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TPD and salary continuance claims: When should I make a complaint to the AFCA?
The AFCA is the Australian Financial Complaints Authority.
The Authority handles and resolves financial complaints in relation to financial errors, breaches, and inappropriate conduct. The AFCA is an impartial authority that deal with all types of financial complaints from credit and finance to banking payments, insurance, and superannuation.
The AFCA is able to make a determination to award compensation to an individual who has suffered because of a financial institutions error, breach or inappropriate conduct. However, the AFCA cannot impose fines or punishments on financial institutions.
On 1 November 2018, the FOS was replaced by the AFCA. Now all financial complaints must be made through the AFCA.
What complaints can the AFCA deal with?
The AFCA can handle complaints brought by an eligible person in relation to a member financial institution. Noting that the financial institution must be a member of the AFCA at the time of the complaint. An eligible member is someone such as an account holder, someone who has the authority to act on the account, or with the financial institution such as a guardian or beneficiary. Most Superannuation Funds are members of the AFCA, however, if you are not sure if your super fund is a member there is a search tool available on the AFCA website.
What type of complaints can be made?
A complaint can be made to the AFCA in relation to TPD, Salary Continuance, or Income Protections if:
- The Superannuation fund is not communicating with you
- The Superannuation fund / trustee has made an unfair / unsubstantiated determination
- The superannuation fund has not made a determination within the stipulated time frame
- The has been a delay in paying a benefit
- Incorrect or unauthorised transactions or changes to your superannuation policy that affect your benefits
When to make a complaint?
Before making a complaint to the AFCA, you should make a complaint directly to the Superfund or the Trustee.
Your lawyer will make the complaint to the Superfund / Trustee on your behalf. Usually, once a complaint is made to a Superfund / Trustee they will escalate your complaint to the Internal Dispute Resolution team (IDR) who will investigate your complaint and notify you of their outcome. If the Superfund / Trustee takes too long to get back to you or they fail to notify you of any progress or determination, or you are unhappy with the determination of the IDR your lawyer will then make a complaint to the AFCA.
Who makes the complaint?
Your lawyers will make the complaint to the AFCA. Your lawyer will have drafted comprehensive submissions on the error, breach, or inappropriate conduct of the superannuation fund or trustee.
Are there time restrictions for making complaints to the AFCA?
Yes, there are strict time frames for making superannuation complaints to the AFCA.
- Time restrictions if you have permanently ceased employment due to injury or illness:
- If you have permanently ceased employment due to an injury or illness you must have made a claim under your Superfund / trustee within two years of becoming totally and permanently disabled (TPD), and
- You then must refer the complaint to the AFCA within two years of the Superfund / trustee’s determination about the disability claim
- Time restrictions if you did not permanently cease employment due to injury or illnes. You must refer the complaint to the AFCA within six years of the superfund / trustee’s determination about the disability claim.
What is the AFCA complaints process?
Once the complaint is made the AFCA will:
- Notify the superfund of the complaint
- Set down a timetable for resolution of the complaint
- If required investigate the complaint further
- Where necessary join another financial firm
- Allow the financial firm and the complainant to lodge submissions
Where possible the AFCA will facilitate:
- Negotiations, or
- Conciliation conference
If the above avenues are not possible or have not been successful, the AFCA may make a preliminary assessment, or they may proceed to determining the complaint.
Are AFCA decisions binding?
Where a complaint is resolved by way of agreement between the parties, or a determination is made by the decision maker, the determination of the AFCA is open for acceptance by the complainant for a period of 30 days. If the complainant accepts the determination it then becomes final and binding on the Superfund / trustee. NOTE: the superfund / trustee may appeal the decision under the Corporations Act but only in limited circumstances.
If the complainant does not accept the determination of the AFCA the determination is NOT binding on the complainant. This means if the complainant is unhappy with the determination of the AFCA, the complaint can proceed to Court. However, any information obtained during the AFCA investigation is confidential and cannot be used in Court proceedings unless the Court determines otherwise.
What remedies are available and what can the AFCA award?
- Vary, set aside, remit, substitute or confirm the super fund / trustee’s decision (all or in part)
- Set aside the terms or vary the terms of the governing rules
- Order the repayment or payment of money
There is no monetary limit on an amount that can be awarded by the AFCA when it comes to superannuation complaints and interest can also be awarded by the AFCA. You can read more about the AFCA here.
