Aussies raid $1bn in super for ‘extravagant, unnecessary’ medical procedures

The healthcare watchdog will crackdown on greedy doctors and dentists as it’s revealed Australians have drained more than $1bn from their superannuation to pay for medical procedures.

Aussies are increasingly spending their super on “unnecessary” medical procedures.

Australians have drained more than $1bn from their superannuation to pay for medical procedures, many of which are extravagant and unnecessary, prompting the healthcare watchdog to crack down on greedy doctors and dentists.

But the Australian Taxation Office – which ultimately approves the release of super – won’t consider tightening the rules of a scheme that has doubled in popularity in the last five years.

Under the ATO’s compassionate release of super scheme, Australians can take money out from their super to pay for essential treatment for life-threatening, debilitating or painful conditions.

But the scheme is instead being increasingly used to pay for tummy tucks, nose jobs, and cosmetic dental procedures according to Australia’s peak body for private health insurers.

Current rules also mean cash for the scheme is paid directly to patients, with no verification on where the money is spent – meaning people could choose not to go ahead with a procedure and use the cash elsewhere.

The growing trend has led to the Australian Healthcare Practitioners Regulatory Agency (AHPRA) receiving 18 super-related complaints this financial year – which is more than the last five years combined.

It has prompted the healthcare watchdog to crackdown on practitioners who pressure patients into accessing the scheme.

Dr Rachel David CEO of Private Healthcare Australia. Picture: Tawfik ELgazzar

“We are deeply concerned by reports that some practitioners may be putting their own financial gain ahead their patients’ best interests,” AHPRA chief Justin Untersteiner said.

“Practitioners are on notice that we will take action to protect the public.”

ATO data shows $1bn of superannuation was released on medical grounds in 2023-24 – up from $389.1m in 2018-19. And in 2023-24 more than half – or $526.4m – was released for dental care. This was also a jump from the $66.4m released in 2018-19 for the same category.

Private Healthcare Australia, the peak body representing private health insurers, has called for greater regulation amid concerns predatory practices were driving up costs for all Australians.

Chief Executive Officer Rachel David said it was also extremely concerning that doctors and dentists with a “financial interest in offering some expensive procedures might be helping people tap into their superannuation so they can hand over large amounts of money for that work to be done”.

“I also wonder if these people are being informed of other more affordable options for care, and how they can access them,” she said.

“It’s a conflict of interest that warrants urgent further investigation.”

Despite the rising number of complaints, the ATO maintained it would continue to “place reliance on the ethics of health professionals to provide accurate reports”.

Dr Jim Chalmers. Picture: Martin Ollman

Federal Treasurer Jim Chalmers’ office, when asked if he would consider asking the ATO to tighten regulation of the scheme, directed this masthead to Assistant Treasurer Daniel Mulino’s office.

Mr Mulino’s office in turn declined to comment as it had not yet been briefed.

Federal Health Minister Mark Butler was approached for comment but a Department of Health spokesman responded on his behalf, saying that those considering access to this scheme should consult a financial adviser or the ATO before withdrawing their super.

Howie Vandyke, who is 57 years old and lives in Brisbane, first used $22,000 of his super for lifesaving bariatric surgery in 2022, describing his surgeons at the Wesley Hospital as “extremely professional and quick”.

But he has also come across predatory use of the scheme, with a dental clinic recently probing his super balance before pricing his treatment within a $1000 of what he had available.

“They’re actually really wanting to extract as much money out of your super account as they possibly can,” he said.

“I think [the scheme] is being well and truly abused.”

Originally published as Aussies raid $1bn in super for ‘extravagant, unnecessary’ medical procedures