Cbus figures show a year of insurance impact for workers in hazardous occupations

IT IS A YEAR since a policy to protect workers in hazardous occupations has been in operation. In welcoming the many workers who have benefited from this policy Cbus is concerned proposed legislation could put that vital insurance protection at risk.

Under the Putting Members Interest First Bill, the Senate Crossbench and the Government, together with the ALP and Greens Senators, voted to recognise the importance of insurance for super members in hazardous jobs.

Due to this recognition and amendment, from 1 April 2020 workers in dangerous jobs have been able to keep their automatic entitlement to insurance if they were under 25 years old (via the Dangerous Occupation Exception).

Claims made and paid out by Cbus in this period include tragic incidents of teenagers, fathers and carers dying during this period, and includes members being killed or injured at work.

Just for the building and construction sector that Cbus covers, the Dangerous Occupation Exception has allowed 115,800 building and construction workers to obtain or retain vital insurance. A total of $7,256,200 (58 claims) has already been paid to members or their beneficiaries between 1 April 2020 to 31 March 2021 that would not have received any insurance at all, had the exception not been passed into legislation.

About 93,000 existing Cbus members were able to retain their insurance from 1 April 2020 due to the existence of the Dangerous Occupation Exception. 22,800 new members who joined Cbus from 1 April 2020 to 31 March 2021 were provided cover automatically under the Dangerous Occupation Exception.

Cbus is concerned that the availability of insurance for workers in hazardous occupations is now at risk of being undermined with the stapling proposal in the Your Future, Your Super Bill. Stapling would link a worker to their first super account for their first job, unless the worker actively chooses another fund (unfortunately, most young workers don’t). The proposed stapling measure puts at risk young workers new to building and construction, who are at risk of no longer receiving automatic, affordable insurance cover through the Dangerous Occupation Exception.

In addition, many funds’ policies – including those funds that workers are most likely to be stapled to under Your Future Your Super – contain exclusions or unfavourable terms and conditions because insurance cover has not been tailored for their hazardous industry. This means that despite paying insurance premiums, workers in higher risk heavy blue-collar occupations or people working above 15 metres are not actually covered. Members and their families typically only discover these exclusions when tragedy has struck, and they try, and fail, to make a claim against cover they believed they had.

Cbus CEO Justin Arter said, “The first year of the Dangerous Occupation Exception has shown tangible benefits to Cbus members who continued to have insurance coverage. We acknowledge the positive implications of the amendment from the Senate Crossbench and Government.

“This first year of operation of the Dangerous Occupation Exception underscores the importance of the amendment. Why would there be recognition for the importance of insurance for workers in dangerous occupations then, but not after a year in operation? The flow through effects of the amendment illustrate how we must stay the course with providing industry specific insurance for workers in hazardous jobs.

“If a construction worker is ‘stapled’ to a fund they joined at their first job, they could be paying for insurance that won’t cover them if they’re seriously injured. Many Cbus insurance claims are from workers in their first year on the building site when they are new to the industry and at higher risk.

“For example, having access to automatic insurance is fundamental for members working with heavy machinery and working from heights.

“Workers need protection from their first day on site. The first year of the Dangerous Occupation Exception has meant that protection has been there when workers most need it. Without it, their families would suffer financially.

“The Your Future Your Super Bill should be rejected by the Senate Committee examining it. The recent hearings exposed that the issues with it are too many, and far too serious to be resolved via tinkering. If passed, it could leave 2.7 million people* - 20 percent of our working population - who work in in hazardous occupations worse off.”

Cbus’ broader concerns with the Your Future Your Super Bill are outlined in Cbus’ full submission, which is available upon request.

Reference:

*Figures are based on analysis of Safe Work Australia’s Work-related Traumatic Injury Fatalities data from 2016 and 2017 (the most recent available for each occupation), as set out in Tables 1 & 2, Actuaries Institute Information Note - Dangerous Occupation, November 2019, https://www.actuaries.asn.au/Library/Standards/MultiPractice/2019/INFinaltoAI261119.pdf

About Cbus:

Cbus is the leading Industry Super Fund for the building, construction and allied industries. As one of Australia’s largest super funds, we provide superannuation and income stream accounts to more than 776,000 members and we manage over $60 billion of our members’ money (as at 28 February 2021). Our members include workers and retirees, their families and employers.

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