QPC Briefing No 16 2025
AFAP Mutual Benefit Fund (MBF): What You Need to Know
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As conversations continue around pilot representation and benefits, it’s essential that all pilots have access to accurate and up-to-date information. One area where misinformation persists is the Mutual Benefit Fund (MBF).
Introduction
The Mutual Benefit Fund (MBF) is a separate legal entity to the AFAP, though it was established by the AFAP and remains closely linked in purpose. It is a non-profit, member-governed fund created to provide financial protection for AFAP members who lose their Class 1 Medical Certificate and are unable to continue working as pilots.
The MBF is not an insurance product, but a mutual benefit fund supported by members and run in their interests. It has existed for over 60 years and now manages an asset base of over $170 million across property, securities and cash equivalents. Its financial reports are publicly available here.
It offers benefits that no other fund provides, such as a refund of your contributions of up to $70,000 when you retire with 20 years of membership and have not claimed on the fund.
Common Misunderstanding
A common misunderstanding is that the MBF does not pay out if Qantas' Loss of Licence insurance is paid. This is incorrect. The MBF does in fact payout in addition to Qantas LOL. There is no offset or reduction in MBF entitlements simply because a member may also receive a benefit from the Company’s insurer. The two schemes are entirely independent, and MBF has no connection to Qantas LOL in terms of benefit eligibility or limits.
How the MBF Works
Monthly Payments
- If you lose your Class 1 medical due to illness or injury not arising from workers’ compensation, you may be eligible to receive monthly benefit payments.
- Benefits are paid up to $15,000 per month (capped at 100% of pre-disability income).
- Benefits are paid for a maximum of 24 months per condition.
Capital Benefit
- This is a separate lump-sum payment for permanent medical unfitness.
- It comes into effect after a claim is medically finalised, i.e., the pilot is deemed permanently unfit to fly (Class 1 Medical lost permanently).
- The capital payment is in addition to monthly benefits, but the total combined payout (monthly + capital) cannot exceed the member’s nominated cover (e.g., $1.2 million in 2026).
Key Features of MBF
- Monthly benefits are also payable following workers compensation claims, once the workers compensation process is concluded. MBF will top up any shortfall to ensure the member receives their maximum benefit entitlement.
- Members can claim for multiple separate medical conditions, each with a new eligibility window (e.g. a 12-month claim for one injury does not reduce future entitlements).
- Capital payments are not offset by other insurances or payments.
- There is no time limit to claiming after joining - however, benefits are reduced by 50% in the first 12 months of membership and by 25% in the second year.
- Members can join up to age 55, with a contribution modifier applied for new joiners over age 40.
- There is no tapering of the monthly benefit, though there is tapering of the maximum nominated capital amount for members joining at older ages.
- You must be a financial MBF contributor for at least 12 months before claiming.
- The Fund pays in addition to Qantas’ corporate Loss of Licence Insurance.
2026 MBF Rule Changes – Summary of Key Updates
Capital Benefit Increased
A substantial increase in the maximum capital benefit to $1.2 million.
Eligibility Expansion for New Joiners
New AFAP members joining the MBF after age 50 will now be eligible for a reduced (pro-rated) benefit period, rather than being excluded entirely. This offers improved access for later-career pilots.
Income Averaging Period Adjusted
The income averaging period for benefit calculation is now clarified as the last 12 months (excluding periods of leave), providing a more consistent and fair baseline.
More Defined Exclusion Clauses
The 2026 rules contain clearer language around exclusions, especially in relation to:
- Intentional self-harm
- Criminal conduct
- Pre-existing conditions for late joiners
- Work-related injuries (still excluded as per workers compensation)
Administration & Appeals Improvements
New provisions streamline the appeals process and give clearer timelines for decisions, including publication of anonymised case outcomes to improve transparency.
A Valuable Benefit of AFAP Membership
Membership in the AFAP includes the option to contribute to the MBF. It is one of the most important financial protections you can have as a professional pilot, particularly for those with dependents, mortgages, or long careers still ahead.
If you are a Qantas pilot considering joining the AFAP, it’s important to understand that MBF is not available through other unions, that the fund has no equivalent in the market for what it offers and pays in addition to the Qantas Loss of Licence insurance for non-worker’s compensation claims.
Key Benefit points:
- The Standard Capital Benefit for 2025-2026 is capped at $600,000 (increases to $1.2 million in 2026).
- Members under 50 can contribute an optional Premium Capital Benefit of $200,000, bringing their capital cover to $800,000.
- Under the proposed 2026 rule changes, the maximum permanent Loss of Licence cover increases to $1.2 million, up from $800K.
Summary:
- Pre 2026 max capital cover = $800,000 (600K standard + 200K optional top up).
- Post 2026 max capital cover upgrades to $1.2 million.
- Monthly income benefits remain capped at $15,000 per month, derived from salary average.
The MBF offers flexible options for cover tailored to your individual circumstances. Please contact the MBF on the details below for further advice on the coverage available based on your individual circumstances.
Pilots can join now and access coverage for the remainder of the 2025-2026 coverage year. Pilots who have previously been members of the MBF have options to rejoin with their original joining age.
More information can be found on the MBF website: https://www.aapmbf.com.au or for further information regarding your options for MBF cover, please contact the MBF directly on +61 (03) 9928 4500 or email membership@aapmbf.com.au.
Regards,
AFAP Qantas Pilot Council
Michael Egan – Chair
Mark Gilmour – Vice-Chair
Rob Close – Secretary
Michael Armessen – Committee Member
David LaPorte – Committee Member
Josh Chalmers – Committee Member