Understanding the ATO’s Crackdown on Early Super Access Schemes
When you’re hit with unexpected medical bills, accessing your superannuation early on compassionate grounds can feel like a lifeline. But recent warnings from the Australian Taxation Office (ATO) and health regulators highlight disturbing new trends that could leave you in serious financial—and even legal—trouble.
What’s Happening?
While most health practitioners act in their patients’ best interests, the ATO and regulators have flagged unethical practices by some providers, including:
- Inaccurate medical reports submitted to support ineligible super access (e.g. for cosmetic procedures), sometimes without a proper consultation or physical examination.
- Premium pricing, over-servicing, or recommending expensive treatments without outlining all available alternatives.
- Using patients’ myGov credentials to lodge applications—something individuals are legally required to do themselves.
- Charging fees to help submit applications without being registered tax agents.
- Advising super access for treatment costs without holding an Australian Financial Services (AFS) licence.
These behaviours may not only be unethical—they could be illegal.
Red Flags to Watch Out For
The Australian Health Practitioner Regulation Agency (AHPRA) and medical boards are warning about the “deeply concerning” financial harm caused to patients who’ve withdrawn large amounts of super to fund treatment.
Here are signs you should be cautious:
- Telehealth consultations used inappropriately where a physical exam is clearly needed
- Pressure to pay upfront
- High-cost treatment plans with no mention of cheaper options
- Limited or vague cost details, or aggressive sales tactics
- Requests for your myGov login details
What Qualifies for Compassionate Release?
The rules are strict. You (or a dependent) must require medical treatment to:
- Treat a life-threatening illness or injury
- Alleviate acute or chronic pain, or
- Alleviate acute or chronic mental illness
The treatment must also not be readily available through the public health system.
Importantly, purely cosmetic procedures—such as dental veneers—typically do not qualify for compassionate super release.
The Consequences
If your application contains false or misleading information, the ATO may:
- Cancel your approval
- Impose additional income tax and penalties
- Apply interest charges on any shortfalls
- Take action against health practitioners who provide false reports
Worse still, anyone found promoting illegal super access schemes may face civil or criminal penalties, including fines or even imprisonment.
How to Protect Yourself and Your Super
Your super is there to support you in retirement. Compassionate release is a vital safety net, but it must be used properly. Make sure you’re dealing with ethical health professionals who:
- Put your best interests first
- Are transparent about treatment options and costs
- Never ask for your myGov login
- Are not motivated by financial incentives
If something doesn’t feel right, trust your instincts. You can report concerns anonymously via the ATO website or app, or contact AHPRA or your state’s health complaints authority or ombudsman.