The Super Members Council welcomes today's consumer warnings from the Australian Taxation Office about the dangers of withdrawing super early for non-critical dental and cosmetic treatments.
The Council is alarmed by a growing trend of Australians withdrawing retirement savings early to fund treatments beyond the original intent of compassionate access provisions — which were envisaged only for rare, life-saving circumstances.
We are particularly concerned by a growing avalanche of advertising luring Australians to withdraw super for non-essential treatments, often without clear warnings about the long-term financial harm.
These promotional materials, mostly generated by third-party operators who charge fees to fill out applications, undermine the purpose of super — to give Australians' financial security in retirement.
Analysis by SMC shows a person who withdraws $20,000 from their super at age 30 could be left with $93,000 less at retirement.
These catastrophic financial losses particularly harm vulnerable groups of Australians.
We support the ATO's push today to clarify the rules and protect consumers, and advocate for much more to be done to address the drivers of this issue.
SMC urges the Government and regulators to take further action to strengthen consumer protections and crack down on advertising that seeks to lure Australians to withdraw super early and subvert the safeguards in super. This should include:
- a ban on advertising that promotes early access to super for non-essential medical or dental treatments
- a ban on third-party fees for facilitating compassionate release applications, and
- stronger, clearer consumer warnings about the impact of early withdrawals on retirement savings.
We also call for much stronger transparency and data reporting on who is being targeted.
The ATO currently publishes headline figures on compassionate access, but more granular data — such as the types of procedures funded, claimant demographics, and long-term financial harm to consumers — is essential to inform policy protections for Australians.
The compassionate release framework must not be used to make Australians poorer in retirement.
SMC will continue to advocate for Government and regulators to tighten protections for vulnerable Australians who are being exploited through a combination of misconceptions, advertising, and questionable behaviour by a small group of health practitioners and third parties.
About us:
The opinions above are those of the author in their capacity as spokesperson for Super Members Council of Australia (SMC). SMC, the authors and all other persons involved in the preparation of this information are thereby not giving legal, financial or professional advice for individual persons or organisations.
