Australians withdrew more than $1.4 billion from their superannuation on compassionate grounds in the last financial year, with most of the money spent on medical and dental treatments. Regulators have warned against misuse of the scheme for unnecessary or overly expensive procedures.
Rising Withdrawals for Medical Expenses
According to the Australian Taxation Office (ATO), withdrawals under the compassionate access scheme reached $1.37 billion in 2024–25, up from just over $1 billion in 2023–24. The figure has surged dramatically compared to $389 million in 2018–19, showing a sharp upward trend in early access to retirement savings.
The vast majority of approvals were for medical treatment and transport, continuing a pattern seen in recent years. Tens of thousands of Australians applied to use their superannuation to cover costs such as surgery, dental work, and other health-related expenses.
Concerns Over Misuse
The ATO and the Australian Health Practitioner Regulation Agency (AHPRA) have raised concerns that some health practitioners and agents are encouraging patients to access superannuation for procedures that do not meet the strict criteria, particularly cosmetic treatments.
Deputy Commissioner Emma Rosenzweig stressed that early access is only permitted in very limited circumstances. “While superannuation can be accessed early under compassionate grounds, this is strictly available in very limited circumstances including for critical medical and dental procedures,” she said.
How the Scheme Works
The compassionate release of superannuation allows withdrawals to cover:
- Medical treatment and transport
- Palliative care
- Disability-related expenses
- Funeral or death-related costs
- Home foreclosure prevention
Applicants must provide medical certification and meet strict eligibility requirements. Regulators are now moving to tighten oversight to ensure the scheme is not exploited by businesses promoting unnecessary or inflated treatments.
Broader Implications
The surge in withdrawals highlights both the rising cost of healthcare and the financial pressures facing Australians. While the scheme provides relief for those in urgent need, experts warn that dipping into retirement savings can have long-term consequences, reducing financial security later in life.
The ATO and AHPRA have pledged to monitor applications more closely and crack down on practices that misuse the system, aiming to protect both patients and the integrity of the superannuation framework.
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