Opt-in rates lowest for blue collar workers

The highest-risk demographic of blue collar workers has the lowest opt-in rates to insurance in superannuation, according to research by Association of Super Funds Australia (ASFA) and Deloitte.

Speaking at an ASFA conference in Sydney, the association discussed a report produced by the two organisations into insurance in super.

Almost 10 million people were covered by insurance in super and there were more than $6 billion in payouts in 2021.

However, the report found opt-in rates where insurance in super currently operated were 18%. However, this fell further to 8% of blue collar workers.

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This was despite the fact many worked in high-risk professions and would likely be unable to work if they suffered an injury.

It said: “Blue collar workers particularly benefit from default arrangements: by the nature of their manual and often hazardous work environments, they face higher risks, but evidence from where opt-in currently operates suggests their participation is lower – only 8% of blue collar workers would opt-in to insurance through superannuation. Awareness levels about insurance in superannuation are low.”

John O’Mahony, partner at Deloitte Access Economics, said: “For those [blue collar] individuals who are not in superannuation or insurance, if they were to suffer a tragic circumstance, that would be catastrophic and that’s something that policymakers have to keep front of mind when they are thinking about the cost and benefits of the system”.

Another factor contributing to the low uptake was that many blue collar workers were self-employed and may not feel they have enough extra cash to contribute to super or insurance.