Help offered to Indigenous people ripped off by Youpla
Rudi Maxwell |
Aboriginal and Torres Strait Islander people ripped off by a disgraced insurer will be able to access funds after the federal government stepped in with a $97 million package.
The Aboriginal Community Benefit Fund, owned by collapsed insurance company Youpla, sold junk funeral policies to Indigenous people across the country for decades, including targeting communities where English wasn’t the first language and with low literacy levels.
Youpla was exposed during the 2018 banking royal commission but not before thousands of people paid for inappropriate plans, including through Centrepay, where money is automatically deducted from social security payments.
Indigenous Affairs Minister Linda Burney said the Youpla Support Program will begin on July 1, when an interim plan ends, and is expected to help more than 13,000 people recover from financial loss and provide certainty to families.
“Losing loved ones can be one of the most traumatic events, made harder still for those First Nations people affected by the collapse of the Youpla funeral fund,” she said.
“This measure will hopefully bring peace of mind to thousands of families impacted.”
The Federal Court handed Youpla a $1.2 million fine in September for misrepresenting junk funeral policies, finding it told plan holders they would receive a lump sum payment when in fact they would only be reimbursed for expenses they could prove had been incurred.
The company collapsed in March 2022, with more than 10,000 families losing out.
The new program will be for people who held an active policy on or after August 1, 2015, when the Commonwealth removed Youpla policies from Centrepay, acknowledging the risks posed to vulnerable customers.
Eligible recipients will be offered the choice of a resolution payment – assessed at 60 per cent of the premiums paid up to the value of the insurance – of a prudentially-regulated funeral bond or an opt-out for cash.
The Save Sorry Business Coalition, a First Nations-led campaign to support people exploited by Youpla, welcomed the announcement but said some would be disappointed it excludes policy-holders who stopped paying in before the 2015 cut-off date.
Wangkumara/Barkandji woman Lynda Edwards, financial capability co-ordinator at Financial Counselling Australia and 2023 NSW Woman of the Year, said it was more than 30 years since Youpla began targeting First Nations people.
“And over 20 years since the Federal government approved Youpla to receive payments via Centrepay, taking money straight from people’s social security payments before they could even put food on the table,” she said.
Dunghutti man Mark Holden, solicitor at Indigenous financial organisation Mob Strong Debt Help, said the exploitation and deception perpetrated by Youpla had caused severe harm for individuals, families and communities.
“It has created financial and cultural crises, worsened health outcomes and deepened poverty,” he said.
“This announcement is … a strong beginning that gives many Youpla payers the ability to choose how they will take care of Sorry Business.”
Eligible recipients can access financial counselling to help them better understand the options available under the Youpla Support Program.
The $97 million intiative will run for two years, receiving applications until June 30, 2026.
It follows the interim Youpla Group Funeral Benefits Program, announced by the government in July 2022, which allows families of former members to claim a grant to cover immediate funeral expenses and will continue to accept applications until June 30, 2024.AAP