Superannuation ‘mistake’ slugs Aussies thousands of dollars

A major superannuation fund that incorrectly charged members for insurance premiums they didn’t want has divided an online community with its response.

About 2500 Rest Superannuation members have unknowingly been paying insurance premiums for months due to a systems error.

According to a letter sent to Rest customers, members have been wrongly paying these premiums since June last year.

While Rest says it will refund the money, members will still be slugged with insurance premium fees unless they opt out after Rest “switched on” their cover by accident more than seven months ago.

Rest Superannuation members have accidentally been charged for insurance premiums they did not want since June 2024: Picture Supplied

This means Rest is putting the onus back on members, with those impacted given just 35 days to contact the superannuation fund and ask to stop being charged the premiums.

If they fail to get in contact within 35 days customers will continue to be charged insurance fees.

“We made a mistake with your insurance, but it’s fixed now,” Rest said in the letter sent to members last month, a copy of which was posted on Reddit.

“Under the Rest Super insurance policy, whenever a member loses their insurance cover, we offer members 28 days from the date of cancellation to contribute to have the insurance cover reinstated.

“Due to a system error, we received a contribution to your account outside the 28-day period, restarting your insurance in error on the 28/06/2024. This has resulted in you paying for insurance that shouldn’t have been added to your account,” the letter, dated January 23 stated.

A Rest spokesperson said a small number of uninsured Rest members incorrectly had insurance coverage added to their accounts last year as a result of a system error.

“Once identified, the error was addressed quickly and the impact was limited to less than 2500 members,” they said.

Rest says it has apologised for the error and returned the money. Picture: NewsWire / Nicholas Eagar

“Rest wrote to the impacted members to inform them of this mistake and advised them how to cancel the insurance and have any premiums refunded.”

The superannuation fund said Rest’s approach was to honour any insurance coverage provided in error for several reasons, including in case any claims arise.

The Reddit community was divided about the superannuation fund’s response.

“No actual apology, disgraceful really 2024 and it takes them 5 months to discover this,” a Reddit poster said.

“Switch Superannuation, Rest is good from your first job in retail but after that as you earn more your money is better going to a better super fund,” another wrote.

Despite the error, Rest still had some support.

“In my view It’s better to offer people the chance to keep their insurance cover, one they weren’t technically eligible for, then cancel it,” one poster said.

“The last sentence is also about being able to claim. If you go no I don’t want this insurance and want my money back, then you can’t make a claim after said date. You can’t have your cake and eat it too.”

Originally published as Superannuation ‘mistake’ slugs Aussies thousands of dollars