The Federal Government has set aside $7.2 million over two years from 2022/23 to establish the Youpla Group Benefits Program, according to Budget papers released last week by Treasurer Jim Chalmers.

About $5.6 million will be utilised in this financial year for the federally funded program to provide financial redress for beneficiaries of Youpla policyholders, with the remaining $1.6 million allocated for 2023/24.

The program started accepting applications at the start of this month to meet unpaid funeral claims of deceased fund members who had an active Youpla funeral expenses policy on or after April 1 2020.

The Federal Government established the scheme in consultation with consumer advocates and First Nations representatives, who have been pressing for financial assistance to support those affected by the Youpla collapse.

Youpla, also called the Aboriginal Community Benefit Fund, collapsed earlier this year. The business was exposed during the 2018 Hayne royal commission over its use of high pressure and misleading sale tactics to sell near-worthless funeral insurance products to the Indigenous community.

Meanwhile the Australian Securities and Investments Commission (ASIC) and NSW Fair Trading have jointly applied to the Supreme Court for orders appointing special purpose liquidators to investigate whether money can be recovered for creditors of the Youpla Group companies.

ASIC and NSW Fair Trading say the liquidator of the Youpla Group entities, David Stimpson of SV Partners, has disclosed an association with a former legal adviser to the Youpla Group entities.

And the legal adviser also holds an indirect ownership stake in SV Partners, ASIC and NSW Fair Trading say.

“ASIC and NSW Fair Trading are concerned that this relationship may give rise to a perceived lack of independence on the part of Mr Stimpson in any investigation of potential recovery actions that might be brought on behalf of the Youpla Group companies,” they said.

“In making this application, ASIC and NSW Fair Trading seek to ensure that any investigations and recovery action on behalf of those companies are pursued without an apprehension of bias.”

ASIC and NSW Fair Trading say the costs of the special purpose liquidators will not be paid from Youpla Group company funds.

The two bodies say they do not consider that a perceived lack of independence extends to Mr Stimpson’s other roles as liquidator of the Youpla Group entities.

“Therefore, the application does not seek the removal of Mr Stimpson as liquidator of the Youpla Group entities, and ASIC and NSW Fair Trading expect that SV Partners will continue to deal with the winding up of the Youpla Group entities and the distribution of surplus assets to creditors including Youpla Group customers.”