Providing more flexible arrangements to help indigenous people access their super was not an “extra impost” on super funds Lyn Melcer, head of technical advice at QSuper, told the Hayne royal commission.

Research shows a retirement wealth gap between indigenous and non-indigenous people. Melcer visited two remote communities thinking QSuper treated all members equally, but discovered that “equal isn’t the same for everybody”, she told the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on Monday.

Beginning the second week of round five, which is shining a spotlight on the $2.6 trillion super sector, senior counsel assisting Rowena Orr addressed a range of issues in her opening comments, presenting evidence that some members of remote indigenous communities have given up on accessing super money that belongs to them.

She referred to witness statements from Lynda Edwards of Financial Counselling Australia and Nathan Boyle of ASIC, who are both involved with assisting Aboriginal and Torres Strait Islander people with issues around superannuation.

Boyle said 80 per cent of his time assisting indigenous community members was around simply gaining access to their superannuation, while Edwards likened negotiating the system to “swimming upstream” leading some to “give up” and lose their benefits.

Some financial counsellors who had visited indigenous communities had found fund members who were totally and permanently disabled and could make a claim, but the time to make it had expired because they were not aware they had an insurance policy, Orr said.

Geographical isolation, language barriers, poor literacy and kinship identification issues were all contributing factors, she said, with some indigenous people likening superannuation to “stolen wages”.

She added that people in these communities often had multiple names and different dates of birth on different identity documents, leading to enormous difficulties identifying themselves to superannuation organisations.

In 2016, AUSTRAC – the government agency responsible for monitoring financial transactions to prevent things like money laundering and terrorism financing – released new guidance for a more flexible approach to identifying Aboriginal and Torres Strait Islander people as part of legislated “Know Your Customer” requirements, Orr said.

But while most funds had taken this up at the head-office level, there was evidence it had yet to filter down to customer-facing staff, she said.

QSuper is Australia’s third-largest superannuation fund and has $104 billion of funds under management. Melcer has worked there since 1981.

She told the commission of two visits she had paid to remote indigenous communities to help resolve superannuation issues – one to the Lockhart River community in far north Queensland, and one to the APY Lands in the remote north-west of South Australia.

She encountered many community members without passports or driver’s licences – the two most common and basic forms of identification used in the industry. Most people did not have computers and the APY Lands had gained mobile phone coverage only weeks before her visit.

She helped a woman who was raising her grandson because her daughter had passed away. The woman viewed him as her son, but she couldn’t name him in a binding death benefit nomination, as he wasn’t an immediate family member. It should be “no impost” for superannuation funds to extend their definition of a “dependant” to a child adopted under cultural law, she said, as long as the member identifies the beneficiary.

There were frequent misunderstandings due to language barriers, leading to a need for superannuation funds to reduce the use of jargon on their forms, Melcer said.

Obtaining death certificates was at times challenging because in much of Australia the funeral director liaises with the Department of Births, Deaths and Marriages but funeral directors are rarely used in these communities.

Over the course of several days during these visits, work that would otherwise take years was quickly resolved, leading to millions of dollars of superannuation being repaid to its owners, Melcer said.

In response, QSuper had simplified language in its forms and letters, trained relevant people on cultural issues associated with dealing with indigenous customers, ensured widespread awareness of the AUSTRAC updates and done some extra work dealing with government agencies in obtaining things like death certificates.

“It’s a little bit extra, but it’s not an impost at all,” Melcer said.

She told the royal commission she did not agree superannuation fund staff should immediately ask whether a customer identifies as Aboriginal or Torres Strait Islander when on the phone or face to face.

Similar issues apply to groups such as victims of domestic violence or homeless people, she said, and it was the job of superannuation funds to work through their members’ problems, regardless.

Melcer also did not agree with the argument that the superannuation preservation age should be lowered for indigenous people to reflect lower life expectancies. She did not want to “give up on that battle” of shrinking the life expectancy gap, and said the issue could be addressed in other ways, such as more flexible total-and-permanent disability criteria.

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