Mary Aldred (Monash, Liberal Party) | Link to this | Hansard source

I move:

That this House notes that:

(1) superannuation belongs to Australians for their retirement, and as such death benefit and other payouts should be processed without delay by superannuation companies;

(2) in March last year, the Australian Securities and Investments Commission (ASIC) announced it was taking legal action against one of Australia's largest industry funds over delayed processing of nearly 7,000 death benefit claims, according to proceedings filed in the Federal Court;

(3) ASIC's media release said the superannuation giant was taking between 'four months and four years' to payout death benefits;

(4) back in 2023, complaints to the ombudsman about delays in releasing super to a surviving spouse or other beneficiaries more than tripled; and

(5) in January 2025, the Government announced plans to introduce mandatory service standards for superannuation funds, in response to a growing public backlash against the industry, particularly over its poor handling of death benefits, yet more than a year later, there has been no further progress.

This motion seeks to right a grave injustice to thousands of Australians. Superannuation is money that belongs to Australians for their retirement. The same goes for death benefits which are held by super funds and distributed to a person's nominee or dependants on their passing, Where the person has a terminal illness, they can be eligible for the early release of those funds as well.

I've assisted constituents who have waited over a year to access their own money. In one case, a constituent approached me after her late husband passed from a terminal illness. He had wanted to access the early payout of his super, which he was entitled to do. He wanted to say to his children, while he was still alive, 'Kids, I know this is not going to make everything better, but it is something.' AustralianSuper messed this man around in his dying weeks, not replying to his emails, transferring him from call centre operator to call centre operator and hanging up on him, depriving this father and his family of that final conversation. To make matters worse, his widow was then stonewalled for eight months to access her own money. The amount of money we're talking about is such that, if she'd stuck that in the bank over that period of time, it would have yielded about $8½ thousand.

Irene Thomas is another constituent of mine. Her battle was with Cbus. After I intervened on Irene's behalf, the money was paid to her, but that was over a year later. Irene recently told Lucas Baird from the Australian Financial Review about her wait to access her own money and said:

What would have happened if I were destitute?

There are over 4,000 Australians waiting up to four years to access their own money. One of the first things I did when assisting these constituents on the issue was to check what the mandated minimum payout timeframe was with the regulator, ASIC. Surely, there must be a timeframe in which people can access their own money. It turns out that, according to ASIC, there is not. ASIC just says it should be 'as soon as practicable'. In other words, there is no mandated timeframe. Well, there should be.

In January 2025, the federal government announced plans to introduce mandatory service standards for superannuation funds, especially over their poor handling of death benefits. Eighteen months of 'soon' is too long for many Australians who are still waiting. These are not isolated cases. There are thousands of Australians who have been waiting years to access their own money, because big super has made an art form out of frustrating every effort at every turn—transferring calls, not answering emails and challenging every document. In many cases, we are talking about older women who, while navigating the grief of losing their spouse, have to jump through every obstacle imaginable just to access their own money.

There was a light-handed industry led code of conduct implemented a couple of years ago, around the time when complaints to the ombudsman tripled. Clearly, it's not working. Last year, ASIC also announced legal action against AustralianSuper, who has kept 7,000 of its customers waiting years to access their own money. The ASIC claims-handling review has released a landmark report revealing that 78 per cent of reviewed death benefit claim files were delayed by processing issues within the trustee's control. That's important because, while we all understand some cases have complexities that need to be worked through, this shows that nearly 80 per cent of delayed cases are in fact straightforward.

The second point I wish to raise is this. It has also been revealed that a fund may be required to pay death benefits to a person who used domestic violence against the deceased. This is desperately unfair. It is cruel. It is wrong. As part of its December 2024 report into financial abuse, an insidious form of domestic violence, the Parliamentary Joint Committee on Corporations and Financial Services recommended that superannuation laws be amended to provide a mechanism so that a beneficiary who has perpetrated domestic or family abuse, including financial abuse and domestic violence, against someone who has died as a result of domestic violence related suicide—suicide of the superannuation account holder—be declared an invalid beneficiary. I've read real-life examples of this. They are tragic.

It's time big super was held to account, and it's well past time this government was compelled to act.

Andrew Wilkie (Clark, Independent) | Link to this | Hansard source

Is the motion seconded?

Tom Venning (Grey, Liberal Party) | Link to this | Hansard source

I second the motion and I reserve my right to speak later.

David Moncrieff (Hughes, Australian Labor Party) | Link to this | Hansard source

Superannuation gives older Australians dignity and security in retirement. It's the recognition that Australians who have worked hard should be able to enter later life with a decent standard of living. This is, of course, the goal of all retirement income systems, but our Australian way has unique advantages. Savings mandates and concessional tax treatment are prudent mechanisms to encourage self-responsibility. It is Labor that built modern superannuation in this country. In 1991, Paul Keating introduced the legislation underpinning Australia's world-class superannuation system. Our superannuation system is one of the great success stories of the modern Australian economy. It has meant that successive Australian governments have spent less on retirement payments than other countries as a share of GDP, while supporting higher quality of life for older Australians.

Not only does superannuation provide a dignified retirement for individuals; it also benefits our economy. Over the decades since its introduction, contributions have deepened Australia's pool of investment capital over time, reducing the risk premium faced by Australian companies. It has improved our balance of payments when funds invest overseas, and spending out of income derived from superannuation is a large source of demand, powering around five per cent of GDP. Apart from their home, super is often the largest investment that an individual will make over their lifetime.

It was a Labor government that created superannuation, and this Labor government understands its critical importance for individuals and for the broader economy. That's why we've acted to strengthen superannuation, supporting a secure retirement for millions of Australians. The Albanese government is introducing mandatory enforceable service standards for all large APRA regulated superannuation funds. The focus of these standards will be on the areas families rely on during some of the most difficult times in their lives, including timely and compassionate handling of death benefit claims. The government is preparing to release draft legislation for public consultation this year.

We're making sure that super is paid at the same time as wages, closing loopholes that denied workers their entitlements and allowing workers to benefit from more frequent compounding. We have increased the superannuation guarantee to 12 per cent, a milestone for workers decades in the making, boosting retirement savings for millions of Australians. This government is also boosting the low-income superannuation tax offset to raise eligibility from July next year. This will give low-income workers a fairer tax concession on their super contributions and help deliver a more secure retirement for 1.3 million Australians, and we're improving the sustainability of concessional treatment for very large balances.

These reforms build on a strong record of action to strengthen and modernise Australia's superannuation system. This is work that the opposition neglected to do for years.

Andrew Wilkie (Clark, Independent) | Link to this | Hansard source

The member for Hughes will resume his seat. It being 1.30 pm, the Federation Chamber will suspend until the chair is resumed at 4 pm later today.

Sitting suspended from 13:30 to 16:00