Compassionate release warning issued

The ATO has warned consumers, financial advisers and health practitioners it is aware of dishonest practices being used to access superannuation early for non-critical medical procedures.

.

ATO deputy commissioner Emma Rosenzweig issued the warning after the regulator noted concerning behaviour from advice and health practitioners related to early access.

“We have seen an increase in dodgy advice and misconceptions around when individuals can access their super early, and we want to make it clear that Australians should not be considering early access unless they are eligible and it is absolutely necessary for their circumstances,” Rosenzweig noted in an update on the ATO’s website.

 

“Access to super on compassionate grounds is available in very limited circumstances for critical medical procedures and should only be considered as a last resort where all other options of paying for the eligible expenses have been exhausted.”

She added the ATO had been notified some health practitioners were helping patients access their superannuation on compassionate grounds via the production of medical reports that were inaccurate so they could access funds, when they were ineligible, for procedures such as cosmetic surgery.

The ATO pointed out it was also aware reports had been prepared where the practitioner had not performed a comprehensive examination of the patient.

Further the regulator found profits were being emphasised over patient care through the recommendation of higher-cost treatments, premium pricing or over-servicing without providing information on all options.

In addition, it was discovered unqualified advice around accessing super to pay for treatments was being provided, with some health practitioners using patients’ myGov details to submit applications when individuals are required to do this themselves.

Some health practitioners were found to be charging fees to assist patients submit applications without being a registered tax agent as well and advising them to access super without holding an Australian financial services licence.

Rosenzweig confirmed the ATO was working with other regulators, including the Australian Health Practitioner Regulation Agency, to address any inappropriate behaviour, but early access was still viewed as a breach of super rules by the fund member.

“Where a third party acts inappropriately on an individual’s behalf, the individual can still be liable for any consequences, including penalties for making a false or misleading statement,” she stipulated.

ATO figures released in October last year showed there was around a 20 per cent increase in requests for the early release of superannuation savings on compassionate grounds in the previous financial year, with more than half related to dental and weight-loss treatments and for which $776.9 million was released during 2023/24.

 

 

 

 

August 26, 2025
Jason Spits
smsmagazine.com.au

More Articles

The evolution of the world’s languages

Check out the evolution of the world's most spoken languages from 2500 BC to...

Read full article

Adequate retirement savings misjudged

Association of Superannuation Funds of Australia (ASFA) research has shown individuals across the country are...

Read full article

Record SMSF growth driven by digital access

Record SMSF growth driven by AI and digital tools, but admin and compliance challenges...

Read full article

The SBSCH will close from 1 July 2026

The ATO is warning employers not to use the small business super clearing house (SBSCH) for any further...

Read full article

Rules apply to gifting in superannuation

Australia’s age pension gifting rules are again under scrutiny as advisers warn that retirees are...

Read full article

Complications of maintaining two cost bases in Div 296

According to BT technical consultant Matt Manning, the Division 296 cost base reset requires SMSFs to maintain...

Read full article

investment and economic outlook 2026

Our latest forecasts for investment returns and region-by-region economic outlook   . Economic...

Read full article

What the Payday Super changes mean for your retirement

Significant reforms to the Australian superannuation system are about to take effect and could help people...

Read full article

Heathmont Financial Services Pty Ltd (ABN 68 106 250 104) trading as Heathmont Financial Services is a Corporate Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd (ABN 74 630 256 227), Australian Financial Services Licence Number (AFSL) 513763.

Julian McGoldrick is an Authorised Representative (No. 262098) of Knox Wealth Management Pty Ltd AFSL 513763.

Financial Services Guide - Disclaimer & Privacy Policy

^