Approved applications fell 5%, but releases topped $1.4 billion
Approved compassionate release applications fell 5% last year, but the amount of super approved for release still rose 2% to more than $1.4 billion.
Against that trend, the Super Members Council has stepped up its call for a ban on predatory advertising that encourages early super withdrawals for non-essential medical and dental services.
Two major regulators have warned that businesses are still targeting Australians and trying to profit from vulnerable people draining their retirement savings.
The Australian Taxation Office said it has commenced more than 160 reviews and audits since 1 July 2025 into potentially false or misleading statements in compassionate release applications or medical reports. The ATO has also imposed more than $1.5 million in penalties.
Compassionate early access to super is designed to be a last-resort safety net for people facing critical, urgent or life-threatening medical needs. It is not designed to fund elective or non-essential procedures.
ATO and AHPRA warn on red flags
The ATO and the Australian Health Practitioner Regulation Agency issued a fresh warning about predatory sales tactics. They identified social media and internet advertising of high-cost treatments, business arrangements that pressure people to access their super, short online consultations and templates designed to streamline applications as red flags.
Super Members Council chief executive Misha Schubert said, “The scale of continuing financial harm being inflicted on vulnerable Australians by predatory advertisements promoting these services should be a wake-up call to lawmakers,”
She said Parliament should urgently ban predatory ads promoting early withdrawal of super for non-essential treatments and stop third parties from taking a cut of a person’s super to fill out the forms.
Ms Schubert said the regulators’ warnings were welcome and reinforced an urgent need to shut down predatory business models built around encouraging Australians to raid their retirement savings.
She also said, “Businesses should not be allowed to profit from pushing vulnerable Australians into withdrawing their retirement savings early to fund non-essential dental and medical treatments,”
The council renewed its call for stronger consumer protections around compassionate release of super. Those measures include banning advertising that promotes early access to super for non-essential medical or dental treatments, banning third parties from charging consumers fees simply to facilitate or fill out compassionate release applications. Stronger, clearer warnings about the long-term impact of early withdrawals on retirement savings.
Withdrawing super early can cost workers tens of thousands of dollars by retirement. It can also increase financial stress, seriously erode retirement income and place more pressure on the Age Pension.
Super Members Council analysis shows someone who withdraws $20,000 from their super at 30 for a non-essential dental or medical procedure could be $93,000 poorer at retirement due to lost compound returns.
