Super news for October 2019

In new legislation that came into effect on 1 October, age pension, disability pension, widowers and carer support recipients aged 80 and older who live abroad must now submit a proof-of-life certificate within 13 weeks of their pension due date to avoid having payments suspended.

The federal government expects to net $129 million over a four-year period by cancelling almost 6000 cases of pension payments being paid to people who have died.

Social Services Minister Anne Ruston says there is no suspicion of widespread fraud being committed but many family members are unaware they need to inform the government when a pensioner passes away.

Proof-of-life certificates can be downloaded at humanresources.gov.au.

Super Consumers Australia lifts off

Australia’s first independent superannuation consumer advocacy organisation launched on 25 September to help tackle super fund lobbying.

In partnership with the consumer advocate CHOICE, Super Consumers Australia plans to give customers an independent voice to counter the well-resourced and established industry lobby groups in the superannuation market.

The organisation hopes to protect consumer interests through independent research, investigative journalism and policy development targeted at making the system work better for everyone.

Super Consumers Australia’s acting director, Xavier O’Halloran, says the market has been flooded with big industry lobby groups representing fund trustees, with combined budgets in excess of $42 million.

“There has been little dedicated consumer representation in superannuation policy for far too long,” Mr O’Halloran says. “The consumer voice has been swamped, which has resulted in really bad outcomes, such as fund performance and the types of insurances being offered to people.”

Previously known as the Super Consumers’ Centre, the launch of CHOICE Super Consumers Australia coincides with the release of research from the organisation showing that more than two-thirds of Australians want an independent body to represent them in the superannuation sector.

Mr O’Halloran says large numbers of Australians are still being defaulted into “chronically under-performing funds” leaving them about half a million dollars worse off by the time they retire.

Super Consumers Australia will work on these issues and more to ensure the retirement savings of all Australians are managed efficiently and fairly. “We will be keeping the industry on its toes,” says Mr O’Halloran. “Trustees need to be held accountable for decisions that end up costing members money.”

Super review

After nearly 30 years of compulsory superannuation, Treasurer Josh Frydenberg has announced a sweeping review of Australia’s retirement income system.

Mr Frydenberg says a major independent review – the first since Paul Keating introduced compulsory superannuation in 1992 – will help determine future policy positions by establishing a fact base of how the current system is working.

The review will examine the three existing pillars, including the age pension, compulsory superannuation and voluntary savings, but Mr Frydenberg was quick to clarify the government will not consider including the family home in the age pension assets test.

In 2018 the Productivity Commission recommended a review be conducted before the government increased the superannuation guarantee rate, or the amount of compulsory super employees must be paid. Currently that rate sits at 9.5% but is due to rise to 12% by 2025.

“The Productivity Commission has recommended we conduct a review, we’re going ahead with the review,” Mr Frydenberg says. “Our focus is on putting more money into the pockets of retired Australians.”

A consultation paper is due to be released in November 2019 and the final report completed by June 2020.

Super funds eroded by unwanted insurances

A significant number of Australians may unknowingly be paying for opt-out insurance policies that are shrinking their superannuation funds.

According to Xavier O’Halloran from consumer advocate group Super Consumers Australia, which launched last month, research shows almost a quarter of Australian workers aren’t aware they even have insurance in their superannuation.

“We see a lot of people defaulted into life insurance that they don’t realise they have and may not actually need,” says Mr O’Halloran.

Anthony Kruck is one of them. The gallery owner from the Atherton Tablelands has long been self-employed but had previously worked in the mining industry for nearly 20 years. His super fund account with Mine Super is mostly inactive, but after taking up some casual work as a handyman for a local kindergarten, Mr Kruck received a letter in August saying his retirement savings had shrunk.

Mine Super had added insurance policies for income protection, death and terminal illness to his account when they became aware of his casual job.

“They were already actioned, and premiums had been deducted from my super fund without me knowing,” Mr Kruck says. He also learnt that the price of the income protection had been calculated for an annual salary of $80,000 – more than 10 times his estimated casual earnings at the kindergarten.

“My salary at the kindergarten was just over $2000 for a period of four months,” he says. “They had obviously checked up with my employer and found my start date and backdated the premiums.”

Mr O’Halloran says these kinds of letters are all too common. “Understanding hidden costs and fees is difficult for consumers,” he says. “People aren’t focused enough on their retirement savings, and the system should really make sure for those that aren’t in focus, it still protects them.”

Mr Kruck has since opted out of the added insurances and Mine Super has refunded his payments.

“The biggest protection that should change in this sector is making sure that if people are being defaulted into insurance, that it’s actually insurance they need,” says Mr O’Halloran.

Stay Smart

When was the last time you strengthened your online passwords, reviewed your privacy settings or found out how to spot the latest phishing scam?

Held every October in Australia, Stay Smart Online Week works with governments, industry, small businesses, community groups and individuals to raise awareness about ways you can protect yourself against identity theft.

This year’s theme, ‘Reverse the Threat of Cybercrime’, empowers Australians to share their experiences and best online practices to boost their cyber resilience.

Identity theft happens when someone steals your personal information and uses it to commit a crime, such as take out a loan in your name or hack into your bank account. Here of some precautions Stay Smart Online advises:

• Regularly check your bank statements and internet bills for possible fraudulent or unauthorised activity.
• Set your social media privacy settings to ‘Private’ and make sure you’re only sharing posts and photos with people you know.
• Don’t accept friend requests from strangers.
• Limit the personal information you share on social media, such as your birthday, photos of a new house that includes your address, or your children’s school. These details are often used for security questions.
• Use strong, unique passwords for every online account. Using the same password across several accounts is like an open invitation to hackers and is particularly risky if the password for your main email account is also used for online shopping or Internet banking.
• Keep your devices updated with the latest software, including antivirus software, or set updates to install automatically.
• Beware of anyone trying to view your PIN when using ATMs or making purchases.
• Don’t use Wi-Fi hotspots while doing something personal or sensitive, such as online banking.

If you think you may have been hacked, immediately report it to your bank and to local police. You can also contact Australia and New Zealand’s national identity support service IDCare at idcare.org.