The ATO is targeting super dental extractions
By Vanguard
Super and retirement
The number of applications to access super for medical treatments has surged
You may have heard or read ads from some dental service providers asserting that you can access your superannuation to pay for dental procedures.
It may sound like a great idea to some people, but don’t smile too soon. The Australian Taxation Office (ATO) is watching this increasing practice very closely.
The tax regulator and the Australian Health Practitioner Regulation Agency (Ahpra) are baring their teeth in a bid to stamp out business models and inappropriate practices that promote the use of super to pay for overly expensive or unnecessary medical treatments.
The ATO recently released new data showing that the number of applications by individuals to access their super on compassionate grounds, particularly for dental services, has more than doubled in the last two years.
ATO Deputy Commissioner Emma Rosenzweig said the ATO is concerned that some health practitioners and registered tax agents are inappropriately supporting individuals to access their superannuation on compassionate grounds, particularly for cosmetic procedures that aren’t aligned to compassionate release requirements.
“We are seeing practitioners making inaccurate statements in medical reports.”
Strict rules on early withdrawals
There are very strict rules in place under superannuation legislation around the circumstances that allow individuals to apply to gain access to their super before they have met a condition of release, such as retiring after reaching the age of 60.
To gain approval for the early release of super, medical treatments need to be certified by two practitioners as necessary to alleviate acute or chronic pain, to treat a life-threatening illness or injury, or alleviate acute or chronic mental illness.
“While superannuation can be accessed early under compassionate grounds, this is strictly available in very limited circumstances including for critical medical and dental procedures,” Deputy Commissioner Rosenzweig said.
“I want to make it clear, compassionate release of super should only be considered as a last resort, where all other options of paying for the eligible expenses have been exhausted.”
New guidance released
Ahpra and the Dental and Medical Boards of Australia have released new guidance for doctors and dentists in response to ongoing concerns of inappropriate conduct.
The guidance reiterates that any treatments recommended by practitioners should only be certified if they are necessary.
It also includes a warning for practitioners that providing financial advice without a licence could also result in severe penalties from Australian Securities & Investment Commission (ASIC).
In 2024-25, a significant portion of the $1.4 billion in super that was released early on compassionate grounds was for medical treatment, the category used by the ATO that includes dental, IVF and weight loss treatment. This compared with $472.4 million in 2020-21.
There were 93,500 applications in this category, the majority in relation to dental services, and 30% of those were rejected by the ATO for not meeting their requirements for compassionate release.
“We are seeing practitioners making inaccurate statements in medical reports. The ATO relies on medical and dental professionals to act in the best interests of their patients to prepare accurate reports regarding their diagnoses and the required treatment strategy,” Deputy Commissioner Rosenzweig said.
Penalties apply to individuals, health practitioners or registered tax agents who help to prepare or submit early super withdrawal applications for health treatments that are not necessary.