Discrimination is everywhere, and many people are currently fighting it. And so they should be.
“Discrimination happens when a person, or a group of people, is treated less favourably than another person or group because of their background or certain personal characteristics.”
Some of the unfortunately common ones that are facing major battles right now are racial discrimination, LGBTIQ discrimination, and religious discrimination (amongst way too many others). All types of discrimination are vile, disgusting, and difficult to fix for many challenging reasons.
However, another type of discrimination is flying under the mainstream radar whilst actually being legislated into existence right now! A group of people are fighting it – but struggling to gain traction against the challenges of those promoting it. The promoters are saying it is “for the best”, “necessary”, “more efficient”, and even “protecting” the victims.
This discrimination is against the underdogs, the ones who most need help, the ones who are not even aware of this discrimination and won’t know until they are in the direst of circumstances and have no options. Is this then one of the worst kinds?
“Protecting your Super” (PYS by the Federal Government), “Automatic Rollovers” (promoted by ISA), Media hype against fees and advice, are examples of this discrimination being enacted right now.
So, who are the victims?
- Low income workers with low super balances
- New entrants to Australia with low super balances
- English as a Second Language members of super funds
- Young people who have multiple casual jobs
- Women (and men) taking a break from the workforce to raise children or care for aging parents
- People who move a lot and miss updating their addresses everywhere
- People with low literacy, minimal education, or low financial literacy
- People who don’t have time to read 50 page Product Disclosure Statements
- People who are sick or injured already
What is the issue?
Insurance in Superannuation is complicated, misunderstood, and considered by our regulator (ASIC) to be paid via a fee that reduces balances, not via a premium that provides protection. It is the unpopular, smelly, disadvantaged kid in the schoolyard. We know they are there, but we pretty much ignore them, and if someone makes them go away quietly, and we don’t have to deal with them anymore, it seems like a good thing.
But like the good teachers and children with empathy find out when they give these kids a chance, and work to understand them, they can turn out to be one of the best things that ever happened to someone’s life.
Every financial adviser knows that the unpopular, smelly, disadvantaged insurance in superannuation which is lesser quality and hard to claim on can be gold to someone who doesn’t have any other options. There are thousands of stories of the person with no other insurance, or who had the pre-existing medical condition and couldn’t get the “golden, privileged
child” of products, that they helped claim on their automatic cover and saved their financial situation, their family from poverty, and their sanity. Not to mention saving significant welfare costs to everyone in the tax-paying community.
Many of these stories include claims on multiple products, in multiple super funds and for people who didn’t even know they had cover for various reasons, or who certainly didn’t understand it.
However now PYS, Automatic rollovers, and TV commercials telling people to consolidate their super funds into one are taking these options away from these disadvantaged people.
Should everyone just keep multiple super funds and get a new fund every-time they get a new job? Of course not.
But everyone should be told they need to check what they have before it is just taken away from them, and not on page 8 of a long, confusing letter in 6 font italics down the bottom.
And everyone should be told who the experts are who can help them with this if they don’t know how or don’t have time to do it themselves. Financial advisers are experts at this. Who is telling people that?
And who is going to take care of the people being discriminated against with these new strategies when the worst happens and they become seriously ill, injured or die prematurely?
The Centrelink Disability Support pension is difficult to apply for, has strict criteria surrounding eligibility, and pays a grand sum of $843.60 per fortnight (single).
If we told people with low bank balances their car insurance or home insurance was being cancelled automatically there would be a major out-cry. Why is this new type of discrimination actually being legislated and nobody seems to care?
Adv Dip FS (FP)
Insider Out – Understand and Trust your Advice
0400 533 865
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