ATO Deputy Commissioner Emma Rosenzweig said there’s been a ‘significant’ increase in the number of people wanting to access their super early. (Source: ATO/Getty)
The tax office and Australia’s health regulator have joined forces to issue a warning to people asking to access their superannuation early for medical procedures. This is one of the very few reasons Aussie workers are able to crack open their retirement nest eggs before they retire.
But the Australian Taxation Office (ATO) and the Australian Health Practitioner Regulation Agency (AHPRA) are concerned at the “significant growth” in applications for compassionate release of super. ATO deputy commissioner Emma Rosenzweig said requests have more than doubled in two years.
“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,” she said.
Dental services are regularly cited in these requests for early super access, as well as a range of other medical operations or resources.
But the ATO said access will only be granted for “critical” services, rather than everyday or cosmetic work.
The services have to be certified by two professionals as necessary to:
Alleviate acute or chronic pain
Treat a life-threatening illness or injury
Alleviate acute or chronic mental illness
Over 2024-25, there were 93,500 applications in the medical category, with 30 per cent being rejected because they didn’t meet the threshold.
A total of $1.4 billion in superannuation was released last financial year.
Withdrawing thousands of dollars from a super fund can cost Aussies tens or even hundreds of thousands more in retirement, depending on how old they are.
Do you have a story? Email stew.perrie@yahooinc.com
The ATO and AHPRA fear medical practitioners are the ones driving this trend.
“I’m stunned to hear that some businesses and practitioners are taking advantage of this process to push overly expensive or unnecessary treatments,” AHPRA CEO Justin Untersteiner said.
“There is an inherent trust that the community places in their practitioners and taking advantage of people in need is never acceptable.
“Any advice on what procedure is necessary should be based on the patients’ best interest and not influenced by financial gain or incentives.”
AHPRA and the Dental and Medical Boards of Australia are releasing new guidance for doctors and dentists to stamp out this behaviour.
It urges medics to provide treatment options based on the “best available information” that are “not influenced by financial gain or incentives”.
“We are seeing practitioners making inaccurate statements in medical reports,” 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.”
These dodgy medical professionals are being warned that the penalties for breaching the rules can range from a caution to being referred to a tribunal.
Australian workers can only tap into their retirement nest eggs when they finish work completely or reach preservation age, which is 55 to 60, depending on when they were born.
They can also access their super after 65, even if they are still working.
But the following are grounds that can be used in compassionate requests for early access:
Medical treatment for you or your dependent
Medical transport for you or your dependant
To modify your home or vehicle to accommodate special needs arising from your or your dependant’s severe disability
Palliative care for you or your dependent’s terminal illness
Death, funeral or burial expenses for your dependant
To prevent foreclosure or forced sale of your home
Get the latest Yahoo Finance news – follow us on Facebook, LinkedIn and Instagram.