The Save Sorry Business Coalition has welcomed a $97 million financial resolution scheme for policyholders of failed funeral insurer Youpla Group.

Under the two-year Youpla Support Program, eligible recipients will be offered a resolution payment assessed at 60% of premiums paid, up to the value of the insurance. They will get either a low-risk prudentially regulated funeral bond or a cash payment.

“We welcome this announcement and commend ministers Linda Burney and Stephen Jones for following through with their commitment to put a scheme in place to address the harm to First Nations people caused by Youpla, Centrepay and regulatory failures over many years,” Boandik woman and coalition co-ordinator Bettina Cooper said.

“This resolution will relieve immediate financial hardship for many, provide certainty around Sorry Business for others, and enable thousands of families to move on with their lives.”

The coalition says it is supported by 130 organisations “seeking a fair and enduring resolution for First Nations people harmed by the misleading and deceptive conduct of Youpla and the massive and prolonged failure of government and regulators over two decades”.

Youpla collapsed in 2022, leaving its Indigenous policyholders and their beneficiaries in limbo.

The business was exposed at the 2018 Hayne royal commission over its use of high-pressure tactics to sell near-worthless products to Indigenous communities.

After the collapse, the Federal Government created an interim scheme for the beneficiaries of Youpla policyholders to claim a grant covering immediate funeral expenses. The Youpla Group Funeral Benefits Program will cease taking applications on June 30.

The new program will start accepting applications on July 1 and is expected to help more than 13,000 people recover from financial loss. It is for policyholders who held active policies on or after August 1 2015, when the Commonwealth removed Youpla from its Centrepay system. Many of Youpla’s Indigenous customers paid their premiums through auto deductions from their Centrelink benefits.

Last year, the Federal Court ruled Youpla and its related businesses misrepresented the sale and promotion of funeral expense insurance to Indigenous people. It imposed a $1.2 million penalty, in proceedings launched by the Australian Securities and Investments Commission.

But the court dismissed other allegations and the corporate regulator is appealing against one decision in relation to its claim Youpla falsely misrepresented that it was owned or managed by an Aboriginal person or people.