Penalties exceeded $1.5 million after 160 reviews and audits
New Australian Taxation Office data shows applications approved for compassionate release of super decreased by 5%, even though the total value approved increased by 2% to over $1.4 billion.
Ben Kelly, the ATO’s deputy commissioner, said the latest data was promising. However, he said the agency remained concerned that health practitioners and third-party facilitators continue to utilise predatory practices to get individuals to inappropriately access their super for financial gain.
Kelly said: “Australians need to remember that super is there to set you up for retirement and there are strict and limited situations where people need to access their super early to pay for critical medical procedures.”
He added: “Our message to individuals and medical practitioners is 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.”
Meanwhile, the ATO has been working with the Australian Health Practitioner Regulation Agency, or Ahpra, to ensure applications to pay for health-related expenses are appropriate and do not take advantage of vulnerable people.
Justin Untersteiner, Ahpra’s chief executive, said registered health practitioners should never put profits ahead of patients.
He said: “We are concerned by predatory sales tactics that use social media and internet advertising to attract patients for high-cost treatments they do not need or cannot afford,”
It is important that individuals understand the immediate tax consequences of accessing their super early.
Approved amounts withdrawn may be taxable and increase reportable income, which could affect eligibility for government payments such as the Family Tax Benefit.
Application volumes have declined from last year’s figures. Still, the total value approved has increased by 2% to over $1.4 billion.
Separately, the ATO continues to crack down on health practitioners and third-party facilitators, including dentists, who encourage individuals to inappropriately access their superannuation to fund cosmetic dental procedures.
Kelly said: “A concerning trend we’re seeing are business arrangements that target and pressure people to access their super to pay for certain procedures,”
He said: “These arrangements include short online consultations and the use of templates designed to streamline the process for people to access their super.”
Kelly also said: “People should be very cautious of advertisements that promote early access to super. Taking the time to understand the risks and notice the red flags can help avoid decisions that could significantly impact your retirement savings or result in penalties.”
Penalty case for medical report
This year, the ATO ramped up its compliance activities, targeting individuals, health practitioners and third-party facilitators who promote these schemes.
Since 1 July 2025, the ATO has commenced over 160 reviews and audits where it considers false or misleading statements have been made in applications or medical reports, imposing penalties of over $1.5 million.
Kelly said: “We believe the decline in applications shows our compliance actions are having an impact. Our message is being heard – we will actively hold all individuals and businesses involved in these arrangements to account and deter those who seek to exploit the system,”
He added: “We will continue to take strong action against third party facilitators who seek to exploit or undermine the system, protecting its integrity for those who need it most.”
Where Ahpra has evidence of practitioners providing fraudulent or misleading information to the ATO, the individuals may be referred to the relevant tribunal for alleged professional misconduct.
That has already resulted in a practitioner having their registration suspended in relation to a patient’s cosmetic surgery, while other practitioners are the subject of ongoing tribunal proceedings.
Untersteiner said Ahpra continues to receive notifications raising concerns about practitioners involved in the early release of superannuation. In addition, Ahpra proactively monitors practitioners to ensure they are meeting their professional obligations.
He said: “Practitioners should know that putting profits before patients is not only unsafe – it could cost them their right to practise,”
Untersteiner added: “Most practitioners do the right thing, and we welcome any signs that inappropriate use of superannuation is decreasing.”
Ahpra and the National Boards have issued compassionate release of superannuation guidance for practitioners. Consumer resources have been developed by the Dental Board of Australia.
More recently, Ahpra and the National Boards have issued conflict of interest guidance.
The release includes a case study titled “penalties for medical practitioner”. In it, the ATO imposed an administrative penalty around $30,000 on a health practitioner for making false or misleading statements in a medical report that was used to certify a compassionate release of superannuation application.
The health practitioner completed and signed a medical report supporting a patient’s application for early release of superannuation on compassionate grounds.
During an ATO compliance audit, it was revealed the clinical information and other supporting records were false and misleading.
A number of statements in the report were found to be inaccurate, including the classification of the patient’s condition and information used to establish eligibility for compassionate release.
The ATO encourages anyone who is aware of inappropriate practices such as social media advertising leading to inappropriate early access of superannuation, or health practitioners providing inaccurate medical reports, to make a tip off or a voluntary disclosure to the ATO.
Concerns about a registered health practitioner’s conduct or professional performance can be reported to Ahpra.
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