Federal Government to fund Youpla funeral claims
The Federal Government will cover around $4 million in funeral claim expenses faced by First Nations communities due to the collapse of Youpla and will consider further action regarding the group’s failings.
Payments will be made to eligible beneficiaries of policy holders who had an active policy on or after April 1, 2020, which is when Youpla was no longer able to issue the products after it failed to obtain an Australian Financial Services Licence under reforms flowing from the Hayne royal commission.
The Government estimates up to 500 beneficiaries will be eligible to access funds through the announced funeral benefit program. Claims received up to November 30 next year will be covered up to the limit in the member’s policy, typically worth around $8000.
“It is vital that traditional mourning practises be allowed to continue despite the collapse of the Youpla Group funeral contribution funds earlier this year,” Financial Services Minister Stephen Jones and Indigenous Australians Minister Linda Burney said in a joint statement.
“These are interim arrangements the Government intends to establish while it investigates what further steps are required to bring resolution in relation to the Youpla Group collapse.”
The Save Sorry Business Coalition says the collapse has affected a minimum of 20,000 people across Australia, based on data released by the liquidators.
Youpla, formerly known as the Aboriginal Community Benefit Fund (ACBF), was under scrutiny for years over high-pressure sales tactics and misleading and deceptive practices used to sell low quality funeral plans to Indigenous communities.
Mob Strong Debt Help Aboriginal Financial Counsellor Bettina Cooper says the Federal Government announcement on financial assistance is important and the interim measures will assist some of the people caught up in the Youpla collapse.
“We recognise and appreciate the willingness of the Federal Government to listen to and consult with First Nations people on this issue,” she said.
“We look forward to further conversations with Government around a fair resolution for the remaining policyholders who were exploited by Youpla and let down by repeated regulatory failures.”
Mr Jones told reporters there is an Australian Securities and Investments Commission investigation on foot against former directors and matters are also before the Federal Court in relation to the company.
The Australian Financial Complaints Authority (AFCA) has issued 178 decisions against ACBF companies, all of them in favour of the complainants due to misleading and deceptive conduct by the funeral group. The placing of the funds into liquidation has meant AFCA has halted its work on complaints.
