Superannuation in the spotlight as funds continue to clamp down
Associate - Superannuation and insurance
As the superannuation industry goes under the spotlight for dubious claims management, members are noticing tighter policy requirements and an increase in rejected claims.
Having spent the last six months analysing the conduct of Australia’s major banks and lending institutions, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, has announced that it will now be turning its focus to the nation’s superannuation funds.
Of particular interest to Justice Kenneth Hayne is the role of superannuation funds as providers of insurance, with many insurance policies having thresholds for claiming so high that they are of very little value to members.
One of the contributing factors in making such cover so difficult to access is the growing use of the Activities of Daily Living (ADL) definition in the assessment of Total and Permanent Disablement (TPD) claims.
The ADL definition, which is becoming a more prominent feature in TPD insurance policies, represents a major diversion away from the standard process of assessment for TPD claims.
Typically, to be successful in a TPD claim, a claimant needs to show that they cannot return to work for which they are reasonably suited. TPD claims has proved to be a much-needed safety net for Australian workers who sustain conditions that put them off work. TPD insurance provides a lump sum for members who cannot return to work due to an injury or illness.
However, the benchmark for accessing cover under the ADL definition is more stringent and deliberately vague. To be successful with a TPD claim which includes an ADL clause, members need to establish that they cannot perform basic tasks such as dressing, mobilising, toileting, showering and eating. This has proven to be a far more rigorous test that claimants a rarely able to satisfy.
In applicable policies the ADL clause is triggered if a member works in a “special risk occupation”, for example as a labourer, a factory worker, in sports, or even as a journalist. ADL clauses are typically buried deep in dense policy documents and often do not become apparent until a claim has been made and subsequently rejected.
To the ordinary superannuation fund member, determining whether a ADL clause is present or not can be challenge, as their annual statement often only lists their TPD insurance coverage status.
At Zaparas Lawyers we understand that the process of making a compensation claim through a superannuation fund can be very time consuming and complicated.
If you or someone you know has suffered from an injury or illness and may need assistance with a superannuation related claim, call us today on 1800 ZAPARAS to have a risk and obligation free consultation with one of our superannuation experts.