Super and IVF: Whose money is it, anyway?

NGS Super is highlighting how members can get super money out early to pay for fertility treatment. Picture: iStock

A row over tapping super money for IVF captures perfectly the looming political debate over super. Whose money is it anyway?

Defying the government’s mantra that super money is strictly for retirement purposes, industry fund NGS has broken ranks. The $15bn fund is highlighting how members can get super money out early to pay for fertility treatment.

In publicising IVF options for its members, NGS Super does not just fly in the face of government policy. It also risks joining forces with a range of debatable advertising campaigns from companies that ‘‘guide’’ IVF couples into how they can take super out early to pay for procedures.

“We’re not promoting IVF services paid through super, we are raising awareness among our members how this can be done,” NGS chief executive Natalie Previtera says.

The NGS fund is an independent teachers’ fund where 70 per cent of membership is female and the average age is mid-40s. “The point is that super money is members’ money first,” Previtera says.

But Naz Randeria, a specialist superannuation auditor, echoes many financial advisers in warning against any such moves.

“Taking super out early for something like IVF has potentially horrible ramifications,” she says, despite a range of IVF operators such as Monash IVF regularly promoting early access to super.

“Advertising that IVF can be accessed through super can play on people’s emotions.”

She points to the obvious long-term cost: extracting super money before retirement ultimately undermines long-term savings. But she says there could also be unexpected increases in insurance costs following any withdrawals.

“Money taken out is also treated as income for that financial year, which will potentially push up taxes – people need to be educated about long-term consequences here,” she warns.

In response, Previtera says: “We would alway ensure that any member getting super money out early gets advice from us on every aspect of the decision.”

NGS chief executive Natalie Previtera says: “We want our members to know they can apply to access super early for medical procedures, including IVF.’ Picture: Bloomberg

The controversial Covid-era early super release program from the Coalition broke the taboo that super was strictly for retirement. Under the program more than $36bn was taken out of the ­system.

More recently the Coalition has pushed for super to be available for first home deposits. “Superannuation is Australians’ money, not the government’s and not the fund managers,” says opposition Treasury spokesman Angus Taylor.

Tapping super money before retirement is traditionally difficult under the so-called ‘‘extreme hardship’’ criteria. However, in recent years the ability to get money out on a ‘‘compassionate grounds’’ criterion has changed the numbers. In the 2022 financial year there were 56,000 applications under the compassionate criterion, with 34,000 successful.

The wider debate over how super money should be managed has been brewing in Canberra, with Treasurer Jim Chalmers trying a number of different strategies, including a request for a big super fund to help in nation building. This week The Australian reported the Treasurer’s latest idea, where super funds could follow government designs and offer a default retirement product to retirees, has been roundly criticised by leading industry players. The Financial Services Council and top industry fund Aware have openly rejected a one-size-fits-all solution for retiree super products.

Meanwhile, the latest super figures show women are taking more control over their own super, especially among self-managed super funds where the average balance for women is rising faster than for men.

In a quarterly report last year, more women between the age of 35 and 44 established new SMSFs than men.

According to Previtera at NGS: “For some women the time to have a child may be crucial and waiting for the day when their finances are better might not be an option.

“We want our members to know they can apply to access super early for medical procedures, including IVF.”

Anyone trying to get money out of their super for IVF has to get documentation that includes two medical reports from registered specialists proving the criteria have been met.

Asked if the NGS Super would accept a tightening of the rules around early super access from the government, Previtera says: “We won’t support anything that disadvantages women members.”