The stripping of insurance in super from low balance accounts and young members may jeopardise the mental health of thousands of people, warns national workplace mental health organisation SuperFriend.

SuperFriend GM of Insurance Solutions Sandy McLeod says the changes pose “enormous longer-term risks for younger members and lower income earners – two groups particularly susceptible to mental ill health”.

He points to statements by the Federal Government’s own mental health initiatives linking financial stress to mental health outcomes, and questions whether the removal of insurance cover will affect the member’s mental wellbeing.

AIA says mental health is the third largest income protection claim cause for under 25s, and one quarter of all claims is related to mental health conditions.

“Removing insurance cover for this cohort seems illogical when considering the prevalence of mental illness in younger working Australians, and the fundamental human need for financial security,” Mr McLeod says.

Thousands of Australians would have faced a lifetime of extreme financial stress following the death or disability of a loved one were it not for insurance cover, he adds.

He also questions why industries whose workers are at a higher risk of mental illness were not exempted from the legislation like those working in industries at high risk of physical injury.

“The financial services industry experiences one of the highest rates of mental ill-health in the workforce, with 33% of its workers living with a mental health condition.”

He says the Government is “courageous” in wanting to deal with the issues of super balance erosion, but the unintended consequences that are likely to unfold are even more concerning from a mental health perspective.