Record $1.46b super withdrawn for medical costs, regulators Target 'predatory' practitioners

ATO and AHPRA crack down on early release schemes as patients tap retirement savings to fund dental work and procedures

By LineZotpaper

Published22 October 2026

Read Time3 min

Sources2 outlets

Australians withdrew a record $1.46 billion from their superannuation on compassionate grounds in the 2025-26 financial year, with the vast majority ($1.42 billion) spent on medical and dental treatments. The surge, a 220 per cent increase since 2018-19, has drawn sharp concern from regulators, who are cracking down on health practitioners they accuse of using predatory sales tactics to encourage patients to raid their retirement savings for unnecessary or cosmetic procedures.

Dental work accounted for the lion's share of withdrawals, with $892 million accessed for dental treatment. This represents a thirteen-fold increase from the $66 million approved for dental release in 2018-19.

Consumers Health Forum CEO Elizabeth Deveny said the trend reflected a health care system that had become increasingly unaffordable. "When people are hit with a health bill on top of the cost-of-living crisis, it's understandable people reach for the only tools available to them," Dr Deveny said. "Increasing numbers of Australians are having to choose between living in pain now or being poor in retirement."

The Australian Tax Office and the Australian Health Practitioner Regulation Agency (AHPRA) are investigating a "concerning trend" of health professionals, including dentists, promoting early access to super. AHPRA CEO Justin Untersteiner said the bodies 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."

The ATO has ramped up compliance, fining practitioners a total of $1.5 million for making misleading statements to help patients access their super. One doctor was referred to a tribunal after helping a patient access almost $20,000 of her superannuation for cosmetic liposuction.

Super Members Council CEO Misha Schubert warned of the long-term consequences, noting that withdrawing $20,000 could ultimately cost an individual $93,000 by retirement due to lost compound interest. "We're deeply concerned to see the scale of the financial damage that's being done often to very vulnerable Australians," she said. Ms Schubert called for a ban on advertising that promotes access to early super withdrawals.

Financial Services Minister and Assistant Treasurer Daniel Mulino said the government was monitoring the issue closely. "Australians should not be pressured into accessing their superannuation for unnecessary medical or dental procedures," he said.

The ATO has listed several red flags for consumers, including social media advertising for early access, requests for personal details to submit an application, and fees associated with submitting an application.

Analysis

Why This Matters

The rapid growth in compassionate super withdrawals suggests Australians are being forced to deplete their retirement savings to manage current healthcare costs, undermining the purpose of the compulsory super system.
The trend is particularly stark in dental care, a gap in Australia's public health system, exposing a structural failure in healthcare affordability.
Lawmakers face growing pressure to ban advertising for early super access and to address the underlying cost barriers driving the withdrawals.

Background

Australia's superannuation system is designed to provide income in retirement. Early release on compassionate grounds, administered by the ATO, was intended as a strict safety net for extreme circumstances like life-threatening illness. The 220 per cent surge in withdrawals since 2019, driven largely by dental and medical costs, has transformed it into a common avenue for funding healthcare, prompting concerns about the erosion of retirement savings.

Key Perspectives

Patients and Consumer Advocates (Consumers Health Forum): See the withdrawals as a rational but tragic response to an unaffordable healthcare system. Elizabeth Deveny argues people should not be blamed for using the only tool available to them. Regulators (ATO and AHPRA): Focus on the systemic integrity and the predatory conduct of some health practitioners who are actively marketing early release as a payment method for often unnecessary procedures. Superannuation Industry (Super Members Council): Warns the practice inflicts severe long-term financial damage on vulnerable Australians, costing far more in retirement than the immediate relief provides.

What to Watch

Whether the government introduces legislation to ban advertising of early super access, as advocated by the Super Members Council.
The outcome of AHPRA and ATO tribunal referrals and whether further compliance actions deter practitioners.
Broader political debate on whether the public system should expand to cover dental care, a key driver of the withdrawals.

Sources

Raiding super to pay medical bills leaves trail of 'financial damage' · Latest business news
Raiding super to pay medical bills leaves trail of 'financial damage' · Just In

Checked

11 claims in this story checked against 1 source: 8 supported.

Show each claim

Partly supportedThe headline says a record $1.46 billion was withdrawn specifically for medical costs.Latest business news: “Australians withdrew about $1.46 billion from their superannuation on compassionate grounds in 2025-26, with the vast majority of that — about $1.42 billion — used for medical costs including dental work.”
Partly supportedRegulators are cracking down on health practitioners accused of using predatory tactics to encourage withdrawals for unnecessary or cosmetic procedures.Latest business news: “The ATO has been working with the Australian Health Practitioner Regulation Agency (AHPRA) to crack down on a "concerning trend" of health practitioners, like dentists, encouraging people to withdraw their superannuation inappropriately for services, such as cosmetic dental procedures.”
SupportedDeveny said, “When people are hit with a health bill on top of the cost-of-living crisis, it's understandable people reach for the only tools available to them.”Latest business news: “"When people are hit with a health bill on top of the cost-of-living crisis, it's understandable people reach for the only tools available to them," she said.”
SupportedDeveny said, “Increasing numbers of Australians are having to choose between living in pain now or being poor in retirement.”Latest business news: “"Increasing numbers of Australians are having to choose between living in pain now or being poor in retirement."”
SupportedAHPRA CEO Justin Untersteiner said practitioners use “predatory sales tactics that use social media and internet advertising to attract patients for high-cost treatments they do not need or cannot afford.”Latest business news: “"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," AHPRA CEO Justin Untersteiner said.”
SupportedAustralians withdrew a record $1.46 billion on compassionate grounds in 2025-26, with about $1.42 billion used for medical costs.Latest business news: “Australians withdrew about $1.46 billion from their superannuation on compassionate grounds in 2025-26, with the vast majority of that — about $1.42 billion — used for medical costs including dental work.”
Partly supportedCompassionate withdrawals increased 220 per cent since 2018-19.Latest business news: “The amount of money taken from retirement nest eggs for compassionate reasons like medical treatment has skyrocketed in recent years, up about 220 per cent since 2018-19.”
SupportedDental treatment accounted for $892 million in withdrawals, a thirteen-fold increase from about $66 million in 2018-19.Latest business news: “Dental was again the most popular reason for someone to withdraw their superannuation on medical grounds, with $892 million taken out in 2025-26. That is a 13-fold increase since 2018-19, when about $66 million was approved for release.”
SupportedThe ATO fined practitioners a total of $1.5 million for misleading statements to help patients access super.Latest business news: “Over the past year, the ATO has ramped up compliance and fined practitioners a total of $1.5 million for making misleading statements so patients could secure early superannuation access.”
SupportedA doctor was referred to a tribunal after helping a patient access almost $20,000 for cosmetic liposuction.Latest business news: “A GP found to have engaged in professional misconduct while helping a patient access almost $20,000 of her superannuation for cosmetic liposuction was one of two health practitioners referred to tribunals by regulators”
SupportedSchubert said withdrawing $20,000 could cost someone $93,000 by retirement through lost compound interest.Latest business news: “Ms Schubert said Australians needed to understand the long-term impact of raiding their nest eggs, saying withdrawing $20,000 of superannuation could ultimately cost someone $93,000 by retirement because they lose the compound interest they could have earned.”