Bodies of Indigenous families’ loved ones left in morgues after collapse of funeral insurer Youpla

Aboriginal families in at least two states have been forced to leave the bodies of their loved ones in morgues because they can't afford a funeral after the financial collapse of their insurer, which has previously been exposed for its "misleading and deceptive" conduct.

The collapse last month of Youpla Group has sparked calls for compensation for the more than 13,000 low-income Aboriginal people who face losing all they have paid into the funeral fund.

Labor has said if it wins government it will set up an inquiry into the collapse, while the Morrison government has dismissed calls for compensation.

But those calls for urgent help are escalating amid revelations that Aboriginal families have had to crowdfund funerals and been forced to leave the bodies of their loved ones in morgues for weeks while they raise the money.

Trish Frail, a Ngemba woman and Greens candidate for Parkes in New South Wales, said it took her cousin's family three weeks to raise the funds to pay for her funeral.

"All the while their sister, niece, aunty and cousin was in the morgue. That added so much unnecessary pain and stress," Frail said."This needs more than an inquiry, this needs an immediate financial rescue package for families dealing with this grief and financial trauma."

The minister for financial services, Jane Hume, said people could apply for a state-assisted funeral, commonly known in the industry as a "destitute" or "pauper" funeral.