The Australian Childcare Alliance (ACA) is a not-for-profit, member-funded organisation advocating for the future of Australia's children.
We work on behalf of long day care owners and operators to ensure families and their children have an opportunity to access affordable, high quality early learning services throughout Australia.


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This blog article is the second part of a series from ACA's superannuation (super) partner Child Care Super, which explains the different types of insurance in super and the changes that are about to be made – which may affect you. This information is relevant to early learning service owner/operators as well as their team members.

Total and Permanent Disablement cover
When you first joined your super fund, you probably received default Total and Permanent Disablement (TPD) insurance cover. This type of insurance provides you with a lump sum payment if, while you are an insured member, you become totally and permanently disabled and are unable to work (in any occupation based on your education, training and experience).

I’m young and healthy. Do I need insurance cover?
Only you can answer this – however a serious illness or injury can make it impossible for you to continue to work and earn an income and if this happens, you may need to find a way to support yourself (and your family). Total and Permanent Disablement cover can help.

Everyone is different
So, the amount of insurance cover you may need will depend on your personal situation, including your monthly spend on items such as mortgage, rent, food and bills.

Default cover generally only provides a minimum amount of cover. The amount you will receive depends on your age and is provided in ‘Units’ that change in value over time.

It may be the case that the default cover provided is too much for your needs - or not enough. But you can apply to increase your cover (subject to evidence of health) or request to decrease your cover at any time.

Any TPD benefit paid will be made up of your super account balance plus any insurance benefit you may hold with your super fund.

I didn’t even know I had insurance! How am I paying for it?
When you have insurance cover through a super fund, premiums are deducted directly from your super account so, it’s important that you are aware of how much cover you have, how much the cover is costing you and if you need or want it.

You can find out how much insurance cover you have by logging in to your super account, calling your fund’s helpline or checking your most recent super statement.

The rules are changing!
From 1 April 2020, existing members who have less than $6,000 in their super account will have their insurance cover cancelled unless they tell their fund they want to keep it.

New members joining a fund on or after 1 April 2020 who are aged under 25 will need to tell their fund if they want default insurance cover regardless of their account balance. New members aged 25 and older joining a fund on or after 1 April 2020 with an account balance less than $6,000 will also need to ‘opt in’ if they want default insurance cover.

Once a member’s account balance reaches $6,000 and they are aged 25 or over, unless
a super fund is told otherwise, eligible members will receive automatic (default) insurance cover.

This is due to new Government changes known as ‘Putting Members’ Interests First’ which aims to protect peoples’ retirement savings by ensuring super isn’t unnecessarily eroded by fees and premiums on insurance policies that may not be needed.

Child Care Super encourages all members to pay close attention to any correspondence they receive about their superannuation and insurance cover as it could make a big difference to their financial security in the future.

Want to know more?
For more information about insurance in Child Care Super, including full details on all the conditions that apply, read the Child Care Super Insurance Guide available at www.childcaresuper.com.au/insurance.

Child Care Super members also have access to over-the-phone advice about super, including advice on insurance, at no extra cost. If you would like help, call us on 1800 060 215.

Guild Trustee Services Pty Ltd. ABN 84 068 826 728. AFSL 233815. RSE License Number L0000611. Trustee for the Guild Retirement Fund ABN 22 599 554 834 (which includes Child Care Super). Before acting on any information, you should consider whether Child Care Super is right for you by reading the Product Disclosure Statement at childcaresuper.com.au.

You can read blog article 1 on Death & Terminal Illness Cover here