Women encouraged to use superannuation to plug gaps in the public health system

In 2024-25, $1.4 billion was released early from Australian superannuation accounts for compassionate reasons.

The Australian Government’s compassionate release of superannuation scheme, managed by the Australian Taxation Office (ATO), currently acts as a safety net for those on lower incomes who need financial assistance prior to retirement. Almost all applications for early release of super are made on medical grounds, and more than half of applicants are women.

Despite a persistent retirement gender gap of approximately $52,000, women are more likely than men to rely on their superannuation to cover essential healthcare costs prior to retirement. In 2024-25, more than 34,000 women accessed their retirement funds early, with amounts released increasing by over 200% from 2018 to 2025.

The Working with Women Alliance has released a report warning that the financial impacts of early withdrawal are significant for women; accessing superannuation for dental work could result in $50,000 less at retirement, equivalent to almost two years of income at the maximum Age Pension rate. The Super Members Council argues that taking $20,000 out of super early can leave someone $100,000 worse off at retirement.

The top three medical categories for which applications for compassionate release of super are approved are: dental, weight loss, and IVF. Each of these are areas in which women are more likely to be patients and recipients of care.

For example, women undergo weight loss surgery at rates nearly four times higher than men, despite similar obesity prevalence between sexes. This disparity reflects deeply rooted societal pressures on women to adhere to narrow beauty standards that emphasise an ‘ideal’ body shape, which heightens body dissatisfaction and drives greater uptake of costly procedures compared to men. Most bariatric surgeries are privately funded, prompting women to use their superannuation, and exposing them to long-term financial harm from depleted retirement savings.

Women also make up more than half of oral surgery patients, and are more likely than men to have decayed, missing or filled teeth – sometimes because of domestic and family violence.

The process of accessing super early is often made faster and easier by expensive, and sometimes dodgy, third-party intermediaries that fill out paperwork on behalf of patients. Third-party intermediaries that assist with compassionate release applications promise streamlined access to super balances in 5 simple steps or with fast approval times, often partnering with clinics to advertise as preferred providers.

Fees for application assistance from intermediaries are often hidden but can be up to $1000. These firms make great efforts to appeal to those most in need by claiming high success rates while omitting costs from main webpages, operating with significant ambiguity.

There is an alarming amount of online advertising aimed at luring Australians into withdrawing their superannuation for medical treatments, especially by medical practices and third-party intermediaries assisting with applications.

Current guidelines from the Australian Health Practitioner Regulation Agency (AHPRA) require health practitioners to avoid false or misleading claims and prohibit advertising that encourages unnecessary treatments. However, these standards do not address the risks of exploitation of vulnerable people, especially women on lower incomes, by normalising the use of super for costly medical procedures.

Advertisements that emphasise time-limited offers with phrases like don’t delay or don’t miss out, while not unlawful, prey on the urgency felt by people facing serious health issues, without providing adequate warning about the long-term financial consequences of early super withdrawal.

Further, many of these campaigns use direct marketing methods based on personal data and past search behaviour, a practice that is predatory, unfair, and exploitative of the current gaps in privacy and consumer protection laws.

Since 2019, almost 100 complaints have been made to AHPRA about health practitioners involved in patients accessing their superannuation early to fund treatments.

This week, the ATO and AHPRA put out a statement warning Australians to be wary when considering applying for compassionate release of superannuation to pay for medical treatments like dental care. ATO Deputy Commissioner Ben Kelly said some practitioners were using “predatory practices” to inappropriately access super early.

Following complaints to AHPRA, two doctors have been referred to tribunals for alleged professional misconduct, and one dentist had conditions imposed on their registration, and one doctor received a formal caution. Further regulation and monitoring of predatory behaviour on the part of practitioners and third-party intermediaries is welcome, but more needs to be done to make sure women are not left to choose between poverty at retirement and addressing their healthcare needs now.

While the superannuation system was established as a financial safety net for retirement, it should not operate as a safety net for gaps in our public health system. In the last year, more than $816 million of superannuation assets were accessed prior to retirement to pay for dental care alone.

Women are already penalised across their working lives through lower wages, unpaid caring labour, insecure work, and interrupted careers. Encouraging or normalising early access to superannuation to cover health costs compounds that inequality, quietly shifting responsibility for underfunded public systems onto individuals least able to absorb the loss. The result is a transfer of risk from government to women, with lifelong consequences.

This is not a problem that can be fixed solely through tighter regulation of advertising or better enforcement of professional standards — although both are necessary. It requires governments to address the root cause: the ongoing exclusion of critical health services, including dental, from universal public provision. Until that happens, superannuation will continue to be used as a pressure valve for a health system that does not meet people’s needs, and women will continue to pay the price.