Sam Hawley: The cost of medical treatments and dental work in Australia can be exorbitant. So, no wonder more and more people are accessing their superannuation funds early to pay for things like IVF and dentist bills. Mainly, it’s an understandable and totally legitimate thing to do. But not always. Today, ABC reporter, Celina Edmonds, on her investigation into how the rules are being exploited. I’m Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. Celina, the point of compulsory superannuation is that we have money put away for our retirement. So, we shouldn’t really touch it until then. But there are some reasons why people access their super early if they need it. Now, you’ve been talking to some people that have actually done that. First, just tell me about Anne.
Celina Edmonds: Sam, Anne Harris, she’s 56 years old from the Hunter region of New South Wales. Now, Anne applied to withdraw $66,000 from her super as part of the Compassionate Early Release Scheme. She’d had a lot of issues with her teeth going back many, many years. And after two pregnancies, she told us they’d become chalky and broken.
Anne Harris: And it just got to the point that I wouldn’t smile or anything. My teeth were bad. They weren’t like they used to be
Celina Edmonds: And eventually, she had to have her top teeth removed and replaced with an upper denture. And she spent most of her time taking that denture out. She hated wearing it.
Anne Harris: I started to gag a lot. I didn’t seem to like having the plate touch the top of my mouth. I dropped them a few times. I’d have to get them fixed and keep going back and getting them realigned and remoulded again.
Celina Edmonds: So after a decade of this ill-fitting denture, she decided that she wanted to start the process of looking to get dental implants. And then she says the dentist referred her to a company that helped her to apply and take out the $66,000 that it was going to cost for the dental implants.
Anne Harris: And then when they said, you know, you can use your super, I went, oh, I might be able to get this done.
Celina Edmonds: So look, she’s really happy with them, and she wishes she’d done it sooner. She’s not overly worried about the financial impact that withdrawing her super has had on her future financial situation.
Anne Harris: I haven’t been happy for a long time. So did I want to have a happier life? When I retire, I don’t need to have a lot of money. I just thought, well, you know, future Anne can worry about that. This Anne’s just going to, yeah, just going to go for it and try and, you know, improve life.
Sam Hawley: $66,000, it’s such a huge amount of money. Yeah, dental work is not cheap, Celina, that’s for sure.
Celina Edmonds: Certainly not.
Sam Hawley: But it does sound like it was worthwhile for Anne. But she did, didn’t she, have to meet pretty strict conditions to be able to get this money out of her super account?
Celina Edmonds: There are strict conditions. So it is the ATO that is in charge of saying whether you can or can’t take out your super annuation on compassionate grounds. And so if you or your dependent need money for palliative care, say, or you have terminal cancer and you need treatment, you can access your super if you apply to the ATO. Death, funeral or burial expenses for your dependent as well. You can also apply to use super to prevent foreclosure on the sale of your home. Medical services need to be certified by two practitioners and it needs 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. So it can be used for surgery, psychiatric treatment, IVF treatment. And of course, as we’re seeing so often, dental treatment.
Sam Hawley: The conditions are actually quite strict, but the number of Australians that are being granted early access has really, really skyrocketed over the past few years, hasn’t it?
Celina Edmonds: Yes, Sam, it’s supposed to be considered a last resort where all other options of paying for these expenses have been exhausted. So what we saw last financial year was 63,000 or so people approved to withdraw a combined $1.37 billion from their super for medical costs. So that’s more than ever before. And those medical treatments, they’re the biggest category. $254.9 million was approved for weight loss. $74.2 million approved for IVF. But listen to this dental treatment, $817.6 million approved in 2024-25. It’s more than doubled in the past two years.
Sam Hawley: Incredible. OK, so so in our Australians, they’re dipping into their superannuation early for legitimate reasons. As you say, dental is one of them. And, you know, that is really important, dental health. But there is growing concern, isn’t there, that sometimes this permission is being granted for all the wrong reasons?
Celina Edmonds: The ATO and the health regulator, they’re concerned about the scale of people that are now getting access to their superannuation early for the wrong reasons because they have had complaints. And they’ve combined forces to say that the increase is partly due to business models and practices of clinics that seek to use super to pay for overly expensive or unnecessary medical treatment. And they’re concerned that some practitioners have been acting inappropriately by supporting people to access super for cosmetic procedures like veneers, for example, which are not allowed under this scheme.
Sam Hawley: All right. Well, you better tell me now about Trish, because she really did get caught out by this, didn’t she?
Celina Edmonds: She certainly did. Trish is a service station worker. She’s 60 years old and she struggled with deep insecurities about her crowded and discoloured teeth for much of her life. She was really unhappy.
Trish Gyler: I got very used to living my life, not feeling comfortable to be able to smile widely and naturally. And I was always closing my mouth and I was always covering my mouth. So, you know, it was a big thing for me.
Celina Edmonds: And so she came across a social media ad for a company called Super Care Dental and Cosmetics. Now, the ad spruiked that to achieve the smile you’ve always wanted, potentially it could be affordable through your super fund.
Advertisement : You can use your super for an excellent dental treatment, effective services that speak for themselves, easy payments through superannuation funds.
Celina Edmonds: And she was quoted $43,000 for implants, crowns, plastic aligners and veneers when she went to visit their clinic. She said that Super Care Dental then put her in touch with an early release agent who advised her how to withdraw her super from the ATO on compassionate grounds. And she described the process now as way too easy.
Trish Gyler: Next thing I know, I’m getting a letter to say we have approved your figure on compassionate grounds and it was approved, even though looking at the care plan, it was nearly all cosmetic. I only needed a letter from my doctor and the people basically told me what they what my doctor had to say.
Celina Edmonds: She ended up taking out more than $56,000 dollars from her superannuation, including tax, before paying the total cost of the work up front as she was obliged to by a contract that she was made to sign by the clinic.
Sam Hawley: But then the worst thing about this is that she didn’t even get what she paid for.
Celina Edmonds: That’s right. We’ve been reporting on Super Care Dental and Cosmetics since May of this year, and the company collapsed. The clinics across New South Wales went bust and the dental work for Trish and so many others was never finished because they went into liquidation. So we’ve been overwhelmed since we began reporting on that story by the number of people coming to us with unfinished dental work and unhappy with existing dental work.
Trish Gyler: I can’t think about retirement. I don’t know what that looks like. I work in retail. I work behind a desk. I can envisage myself as an 80 year old in an A-frame. You know, is that the sort of thing that I’m going to look forward to?
Sam Hawley: So this, Celina, is exactly what the ATO is worried about. So just tell me, what sort of oversight is there in this application process? Who’s doing the checks and balances on this?
Celina Edmonds: Your application, along with the paperwork and the opinions of two medical specialists, say when it comes to medical treatment, goes off to the ATO. But it’s unclear how many eyes are then on it before it is granted. We do know there are a number of ATO applications that get rejected each year. So overall categories, 81,500 applied in the last financial year, 63,300 were granted. So 18,000 people rejected. The ATO, though, stresses that it’s relying on the medical practitioners, the experts to put their patients’ best interests first and provide treatment options that are based on the best available information and that are not influenced by the idea of financial gain or incentives. And we also know that some patients, they’re saying that when they got their second opinion, that wasn’t their regular medical practitioner. So we’ve heard that this system is being worked around, if you like. And because of this, the ATO and APRA have issued some new guidelines for operators warning them they’ll be keeping a close eye on these practices. And a warning too for practitioners that they are not allowed to provide financial advice to patients without a licence. And it could result in severe penalties from ASIC if they do. I’ve also spoken to the Australian Dental Association about this, Sam, they’re the peak body for dentists, some 23,000 dentists in Australia. And their president, Chris Sanzaro, says, look, it’s a comparatively small number of dentists that are engaging in inappropriate practices. But of course, they want to see this crack down on as well. And they say part of the answer is getting more public funding for dental so that people aren’t going to their superannuation as a last resort to pay for expensive dental treatment.
Chris Sanzaro, Australian Dental Association President: Governments at a state and federal level really need to consider what they’re providing in terms of dental services to the public. We know that there is a serious amount of underdone funding and under-resourcing of our public dentistry. Nearly everything else medically has a hospital system, a Medicare system that works, and there’s not that same level of support for dentistry.
Sam Hawley: All right, well, Celina, this is really important, isn’t it, that this system works? Because every time you withdraw money from your super fund, it’s money that you won’t have when you actually need it during your retirement. And what you take out today, if you left it in there, could be worth a lot more 10, 20, 30, 40 years down the track.
Celina Edmonds: Certainly could. We know that people aged 31 to 55 were approved to withdraw their super early on compassionate grounds at the highest rate. So making up about 75 per cent of withdrawals in the last financial year. And Super Consumer Australia’s CEO, Xavier O’Halloran, has told us that the cost of taking out super, which compounds across your working life, can end up costing you at least twice as much as what you paid for at the time by the time you retire.
Xavier O’Halloran, Super Consumers Australia CEO: There’s huge long-term costs to taking your super out early. Someone, say, in their 30s that take out $50,000 can be more than $100,000 worse off by the time they retire. People need to go into this really wide-eyed about what the implications are right now, but also perhaps 30 years down the track.
Sam Hawley: So I guess the message here, Celina, is that you really need to think carefully before withdrawing this super money, but also that the system needs fixing, right? The checks and balances really need to be there and they need to be strong. They do.
Celina Edmonds: I think it’s really important to remember that there’s a careful line to walk here because we don’t want to shame people for dipping into their super. If you’re going through palliative care, if you are undergoing some sort of cancer treatment, if you’re trying to prevent the foreclosure of a home, if you are living with acute and chronic pain in your mouth and there is no other option to fixing it, this is the way to access that super and fix it and get rid of that pain. Given something like dental or elective surgery costs thousands of dollars, as we know, and is not covered by the health system. I mean, it’s no wonder that people are looking to superannuation. And we’ve spoken to experts that say that this points to an inequality across Australia and a neglect of the oral health care system.
Sam Hawley: Celina Edmonds is a reporter with the specialist reporting team. This episode was produced by Sydney Pead and Jessica Lukjanow. Audio production by Cinnamon Nippard. Our supervising producer is David Coady. I’m Sam Hawley.Thanks for listening.