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<\/p>\nAustralians withdrew a record $1.46 billion from their superannuation last financial year on compassionate grounds, prompting regulators to sound the alarm over “predatory” sales tactics being used by health practitioners.<\/p>\n
The amount of money taken from retirement nest eggs for compassionate reasons like medical treatment has skyrocketed in recent years, up about 220 per cent since 2018-19.<\/p>\n
Consumers Health Forum (CHF) CEO Elizabeth Deveny said it reflected a health care system that had become increasingly unaffordable.<\/p>\n
Financial hardship resources:<\/p>\n
“When people are hit with a health bill on top of the cost-of-living crisis, it’s understandable people reach for the only tools available to them,” she said.<\/p>\n
“Increasing numbers of Australians are having to choose between living in pain now or being poor in retirement.”<\/p>\n
Under the Australian Tax Office (ATO) early release rules, Australians can apply to withdraw money from their retirement funds on compassionate grounds, such as medical or funeral expenses.<\/p>\n
Australians withdrew about $1.46 billion from their superannuation on compassionate grounds in 2025-26, with the vast majority of that \u2014 about $1.42 billion \u2014 used for medical costs including dental work.<\/p>\n
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CEO of Super Members Council Misha Schubert says the early release provisions are designed for extremely rare circumstances. (ABC News: Ian Cutmore)<\/p>\n
Super Members Council CEO Misha Schubert said compassionate release provisions were an important safety net, but were designed to be used only in extremely rare circumstances.<\/p>\n
“We’re deeply concerned to see the scale of the financial damage that’s being done often to very vulnerable Australians,” she said.<\/p>\n
Almost 65,000 applications for compassionate release of super were approved in 2025-26, which the ATO said was a 5 per cent decrease from the previous year.<\/p>\n
ATO Deputy Commissioner Ben Kelly said while that drop was promising, some businesses were still trying to exploit the system.<\/p>\n
“Our message to individuals and medical practitioners is clear, compassionate release of super should only be considered as a last resort,” he said.<\/p>\n
Total compassionate release of super applicationsFinancial year2018\u2013192019\u2013202020\u2013212021\u2013222022\u2013232023\u2013242024\u2013252025\u201326Applications received53,80060,00045,30056,40075,60090,700112,400109,600Applications approved31,10033,70029,50034,40041,80053,10067,90064,600Individuals applied33,80039,10036,30045,60057,80068,90081,50080,800Individuals approved26,90030,00027,20032,20039,60050,00063,30060,900Amount approved ($m)456.6523.2472.4573.1761.71,040.41,416.01,456.7<\/p>\n
Source: ATO<\/p>\n
‘Concerning trend’ from health practitioners<\/p>\n
For the early withdrawal of super to be approved on medical grounds, two medical practitioners need to verify it is necessary to alleviate pain or mental illness, or to treat a life-threatening illness or injury.<\/p>\n
The ATO has been working with the Australian Health Practitioner Regulation Agency (AHPRA) to crack down on a “concerning trend” of health practitioners, like dentists, encouraging people to withdraw their superannuation inappropriately for services, such as cosmetic dental procedures.<\/p>\n
“We are concerned by predatory sales tactics that use social media and internet advertising to attract patients for high-cost treatments they do not need or cannot afford,” AHPRA CEO Justin Untersteiner said.<\/p>\n
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AHPRA CEO Justin Untersteiner says predatory tactics on social media and internet advertising can lead to patients seeking high-cost treatments. (Supplied: AHPRA)<\/p>\n
Over the past year, the ATO has ramped up compliance and fined practitioners a total of $1.5 million for making misleading statements so patients could secure early superannuation access.<\/p>\n
One practitioner was fined around $30,000 for writing a medical report that relied on false clinical information, including an incorrect classification of the patient’s condition.<\/p>\n
A GP found to have engaged in professional misconduct<\/a> while helping a patient access almost $20,000 of her superannuation for cosmetic liposuction was one of two health practitioners referred to tribunals by regulators, amid almost 100 related complaints between 2019 and April this year.<\/p>\n Ms Schubert said consumers needed stronger protections, calling for a ban on any advertising that promotes access to early super withdrawals.<\/p>\n “We’re calling for this to be a real moment for the parliament and lawmakers to step in to protect vulnerable Australians to make sure that they have that strong nest egg of their retirement savings secured for them in retirement,” she said.<\/p>\n What type of treatments was money withdrawn for?<\/p>\n Dental was again the most popular reason for someone to withdraw their superannuation on medical grounds, with $892 million taken out in 2025-26.<\/p>\n That is a 13-fold increase since 2018-19, when about $66 million was approved for release.<\/p>\n
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