AHMF: Superannuation and insurance for PWCs

Introduction
Superannuation Benefits
Superannuation Disability Claims
Government Superannuation Funds
Personal Insurance Benefits
Superannuation/Insurance and Centrelink
Superannuation/Insurance and Returning to Work
CFS/Disability Advice Service

• One of the biggest legal issues facing people living with CFS/ME is access to superannuation and insurance benefits. Whether claiming their preserved superannuation contributions, total and permanent disablement lump sums, or insurance income protection payments, people with CFS/ME often have problems with superannuation funds and insurance companies.

• This pamphlet gives you general information about superannuation and insurance policies, superannuation contributions, how to make claims, particularly for disability benefits, the effect on Centrelink payments and what happens if you return to work.

• The pamphlet also includes details of your rights of appeal and the CFS/Disability Advice Service.

(1) Introduction

• Since 1992, work superannuation has been compulsory. Employers must pay contributions increasing to 9% of salary by 2002/3 into a superannuation fund for their employees if they earn at least $450.00 per month.

• Most Superannuation Funds also include disability lump sums if you can't keep working because of injuries or illnesses. They "top-up" the contributions in your Fund.

• Some Superannuation Funds also have disability pensions paid for two years or more and death insurance benefits.

• Many people living with CFS/ME may be able to claim a lump sum or pension if they have any superannuation policies.

• But many people don't know that they can claim disability benefits from their superannuation or when they can get a payout of their contributions.

• Benefit statements are sent out by Superannuation Funds every year, although some statements are hard to understand.

• If you are not sure whether you have disability benefits or if you can't find any statements, ask for help.

(2) When Must Superannuation Contributions Be Made?

• Under the superannuation laws, your employer must usually pay superannuation contributions into a Fund for you at least every year.

• However, many employers have agreements with Superannuation Funds to pay contributions more often e.g. monthly.

• Some industrial awards also say that employers must pay superannuation contributions more often.

(3) What if Superannuation Contributions Aren't Paid?

• If your employer doesn't pay superannuation contributions into a Fund for you, you should contact the Australian Taxation Office and tell them.

• They might ask you to fill in a form and they should try to collect the contributions from your employer and pay the money into a Superannuating Fund for you.

• However, it can take a long time for the ATO to collect the money and if your employer has gone out of business, the contributions might never be collected. You might also lose valuable disability and death cover.

• 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.

• It is very important to make sure your employer keeps paying the contributions by regularly checking with the Superannuation Fund and checking your benefit statements. If the contributions aren't being paid, get help straight away.

(4) Superannuation Contributions Payouts

• Your contributions paid up to 1 July 1999 can be paid when you leave a Superannuation Fund.

• However, employer contributions must usually stay in a fund until age 55 or 60.

• The exceptions are if:-

(i) You have been on Centrelink payments for at least 6 months and can't pay your living expenses (or 9 months if over 55 years and 9 months of age up to July 2001).
(ii) Your house is about to be repossessed by a lender.
(iii) You need money for palliative care, funeral expenses, modifications to your house or car or medical and transport expenses for treatment outside the public health system for yourself or dependents.
(iv) You are permanently incapacitated.
(v) You have an account balance of less than $200.00.

(1) Permanent Disability Benefits (TPD)

• To get a disability lump sum you usually have to show you can't ever go back to your old job or other suitable work that fits your education, training or experience (called TPD benefits).

• However, you don't have to be unfit for any work at all.

• For example if you have only worked as a labourer or process worker you will only have to show that you can't do manual work again to get a disability lump sum. If you don't have the skills to do office work, it won't matter if your doctors say you can do that work.

• It doesn't matter how your CFS/ME occurred and all disabilities and illnesses can be used for a superannuation disability claim.

• You don't have to show you will definitely never work again. It is enough if, on the balance of probabilities, your CFS/ME is not likely to improve in the forseeable future to the point where you could return to work.

• Many people on Centrelink Benefits will be able to claim.

• Many people with CFS/ME may be able to claim disability benefits—although proving permanency can be a problem.

• Relevant factors include the period of incapacity for work, the severity and fluctuation of symptoms and your age, work and education background.

(2) Temporary Disability Benefits

• Some superannuation funds have weekly or monthly payments if you can't do your usual job.

• With some policies you have to be unfit for your usual duties although with others, it's enough if you can't do one of the duties necessary for your job.

• The payments can be up to 75% of your wage and may be paid for up to two years or perhaps even to age 65.

• Under some policies, to get payments after two years, you must be unfit for your usual job or any other suitable work that fits your education, training or experience.

• Temporary payments might stop if your job finishes and some payments are offset against workers' compensation or Centrelink payments.

(3) Making a Disability Claim

• You can usually make a claim at any time, although it's better to make a claim as soon as possible.

• It doesn't matter if you have been paid out your superannuation contributions even if that happened a long time ago.

• Disability claims can also be made by the estate of a person after they die.

• There will be claim forms to fill in and medical reports and other papers to send in.

• It is important to give the right information and reports to help a disability claim. In particular, it's important for medical reports to support the definition of disability in the policy.

• It may take many months before a decision is made and you may be asked to go to some medical examinations.

• If a claim is rejected, you can lodge a Complaint with the Fund.

• If the claim is still not successful, you can appeal to a Court or the Superannuation Complaints Tribunal, although time limits might apply. Many appeals win or are settled.

• Get help with a claim or appeal.

(1) New South Wales

• New South Wales State public servants have been covered by superannuation schemes for many years.

• Schemes such as the State Superannuation Scheme and the State Authorities Superannuation Scheme offer generous defined benefits including invalidity benefits paid if you are permanently or temporarily unfit for work.

• However, most New South Wales state public servants are members of the First State Superannuation Scheme which is an accumulated contributions superannuation fund. It pays lump sum benefits on resignation and includes TPD lump sums and temporary disability insurance benefits.

• The claims process for disability benefits is the same as for other superannuation schemes—except that appeals are heard by the New South Wales Industrial Relations Commission and time limits might apply.

(2) Commonwealth

• Most Commonwealth public servants are members of generous defined benefit schemes — C.S.S., P.S.S. or the Military Superannuation and Benefits Scheme.

• These schemes include invalidity benefits 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 contributions scheme, AGEST, which includes a TPD lump sum.

• The claims process for invalidity benefits is the same as for other superannuation schemes. Appeals are heard by the Superannuation Complaints Tribunal but time limits apply.

(1) Introduction

Some people with CFS/ME may be able to claim disability benefits from other insurance or superannuation policies they have.

(2) Types of Insurance Policies

• Some people have their own superannuation or life insurance policies which may include disability lump sums or premium waiver benefits.

• Most self-employed people and other people in the work force have income protection insurance to cover them if they can't work.

• Banks and finance companies ask their customers to take out insurance to cover mortgage or loan repayments if they can't work.

• Some credit cards include disability lump sums and some banks, employers, unions, credit unions and sporting and social clubs have disability insurance policies for their members.

(3) Making Claims and Appeals

• Insurance disability claims can usually be made at any time although it's better to make a claim as soon as possible.

• There will be insurance claim forms to fill in and medical reports and other papers to send in to the insurance company.

• It is important to give the right information/reports to help a claim—particularly medical reports supporting the definition of disability in the policy.

• It may take many months before a decision is made and you may be asked to go to some medical examinations.

• If an insurance claim is rejected you can lodge a Complaint with the insurer.

• If the claim is still not successful, you can appeal to a Court or to an industry complaints scheme (FICS or the IEC), although time limits might apply.

• It is important to get help with a claim or appeal.

(4) Getting New Insurance or Superannuation Policies

• If you already have CFS/ME, it may be difficult to take out a policy with disability or death benefits.

• If you try to take out your own insurance or superannuation policy, you will usually have to fill in a medical questionnaire to work out the health risks.

• If you know you have CFS/ME, you may have to tell the insurer and they may then refuse to cover you for disability payments.

• If you knew you had CFS/ME when you joined but didn't tell the insurer, they may refuse to give you a payment—although not always.

• However, it may be possible to get disability and death cover by joining a "group" superannuation or insurance scheme—e.g. with your employer, union or credit union.

• In such schemes, you may be offered automatic cover without any health tests or questions.

•If you want to take out a private insurance policy, it's usually best to approach an insurance broker, rather than apply direct to insurance companies.

(1) Superannuation Lump Sums

• A superannuation lump sum payout will usually be taken into account in the Assets Test to work out your Centrelink payments.

• However, if you are under 55 and 9 months of age and keep the money in a Superannuation Fund it won't count as an asset until the money is taken out or at least until you reach 55 years and 9 months of age.

• As from the 1st of July 2001, this age limit is lifted to the normal retirement age, i.e. sixty-five for males and sixty-one and a half for females.

(2) Superannuation Pensions

• Superannuation pensions are usually treated as income and may reduce your Centrelink payments.

(3) Insurance Lump Sums

• An insurance lump sum payout will be taken into account in the Assets Test to work out your Centrelink payments.

(4) Insurance Income/Pension Payments

• Insurance income replacement payments are usually treated as income and may reduce your Centrelink payments.

• If you have stopped work because of CFS/ME but your health improves and you feel you can go back to work, there is nothing to stop you from doing so.

• If you do go back to work and you have already been paid a superannuation or insurance disability lump sum, you will not have to repay the lump sum.

• If you are receiving a superannuation or insurance pension, you would have to tell the Fund or insurer that you are returning to work.

• If you return to work and you are earning more than $450.00 per month, your employer will have to pay superannuation contributions again.

• Your new Superannuation Fund may also include death and disability benefits even though you already have CFS/ME or even if you have previously been paid a disability benefit.

(1) Need to Get Advice?

• Many people don't know that they can claim disability benefits from their superannuation or insurance.

• If your work is cut short because of CFS/ME you won't have enough superannuation to live off. Any extra disability benefits will help a lot.

• If you have any disability insurance policies, it will be important to maximise the benefits you can claim.

(2) Where Can I Get Help?

• A free superannuation and insurance advice service has been set up to provide legal advice to people with CFS/ME and others.

• The CFS/Disability Advice Service offers free legal advice to people living with CFS/ME, their family and friends and health providers.

• You can call from anywhere in New South Wales toll free 1800 810 812.

• We will look at your papers and give you free advice and assistance with any claims/appeals on a "no win, no charge" basis. *

Written by John Berrill and Sarah Costanzo
Maurice Blackburn Cashman, Solicitors (02) 9261 1488
and members of the Chronic Illness Alliance Superannuation Planning Group

The Information in the pamphlet is current as at June 2001
* Some conditions apply