Advertisements offering patients “simple” access to their superannuation to pay for medical treatments have been described by the peak consumer health body as a “worrying trend” amid the cost-of-living crisis.
The Australian Taxation Office (ATO) approved 37,400 individuals to access their superannuation early on compassionate medical grounds in 2022-23, releasing a total of $730m.
That compares with 30,100 individuals and $545m the previous year. Of those approved in 2022-23, 13,540 people used the funds for dental treatment, 2,780 for IVF and 14,410 for weight loss treatments.
The chief executive of the Consumers Health Forum, Dr Elizabeth Deveny, said: “Together with the rising cost of living, we believe that one of the reasons more people are dipping into their super to pay for their healthcare costs is because of the increasing privatisation of Australian healthcare.
“It is a worrying trend.”
She said that as more services were offered privately – rather than through Medicare – people would increasingly need to pay large out-of-pocket amounts to cover their healthcare costs.
There are strict rules about accessing super for medical treatment. Individuals must provide the ATO with a medical report from two registered medical practitioners, one of whom must be a specialist in the field of treatment.
The reports must certify that the treatment is required to treat a life-threatening illness or injury, alleviate acute or chronic pain or alleviate an acute or chronic mental illness and that treatment is not readily available in the public health system.
But numerous online advertisements, especially for dental treatment, describe accessing superannuation for medical purposes as a “quick” and “simple” process and offer services to help patients to do so.
“We are concerned about a business model where private providers are helping people to access their super for this reason, in tandem with promoting clinics who offer a range of services,” Deveny said.
“While we recognise that it is not illegal for dental practitioners to be advertising in this way, we aren’t exactly thrilled by it either. For us, it is a worrying trend that more and more health professions might soon start encouraging their patients to dig into their super too.”
In February, the financial services minister, Stephen Jones, said in an address to the Sydney Institute: “There are surgeons and medical practitioners who view super as their personal river of gold.
“They are encouraging, and even pressuring, patients to tap into their super for what might be termed life‑enhancing procedures like cosmetic surgery,” he said.
“There are business models set up to game the system. It is greedy.”
A spokesperson for the minister said he stood by the comments, and that the objective of superannuation was “to preserve savings to deliver income for a dignified retirement”.
The spokesperson said ATO data could not be examined at a more granular level to determine the process that led to the release of funds, but said the minister had been approached by “concerned stakeholders” concerned that “individuals are actively encouraged to access their super to pay for medical procedures”.
An ATO spokesperson said staff thoroughly reviewed every application to determine whether they met a lawful ground for release of funds.
But the scheme “appropriately and necessarily relies on the professional ethics of medical professionals to provide accurate reports”, the spokesperson said. “ATO staff are not equipped, or required, to question a patient’s diagnosis or the required treatment strategy.
“It would be deeply inappropriate for the ATO to interfere in the relationship between a patient and their medical professional and double-guess a diagnosis.”
The chief executive of the Australian Dental Association, Damian Mitsch, said if people could not access dental care unless they dipped into superannuation it was “indicative of a healthcare system in which some people are desperate and unable to afford essential care”.
“Our advice to Australians is that accessing superannuation can have long term financial effects … people should properly understand what the long term financial impact is before agreeing to sign off on a superannuation withdrawal.”
• Do you regret accessing superannuation for medical reasons? contact melissa.davey@theguardian.com
