Need to know
- A CHOICE/Super Consumers Australia investigation found some companies coaching Australians to improperly withdraw their super to pay for cosmetic dental work
- Third-party companies have formed 'partnerships' with dentists, who have a financial interest in signing off on people withdrawing money to get work done
- The regulator is investigating an alleged case of a dentist and doctor making false declarations to help someone illegally withdraw their super for dental work
Generally, your super is meant to be untouchable until you retire.
However, there are limited exceptions to this rule. You can withdraw money from your super account if you're in severe financial hardship or need it for medical procedures.
The number of Australians accessing their super early for medical procedures has risen sharply in recent years, from 22,700 applications approved by the Australian Tax Office (ATO) in 2018–19 to 47,400 last financial year.
Experts say the rise isn't surprising given the cost-of-living crisis, but taking advantage of that rise are specialist third-party companies promising to "help" you with the paperwork to get access to your own money, for a fee.
Experts say thousands of Australians may be left with significant holes in their retirement savings without fully understanding the ramifications
A joint CHOICE/Super Consumers investigation into these companies and the way they operate in the field of dentistry has found potentially concerning conflicts of interest and, in some instances, coaching of clients on ways to get around the strict ATO rules that limit when super can be released.
At least one dentist is under formal investigation by the medical regulator, relating to a client referred by one of these third-party companies, and experts say thousands of Australians may be left with significant holes in their retirement savings without fully understanding the ramifications.
What are the rules around early access to your super?
The ATO laws say that early release of super on medical grounds can only be done to treat a life-threatening illness or injury, alleviate acute or chronic pain or alleviate acute or chronic mental illness. Crucially, the treatment must not be readily available through the public health system.
Dental work, as well as IVF and weight loss surgeries, are the three most common medical reasons for early super withdrawal and also the areas with the most growth in recent years.
Both the companies we looked into for this article offered their services to customers seeking procedures in these three medical areas. However, we chose to focus our investigations on dentistry.
Dental procedures that are for cosmetic or non-acute pain reasons are not eligible for early release of super.
Cosmetic dental procedures do not meet the ATO requirements for the early release of super.
Who are the businesses offering to help you access your super early?
There are two major companies offering third-party assistance in getting early access to super on medical grounds: My Super Care and Access My Super.
My Super Care's website says they have "helped countless Australians apply for the Early Release of their superannuation", and goes on to list a series of dental procedures that they can assist with applications for, such as crowns and braces.
"Braces are just not a cosmetic procedure to improve the look of your smile – they can also be a permanent orthodontic solution to serious dental conditions," they say.
They also suggested some dentistry clinics that may pay the $780 fee up front for you and recoup the costs once the application was approved
My Super Care told us the fee to lodge a dentistry application was $780 upfront, but that there was a no-approval, no-fee guarantee which would grant you full refund if your application failed.
They also suggested some dentistry clinics that may pay the $780 fee up front for you and recoup the costs once the application was approved.
Access My Super makes similar promises of a smooth and easy process.
"Our friendly team takes care of the application and lodgement process for you, allowing you to focus on your brand-new smile." They also say they "can help you … to access your super to fund all of your dental treatments".
Access My Super charges a $679 upfront fee to do the application for you.
Growing concerns
A spokesperson for the Australian Health Practitioner Regulation Agency (AHPRA) tells CHOICE that, "Providing misleading information to support a patient's request to draw from superannuation is potentially grounds for the Board to consider disciplinary action, in addition to any action that the ATO may deem necessary".
The AHPRA spokesperson says it is working with the ATO to understand why these applications are becoming more common and "whether there are any professional conduct concerns identified about health practitioners involved in these applications".
"Good dental practice involves upholding patients' right to access necessary levels of healthcare while ensuring the services provided are necessary, appropriate, and likely to benefit the patient," an AHPRA spokesperson says.
An ABC report in October told the story of Daniel, who took $67,000 out of his super to pay for dental work but didn't realise he would have to pay an additional $19,300 in tax on the withdrawn amount.
In Daniel's case the application was managed by My Super Care who allegedly didn't initially inform him about the tax implications until he later asked them.
A My Super Care consultant provided direction on how to talk to a dentist to ensure a successful application.
What our investigation found
We decided to investigate these companies ourselves.
We approached My Super Care and Access My Super posing as potential customers and said our dentists had refused to sign off on our ATO paperwork, but that we didn't have the funds to pay for the work otherwise.
Michael* approached My Super Care saying he was "unhappy" with his teeth and that they had caused him "some pain" in the past, but that his dentist said it wasn't acute pain.
What followed was concerning. The My Super Care consultant then coached him on how he could talk to his dentist to ensure his application would be successful.
"When we talk about pain, sometimes it's not just the physical pain that you're feeling, Michael. Circumstances that we can consider under the pain criteria is if you're having jaw issues, gum issues, finding it difficult to eat or if you have bite issues," the consultant said.
The My Super Care consultant then coached him on how he could talk to his dentist to ensure his application would be successful
Michael then said his dentist wouldn't sign off on the ATO paperwork and asked if there was someone else he could go to. The consultant referred Michael to a list of "partner" dental clinics that they "work with all the time".
"The good thing is that if you choose one of our partner clinics, it won't be a problem supporting you," she said.
Access My Super on the other hand, did not attempt to coach Michael on how to speak to his dentist. They did send Michael a list of 10 specific local dentists when he asked for a dentist to get a second opinion, and noted "it is ultimately up to the dentist as to whether they will support your application under acute or chronic pain".
Neither Access My Super or My Super Care told our 'customers' about the potential tax ramifications of withdrawing their super early.
Responses from the companies
We asked My Super Care and Access My Super how they ensure the dentists and doctors they work with make an independent assessment that the patient needs the dental work.
My Super Care didn't respond to questions from CHOICE.
In a statement, Access My Super said: "At no time do we provide financial advice and that is made clear when we engage with patients."
"Access My Super has partnerships with some dental clinics, but we operate independently and do not rely on incentive or referral benefits."
Is the ATO just rubber-stamping these super applications?
Both of these companies claim a very high success rate, raising the question about how thoroughly the ATO is assessing applications. Overall, around one third of dental applications for early super release are knocked back, though there is no way of telling how many of these are associated with third-party companies.
Dr Elizabeth Deveny, CEO Consumers Health Forum of Australia, says at the moment regulation of the system is falling into a gap between APHRA and the ATO with neither body properly overseeing the scheme.
"This whole system and how it's assessed needs to be revised and consumers should be front and centre of that process," Dr Deveny says.
Regulation of the system is falling into a gap between APHRA and the ATO with neither body properly overseeing the scheme
A spokesperson for the ATO told CHOICE they relied on the professional expertise and ethics of the medical practitioners who provide reports to them.
"The ATO is not medically qualified to question diagnoses or treatment plans. We note that medical practitioners who provide false or misleading reports for compassionate release of super applications can be subject to penalties or prosecution," they say.
"Accessing super on compassionate grounds is only available in limited circumstances where individuals are unable to pay for eligible expenses using any other means. It is not 'free money', as it will reduce the amount available in retirement and results in additional tax," the spokesperson adds.
Conflicts of interest and an underfunded dental care system
Lesley Russell, adjunct associate professor at the Menzies Centre for Health Policy and Economics, University of Sydney, told CHOICE she is "hesitant" about dentists having a financial incentive to sign off on patients accessing super for dental work, especially where this work isn't essential.
"I can see that people might need help if they have to get access to their super to do it, but it looks to me like a conflict of interest," she says.
In Russell's view, there are risks in making it too easy for people to get their super out for dental work because withdrawing this money will have negative consequences for them as they have less income in retirement.
But on the other hand, Russell says it's a massive problem when people can't get the dental care they need. She distinguishes between those accessing their super to address clinical need (which is allowed under the early access scheme) and a cosmetic need (which isn't allowed).
Dr Deveny agrees that the 'worrying trend' that we are seeing now is a result of basic healthcare becoming unaffordable for so many people
Ultimately, Russell says that super can't provide a solution for gaps in Australia's healthcare system when it comes to dental work. "The irony here is that the people who most need dental care are the people who probably don't even have any superannuation," she says.
Dr Deveny agrees that the "worrying trend" that we are seeing now is a result of basic healthcare becoming unaffordable for so many people.
"What we are seeing, and we've been seeing for a while now, is private medical practitioners and dental practitioners adopting the superannuation payment process almost into their business model and advertising," she says.
Our analysis: The true cost of withdrawing your super early
Because of the long-term nature of super and the impact of compound returns, making an early super withdrawal can end up costing someone far more than the initial amount they take out.
Analysis by Super Consumers Australia finds that if a 40-year-old on the median income took out $23,000 from their super to pay for dental work, by the time of retirement age at 65 they would, on average, be more than $64,000 worse off in today's dollars.
The way forward: How to help people get the dental work they need
Super Consumers Australia policy manager Rebekah Sarkoezy says the current system clearly isn't working for everyone.
"We need the federal government to explore alternatives to people draining their super for dental care, and to prohibit unfair trading practices so that people aren't pressured and misled into accessing their super," she says.
Sarkoezy says that while dental problems can significantly disrupt your life, it's best to avoid using third-party companies to access your super for dental treatments.
Instead, she says people should seek free and independent advice from a financial counsellor who can help them understand if withdrawing their super is the right option for them and may be able to point to other options.
Sarkoezy suggests contacting the ATO for more information if you're applying to access your super early and finding the application process challenging.
*Name has been changed.
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