The legal status of New Zealanders in Australia faces a test after Perth-based Kiwis Charles and Judith Cairns were granted leave to take a racial discrimination case against ANZ over insurance they were sold by its subsidiary OnePath.

The couple, who have lived in Australia since 2004, complained that they had been effectively denied life insurance cover because of their status under the transtasman Travel Arrangement - which allows residency for New Zealanders via a Special Visa Category.

NSW Civil and Administrative Tribunal documents show Charles Cairns purchased insurance in 2005 after receiving a marketing letter which stated:

"As an ANZ customer who is a Permanent Australian Resident and aged between 21 and 59, your acceptance is guaranteed."


However, in 2015 the Cairns' financial adviser wrote to OnePath to clarify the matter.

The Cairns received a response from OnePath stating that the Cairns "would not be covered from commencement of the policy as they are not citizens or permanent residents of Australia".

They were advised that the only option available to them was to cancel the policy from inception and all premiums would be refunded.

Despite ANZ refunding $20,000 in premiums and offering to cover the couple with a different product they have opted to pursue the case and the tribunal has granted them leave to do so.

"If I had died my wife could have been given $20,000, and not $200,000 in my death cover," Charles Cairns told The Australian Financial Review.

He said he wanted to highlight the issue for others in similar circumstances.

An ANZ spokesperson said steps had been taken to address the Cairns' concerns but as the matter was still before the tribunal it was inappropriate to comment further.

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