately 3-12 months.

If your claim is rejected you can lodge an internal complaint, followed by an appeal to the Superannuation Complaints Tribunal (SCT) - or to the courts or the Victorian Civil and Administrative Tribunal (VCAT) for some Victorian state superannuation schemes.

In some schemes a disability claim must be made within a strict time limit and in others, resigning might affect a claim.

It's important to get advice from experts

There are strict time limits for appeals. It's important to get advice from an experienced lawyer before making a claim or appeal.

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How can I get new insurance or superannuation?

If you already have chronic illness, it can be difficult to get disability or death insurance cover. If you try to take out your own insurance or superannuation policy you will usually have to fill in a health questionnaire. If you know you have chronic illness, you might have to tell the insurer and they might refuse to cover you. If you knew you had chronic illness when you joined but didn't tell the insurer, they might refuse to pay you.

However, it might be possible to get disability and death cover by joining a 'group' superannuation or insurance scheme, for example, with your employment superannuation, employer income protection insurance, union or credit union. You might be offered automatic cover up to a certain limit without any health questions.
 
With some schemes you are covered for pre-existing disabilities if you haven't had active medical treatment for, say, six months.

If you are thinking of leaving work, your employment superannuation might offer to continue your total and permanent disability or total and temporary disability insurance, even if you have a disability.

If you are starting a new job, check what insurance cover is offered by the superannuation funds you can join. If you are considering leaving work, check whether your employment superannuation offers an insurance continuation option before you leave.
 
If you want to take out private insurance, do it through an insurance broker - don't apply directly to insurance companies.

If you are refused insurance cover because of your chronic illness, it might be unlawful discrimination. Discrimination complaints can be made to the Human Rights and Equal Opportunity Commission or to an industry complaints scheme.

It's important to know your rights before you leave work, before you start a new job or before you sign up for superannuation or insurance.

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Will my superannuation / insurance affect my Centrelink entitlements?

A superannuation or insurance benefit might affect your Centrelink entitlements, depending on whether the benefit is paid as a lump sum or a pension.

Superannuation pay-outs

A superannuation lump sum will count towards your Centrelink assets test when you receive a pay-out. However, if you keep the money in a superannuation fund it won't count towards your assets until retirement age. Superannuation lump sum pay-outs are not treated as income.

Superannuation pensions

Superannuation pensions are usually treated as income and may reduce your Centrelink payments. Superannuation pensions paid out as lump sums may count under the assets test and not as income.

Insurance pay-outs

Insurance lump sums for disability or death count towards your assets test when paid to you. However, some insurance lump sums with investment components are deemed to be income when received and may reduce your Centrelink payments.

Insurance income protection payments

Income protection payments are usually treated as income and may reduce your Centrelink payments. Income protection payments paid out as lump sums may count under the assets test and not as income.

It's important to get advice from experts

Before you get a superannuation or insurance payout, you should speak to a Centrelink officer and also get advice about how the payout might affect your Centrelink benefits. Download Free Superannuation and Insurance Advice Service for more information. As there can also be tax implications of a superannuation or insurance payout, you should check with your financial advisor.

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