Applications for compassionate release of superannuation have skyrocketed, particularly for dental services, where the number of requests has more than doubled in two years.
The Australian Taxation Office has released new data and the Australian Health Practitioner Regulation Agency new guidance to try to discourage practices and business models forcing patients to mine their superannuation funds to pay for “overly expensive or unnecessary” medical treatments.
New data from the ATO shows significant growth in applications for compassionate release of superannuation, particularly for dental services, where the number of requests has more than doubled in two years.
In 2024-25, a significant portion of the $1.4 billion in superannuation that was released early on compassionate grounds was for medical treatment, the category used by the ATO that includes dental, IVF and weight loss treatment.
There were 93,500 applications in this category, the majority in relation to dental services and 30% of those were rejected by the ATO for not meeting its requirements for compassionate release.
To be approved, the services need to be certified by two practitioners as necessary to alleviate acute or chronic pain, to treat a life-threatening illness or injury or alleviate acute or chronic mental illness.
The ATO’s deputy commissioner Emma Rosenzweig said she was concerned that some health practitioners and registered agents were inappropriately supporting individuals to access their superannuation on compassionate grounds, particularly for cosmetic procedures that weren’t aligned to compassionate release requirements.
“While superannuation can be accessed early under compassionate grounds, this is strictly available in very limited circumstances including for critical medical and dental procedures,” said Ms Rosenzweig.
“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.
“We are seeing practitioners making inaccurate statements in medical reports,” said Ms Rosenzweig.
“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.”
AHPRA and the Dental and Medical Boards of Australia today released new guidance for doctors and dentists in response to those ongoing concerns of inappropriate conduct.
AHPRA CEO Justin Untersteiner said the guidance emphasised the need for a thorough assessment by an appropriately skilled practitioner, that prioritised the person’s health.
“I’m stunned to hear that some businesses and practitioners are taking advantage of this process to push overly expensive or unnecessary treatments,” said Mr Untersteiner.
“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 released a position statement in May this year and today’s new guidance reiterates that any treatments recommended by practitioners should only be certified if they are necessary.
It also includes a warning for practitioners that providing financial advice without a licence could also result in severe penalties from the Australian Securities & Investment Commission.
Complaints to AHPRA about practitioners in this area generally relate to treatment already provided and funded through early access to super. Regulatory action has ranged from cautions and conditions to referral to a tribunal.
Other penalties apply to individuals, health practitioners or registered agents who help to prepare or submit an application for health treatments that are not necessary, as this would be considered making a false or misleading statement to the commissioner.
The Australian Dental Association also released new guidance today which includes information on advertising restrictions, presenting patients with all treatment options and costs, and rules around contributing to the medical reports which accompany the application.
The compassionate release of super guidelines for patients include how the money must be used, a reminder to patients that their dentist cannot give financial advice and what some of the eligibility criteria are. They can be found here.
“The ability to access superannuation early to pay for critical dental treatment is an important part of our health safety net,” said ADA president Dr Chris Sanzaro.
“The scheme has provided welcome financial relief for tens of thousands of people needing urgent dental treatment.
“We’re also stressing that, as well as reports, patients need a quote from the practitioner about the cost of treatment necessary to treat the acute condition, as well as an indication of future treatment and maintenance costs.
“That way there’s complete transparency for both sides.”
