New super laws mean you need to check your insurance

Shane Hempenstall was working as an interstate truck driver when he was struck on the head and suffered a brain injury that caused him to become totally and permanently disabled (TPD).

Before the accident, his employer Scott Group had signed the 58-year-old up to an MLC superannuation fund which claimed to have a TPD payout of about $130,000.

However, when Hempenstall applied to receive this money after his injury, after having his disability verified by doctors, MLC declined the claim. The policy did not cover interstate truck drivers.

Super fund members should check their insurance to see if it is suitable for their profession.Credit: Fairfax Media

Hempenstall is now suing the Scott Group through lawyers Maurice Blackburn, who argue the company broke its duty of care by failing to enroll him in a super fund with insurance suitable for his profession.

Employment lawyers are bracing for an uptick in these types of claims, following the federal government’s stapling measure introduced in the Your Future Your Super legislation last month.

The measure, which will tie workers to a single super fund from November 1, has been celebrated for its potential to stamp out duplicate accounts and prevent people from whittling their super away on multiple fees.

However, it has also raised concerns about the potential for workers in hazardous industries, such as construction, truck driving and mining, to be left without suitable insurance.

Super funds that were created for specific industries, such as TWUSuper for transport workers and Cbus for construction and mining workers, automatically sign up their members for insurance tailored to their members’ specific professions.

However, Maurice Blackburn principal Hayriye Uluca says that some funds charge members for insurance policies that exclude high-risk occupations without checking members’ lines of work.

Shane Hempenstall discovered he was paying premiums for insurance that proved worthless.

“Quite often, members only discover they have been paying for a product that is effectively useless when they become disabled and make a claim,” she says.

This means if you are originally signed up to a fund that is tied to insurers that use occupation exclusions, chances are you could end up paying for insurance that may be worthless if you start work in a high-risk industry.

Federal Treasury has pledged to conduct a review to examine the unintended consequences of the stapling mechanism for workers in hazardous industries.

SuperConsumers director Xavier O’Halloran says these exclusions should be eradicated and has called on workers to call their super fund to check if they are properly covered by suitable insurance.

“The best thing to do is talk to your fund, ask them specifically. Tell them the type of work you do, your occupation and what it involves, and ask them if their policy covers it,” he says.

A spokesman for MLC Life said: “As we head towards November 1, we continue to work with all our fund partners to consider what product changes, if any, need to be made in order to ensure positive member outcomes.”

Hempenstall’s injury has radically changed his life. He lost his license, bringing an end to a 30-year career driving trucks. As a result, he could no longer afford to live in Adelaide.

He now lives in public housing in Kerang, a small town three hours drive north of Melbourne. “It’s changed everything. The way I live. It’s changed my whole life,” he says.

While Hempenstall says no amount of money could compensate for what he has lost, the payment he thought he was entitled to would have enabled him to stay in Adelaide and find other work.

He has one piece of advice to workers who assume they are fully insured. “Make sure you’re covered. I’m sure there are people who don’t think about it, think they’re covered and they’re probably not.”

And with the government’s stapling measure, this false sense of security could become a whole lot more common.

Scott Group did not respond to requests for comment.