ATO, Ahpra issue joint warning over early super withdrawal

The Australian Taxation Office (ATO) and the Australian Health Practitioner Regulation Agency (Ahpra) have teamed up to investigate the conduct of health practitioners and registered agents suspected of encouraging individuals to seek early compassionate release of their superannuation to pay for “overly expensive or unnecessary” medical treatments.

The ATO has refreshed its earlier warning delivered in August with new data released yesterday, which found the number of applications for early release of super on compassionate grounds – particularly for dental services – has more than doubled in the last two years.

In the 2024-25 financial year, 93,500 applications of the $1.4 billion in superannuation that was released early on compassionate grounds were for medical treatment, covering dental, IVF or weight loss, with 30 per cent rejected by the ATO for not meeting eligibility requirements.

ATO Deputy Commissioner, Emma Rosenzweig, said concerns were raised that medical practitioners and registered tax agents are “inappropriately supporting individuals to access their superannuation on compassionate grounds” for non-eligible cosmetic procedures, as applications need to be authorised 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”.

“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.

“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.”

Ahpra chief executive, Justin Untersteiner, said the new guidance released yesterday by the agency and the Dental and Medical Boards of Australia re-affirms the role of practitioners to complete thorough assessments that prioritise people’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,” he said.

“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.”

The guidance also contains a warning for practitioners that they may be subject to rules enforced by the Australian Securities and Investment Commission (ASIC) for providing unlicensed financial advice.

“We are seeing practitioners making inaccurate statements in medical reports. 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,” Rosenzweig said.

Previous regulatory action against practitioners who have contravened these rules regarding early access to super has ranged from cautions to a tribunal referral.