Superannuation Crisis: Thousands of Aussies Raiding Their Retirement Funds for Medical Emergencies, But at What Cost?
- A staggering 63,300 Australians withdrew over $1.37 billion from their superannuation for medical costs last financial year.
- The Australian Taxation Office (ATO) and health regulators are warning of unscrupulous businesses and practitioners taking advantage of vulnerable patients.
- Dental procedures topped the list of medical expenses, with $817.6 million approved for treatment – a whopping 200% increase over the past seven years!
In a shocking expose, it’s been revealed that tens of thousands of Australians are dipping into their superannuation to cover medical expenses, sparking concerns about the long-term implications for their retirement savings. According to the latest data from the ATO, a staggering $1.37 billion was withdrawn from superannuation funds last financial year to cover medical costs, with dental procedures leading the charge.
The figures are alarming, but it’s not just the sheer numbers that are cause for concern – it’s the unscrupulous businesses and practitioners who are taking advantage of vulnerable patients. The ATO and health regulators are warning of a “broader problem” within the healthcare system, where some medical professionals are encouraging patients to access their superannuation for unnecessary or overly expensive treatments.
In a heartfelt plea, Xavier O’Halloran, CEO of Super Consumers Australia, urged caution, saying, “There is a broader problem here with the affordability of some medical care… One of the biggest reasons why people are taking money out is for dental. We have a healthcare system that doesn’t really cover many dental costs unless you’re in very particular circumstances.”
But it’s not just dental procedures that are driving the trend. Weight loss and IVF treatments also saw significant increases in withdrawals, with $254.9 million and $74.2 million approved respectively. The ATO is cracking down on practitioners who are making inaccurate statements in medical reports, with 30% of applications rejected for not meeting compassionate release requirements.
As the government and health regulators struggle to contain the situation, experts are warning of the long-term consequences of raiding superannuation for medical emergencies. Xavier O’Halloran cautioned, “The cost of taking out $10,000 when you are in your 30s obviously compounds across your working life and can end up costing you at least twice as much as that by the time you retire.”
With the gender gap in superannuation withdrawals narrowing, women are still more likely to access their super for medical reasons, with 54% of withdrawals made by women. The ATO and health regulators are urging Australians to be vigilant and seek a second medical opinion before dipping into their retirement savings.
In the midst of this crisis, it’s clear that something needs to be done to address the affordability of medical care in Australia. As Justin Untersteiner, CEO of AHPRA, so eloquently put it, “Any advice on what procedure is necessary should be based on the patient’s best interest and not influenced by financial gain or incentives.”