Raiding super wealth to pay medical bills - $1.4 billion withdrawn

Have you seen advertisements promoting easy early access of super funds for ‘compassionate’ reasons – to pay for expensive or unnecessary medical treatments? 

As medical and general costs escalate, it appears the advertisements – many verging on rorts - are finding an audience. Australians withdrew more than $1.4 billion from their superannuation accounts for compassionate reasons in the last financial year, with much of that used to fund medical procedures ranging from dental work to cosmetic procedures to weight loss treatments. 

Of the 112,400 applications in 2024-25 for compassionate super access, 93,500 were made on medical grounds, up from 71,900 the year prior. Applications to use superannuation to fund dental services rose sharply, with the number doubling in two years to 32,875 requests. 

Dentists have recently issued new guidelines about compassionate early access to super to pay for dental work. Information about that is in the breakout story below. 

Government watchdogs, including the Taxation Office (ATO), have had enough – warning medical practitioners, and others who arrange early release, they risk severe penalties if they are found to have made a false or misleading statement in the claims they arrange. 

“We are seeing practitioners making inaccurate statements in medical reports,” ATO Deputy Commissioner Emma Rosenzweig said. 

“The ATO relies on medical and dental professionals to act in the best interests of their patients to prepare accurate reports regarding their diagnoses and the required treatment strategy.” 

There are firm rules governing the early release of super funds for compassionate reasons. To be approved, medical services need to be certified by two practitioners and need to be deemed medically necessary to alleviate acute or chronic pain, to treat a life-threatening illness or injury, or to alleviate acute or chronic mental illness.

However, rising medical costs including specialist fees and dental treatment, and the perceived declining value of private health insurance has created a market for some practitioners to exploit the compassionate release provision. 

Australian Health Practitioner Regulation Agency (AHPRA) CEO, Justin Untersteiner, said “some businesses and practitioners are taking advantage of this process to push overly expensive or unnecessary treatments. 

“There is an inherent trust that the community places in their practitioners and taking advantage of people in need is never acceptable,” he said. “Any advice on what procedure is necessary should be based on the patients’ best interest and not influenced by financial gain or incentives.” 

Ms Rosenzweig said, ‘While superannuation can be accessed early under compassionate grounds, this is strictly available in very limited circumstances including for critical medical and dental procedures. 

"I want to make it clear, compassionate release of super should only be considered as a last resort, where all other options of paying for the eligible expenses have been exhausted."