Fresh warning over 'predatory' superannuation practices

New data shows the number of applications approved for compassionate release of super has decreased by 5% over the last year.

But the ATO and Ahpra remain concerned that some health practitioners and third-party facilitators continue to utilise predatory practices to get individuals to inappropriately access their super for financial gain.

Earlier this year they warned there had been an increase in applications to access superannuation early to pay for medical and dental treatments.

The two bodies have been working together to identify concerns about inappropriate conduct and ensure applications to pay for health-related expenses are appropriate and do not take advantage of vulnerable people.

ATO Deputy Commissioner Ben Kelly said there were strict and limited situations where people need to access their super early to pay for critical medical procedures.

“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.

“A concerning trend we’re seeing are business arrangements that target and pressure people to access their super to pay for certain procedures.

“These arrangements include short online consultations and the use of templates designed to streamline the process for people to access their super.”

Since July 1 the ATO has commenced over 160 reviews where it considered false or misleading statements were made in applications or medical reports. More than $1.5 million in penalties has been handed down.  

While application volumes have declined from last year’s figures, the total value of approved super access has increased by 2% to over $1.4 billion.

“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,” Mr Kelly said.

“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.”

Ahpra CEO Justin Untersteiner said registered health practitioners should never put profits ahead of patients.

“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.”

Where Ahpra has evidence of practitioners providing fraudulent or misleading information to the ATO, those individuals may be referred to the relevant tribunal for alleged professional misconduct.

This 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.

Mr Untersteiner said Ahpra continues to receive notifications raising concerns about practitioners involved in the early release of superannuation.

“‘Practitioners should know that putting profits before patients is not only unsafe – it could cost them their right to practise,” he said.

“Most practitioners do the right thing, and we welcome any signs that inappropriate use of superannuation is decreasing.”

Ahpra has issued guidance on the compassionate release of superannuation.