Australians raid early-release superannuation

Australians are raiding their super in record numbers to pay for medical procedures.

Australians raid early-release super

A record number of Australians are taking advantage of the early super access scheme to raid their superannuation on compassionate grounds to pay for plastic surgery, gastric banding, IVF and other elective medical procedures.

Applications for early release of super based on compassionate grounds increased from 19,367 in 2014-15 to 29,379 in 2015-16, a 50 per cent increase on the previous year. This increase has prompted warnings for consumers to think about the long-term consequences for their retirement savings.

Applying for early release of super is free, but the application process can seem complicated to some people. In fact, several companies charge high fees to help applicants complete the paperwork and speed up the process for applications. Consumer groups are warning against using these companies.

"Any company that charges someone for early access to superannuation, completing a form that's otherwise free to do for the Department of Human Services, they're targeting people in really tough situations," said Erin Turner, campaigns manager at CHOICE.

"This is predatory behaviour."

A Wollongong woman told 7.30 that she withdrew $11,000 from her super to pay for weight-loss surgery, as she was unlikely to live to retirement without the procedure.

For medical procedures, funds can only be granted to treat life-threatening illness, or to alleviate chronic pain or a mental illness. And two doctors must sign off on the report. The super fund then has the final say on the release of money.

What do you think? Should there be tighter regulations around the early release of super for elective medical procedures?

Read more at abc.net.au
Read more at thenewdaily.com.au

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    COMMENTS

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    dick
    1st Aug 2017
    11:35am
    This is absolutely outrageous ! Super is for future retirement income !
    People raiding their super in this way only adds to the burden of funding aged pensions to the detriment of the elderly.
    The Govt needs to tighten this up now!
    KSS
    1st Aug 2017
    12:29pm
    I agree dick.
    Pablo
    1st Aug 2017
    3:33pm
    Agree 110% Dick. Superannuation should always be for living in retirement.
    Anonymous
    2nd Aug 2017
    8:38am
    We can't expect people to keep super for retirement and to build their retirement nest egg if the government keeps changing the rules so they have no certainty. The recent assets test change was a classic example of a stupid move that will drive tens of thousands to reduce their super savings, and draw early if they can. You have people saving for decades to achieve a given living standard in retirement and then suddenly they are up to $20K a year worse off for having done so, and spending $100K might net them $180K in extra pension over 10 years. And the only winners were not the needy - but pensioners who had $300K to $500K in savings and have higher incomes, thanks to pensions and benefits, than those who were slugged. Why would people bother to save when they see that it can result in a huge loss?

    The government needs to recognize the need for consistency and to offer people security over their retirement plans if they want to stop frivolous withdrawals. People need certainty that their efforts will be rewarded and that the government won't suddenly pull the rug from under them. It's that simple!
    ex PS
    3rd Aug 2017
    9:42am
    I agree with Rainey, the government has destroyed any trust between Super contributors and Super with its constant changes and threats to retiree confidence by floating stupid ideas like stealing balances instead of letting us leave them to our kids, further Means Testing of the family home and the taking away of the ability to take out lump sums.
    Why would anyone want to continue to invest in a fund which is having their control over that money slowly whitled away?

    This government seems intent on wrecking the Super System, maybe it feels people are easier to control if they are living in poverty.
    Anonymous
    3rd Aug 2017
    2:49pm
    You got it in one, ex PS. It's about control. The government wants control over the majority of the populace so it can't be stopped from pursuing corrupt and unfair policies that benefit politicians and their rich mates and hurt the majority. Poor people are always easier to control - especially if they depend on pensions and benefits. That's why our pension system has been deliberately constructed to suppress and punish - to keep people down! When they are desperate for next week's pension cheque to put food on the table, they simply don't have time or energy to protest, no matter how badly the government is performing.
    Cheezil61
    5th Aug 2017
    7:59am
    Rainey & exPS hit the nail on the head for me, not that I'd expect to draw on my own super early for health reasons (unless they were genuine & seriously expensive & I if I cannot afford treatment otherwise)!

    However I am of course keen to access it as soon as I can (next year at 57 if I want to be taxed severely but 60 otherwise) ONLY BECAUSE I SEE MYSELF BEING ROBBED BY ALL OF THE ABOVE MENTIONED LEGALIZED THIEVES IF I DON"T ACCESS IT ASAP!! The longer I leave it the more chance that there will be more changes that make it impossible to get at it ourselves anyway (pretty sure I will die before I can get it as it is anyway, working my arse off night & day to make ends meet at 56 is not fun!)

    The idea of super is not to make the wealthy wealthier, although the wealthy seem to think so!

    The super system is f*kt
    Cheezil61
    5th Aug 2017
    7:59am
    Rainey & exPS hit the nail on the head for me, not that I'd expect to draw on my own super early for health reasons (unless they were genuine & seriously expensive & I if I cannot afford treatment otherwise)!

    However I am of course keen to access it as soon as I can (next year at 57 if I want to be taxed severely but 60 otherwise) ONLY BECAUSE I SEE MYSELF BEING ROBBED BY ALL OF THE ABOVE MENTIONED LEGALIZED THIEVES IF I DON"T ACCESS IT ASAP!! The longer I leave it the more chance that there will be more changes that make it impossible to get at it ourselves anyway (pretty sure I will die before I can get it as it is anyway, working my arse off night & day to make ends meet at 56 is not fun!)

    The idea of super is not to make the wealthy wealthier, although the wealthy seem to think so!

    The super system is f*kt
    Tib
    1st Aug 2017
    11:54am
    I guess some people will have to work until they are very old.
    KSS
    1st Aug 2017
    12:34pm
    That's just it Tib, they won't. In all likelihood they will get on the aged pension as soon as they can (or better yet the NDIS) and the taxpayers will continue to fork out because the oldies will see it as their 'entitlement' and justify it with their sorry tales of woe!
    Rosret
    1st Aug 2017
    1:14pm
    mmm You get taxed for early withdrawal. It would have to be for medical services to improve life expectancy and ability to contribute to the workforce one would imagine.

    1st Aug 2017
    1:15pm
    Haha
    The leaners will alsways find ways to rort the system
    KB
    1st Aug 2017
    1:46pm
    Only should be for essential life saving operations or if you are battling cancer.Treatments for cancer must be costly. Also the other issue is women who have super and need to access money to set themselves up, Medicacre should be paying more for medical costs and health insurance companies should be more affordable so people can access life saving operations in order not touch super and then end up relying on the aged pension.
    KB
    1st Aug 2017
    1:46pm
    Only should be for essential life saving operations or if you are battling cancer.Treatments for cancer must be costly. Also the other issue is women who have super and need to access money to set themselves up, Medicacre should be paying more for medical costs and health insurance companies should be more affordable so people can access life saving operations in order not touch super and then end up relying on the aged pension.
    Rod63
    1st Aug 2017
    5:16pm
    So you said, KB.
    Hasbeen
    1st Aug 2017
    1:48pm
    Go for it. It is their money.

    Much better they enjoy it while they can, than have some super fund whittle it away with charges, or have it snaffled up by a nursing home.
    Anonymous
    1st Aug 2017
    1:50pm
    Spoken like to true welfare leaner
    dick
    1st Aug 2017
    2:22pm
    Wrong Hasbeen.. it is not their money until they retire. It is not a bank account
    Unfortunately you have little or no understanding of the Super system and how and why it was set up and the preferential tax treatment it gets whilst funds are locked away until retirement.
    If you read about the performance and regulation of Super you will see that if your charges are whittling away your Super funds you should change funds as funds performances have been really good over the past few years.
    Old Geezer
    1st Aug 2017
    2:31pm
    People with small balances in even the best preforming funds are having their super whittled away.

    I recently helped a couple of kids get their super out of the two top performing industry funds as their balance was less than $200 and it would have been zero in about 3-4 months.

    What is needed is a no fee account so these kids can leave their money in super without it all going in fees.
    Anonymous
    1st Aug 2017
    3:11pm
    I disagree OG, if a balance is less than $1000, the fees cannot exceed the amount of interest on the investment.
    Old Geezer
    1st Aug 2017
    3:38pm
    Old Man That has been changed by the government in 2013 from memory. Now they just take until there is nothing left.
    Anonymous
    2nd Aug 2017
    8:25am
    That happened to my partner. He lost thousands because employer contributions were less than the charges. It has changed. I was employing people in a business 10 years ago and used a super fund that guaranteed a net return even on the smallest balance and did not charge fees of more than 5% of any contribution or an annual total of more than 5% of the average balance for the year. The government did implement protection for small account holders. However, those with less than $200 can legally withdraw their balance if they cease the employment.

    BTW. Nobody needs help to withdraw less than $200 OG. Anything under $200 can be withdrawn on ceasing the employment and the employer is required to tell the employee how to withdraw.
    Hawkeye
    1st Aug 2017
    1:53pm
    Sorry folks, but I can't see how accessing some of your own savings to enable something like life-saving surgery can possibly be "outrageous" or "to the detriment of the elderly" or "ways to rort the system"
    Some people are just so "up themselves" because they are lucky enough to be healthy.
    dick
    1st Aug 2017
    2:16pm
    Wrong Hawkeye.. it is not their own savings... it is Superannuation which gets preferential tax treatment to encourage saving for retirement. The earnings in the Super Fund also receive preferential treatment because the Super will not (should not) be accessed until retirement age.
    Being "up themselves" is nothing to do with the Super system !
    dick
    1st Aug 2017
    2:16pm
    Wrong Hawkeye.. it is not their own savings... it is Superannuation which gets preferential tax treatment to encourage saving for retirement. The earnings in the Super Fund also receive preferential treatment because the Super will not (should not) be accessed until retirement age.
    Being "up themselves" is nothing to do with the Super system !
    Old Geezer
    1st Aug 2017
    7:33pm
    It is their money but not yet according to the tax office.
    niemakawa
    1st Aug 2017
    2:03pm
    More losers raiding the kitty. Cosmetic surgery my ....! Tell them to mortgage the house that's what the Government wants aged pensioners to do. If they do not have a house then take out a personal loan. All else fails forget it.
    Old Geezer
    1st Aug 2017
    2:50pm
    How would you like to be that bloke who has just been told he is too fat to get a job? Good on him if he wants to use his super so that he can live a normal life.
    niemakawa
    1st Aug 2017
    3:47pm
    OG obesity is 99.9% self-inflicted. Let him or others like him suffer the consequences.
    Old Geezer
    1st Aug 2017
    7:28pm
    Obesity is like debt it's a result of the drug like message of advertising has on our society.
    Anonymous
    2nd Aug 2017
    8:27am
    You slander and bully pensioners who fell on hard times, OG, but now you are defending a glutton who can't control his eating habits and condoning him making premature super drawings. You are a total hypocrite! You have zero integrity and no convictions whatever.
    Old Geezer
    3rd Aug 2017
    2:17pm
    As super is your money I can't see a problem for someone who is obese because they can't control their eating habits accessing it to help fix their problem as without it they won't live long enough to use it.

    I have no problem with pensioners who fall on hard times and get the full old age pension. But many don't but instead use somewhat dubious methods to hide their wealth just to get the OAP. These are the ones I have big problems with.

    1st Aug 2017
    3:13pm
    The problem with the rules around accessing super is the same as the rules for politicians dipping into "entitlements". There are no rules, only guidelines.
    floss
    1st Aug 2017
    3:56pm
    My super was all ways to live on when I retired and we are glad to say we are not a burden on the public purse. After the Hockey disaster I can see why a lot of people are giving super a miss it their decision . Hockey and his mob made a blunder simple as that.
    Triss
    1st Aug 2017
    4:56pm
    I have to say, Floss, that as governments have dipped into folk's retirement savings before and shunted it into their own coffers, I'm waiting for them to do it again.There's a huge amount of money beckoning them.
    ex PS
    3rd Aug 2017
    2:30pm
    I don't trust this government, I am keeping an eye on them and as soon as they start talking about taking further control of my Super I will take the lot out, spend it and take a Pension.

    Ten years ago I would have told anyone who asked that I would never take a government pension, but things change when unscrupulous politicians try and take what is not theirs to take.
    Puglet
    1st Aug 2017
    6:25pm
    I saw the 7.30 report and have great sympathy for some but not all. One grossly overweight woman with diabetes had gastric banding and has lost an enormous weight. Her blood sugars are normal and she is very fit and happy. She is probably right, without surgery she'd be on the disability pension, be unemployable, cost taxpayers lots in medical care,and die before she is 40. She didn't have to go a long waiting list either. She now wants more money for plastic surgery to remove unsightly loose skin. Another young woman wants early super so she can have IVF. Neither of the last two are 'life-threatening'. I know of one family where the dad died of cancer at about 45. The mother soon developed the same cancer and was also close to death. The youngest child was 8. Their mum took some of her super early so she could stop work, pay her medical billls, be with her children and at home for the final round of chemo. She too died within a year.
    LiveItUp
    2nd Aug 2017
    8:17am
    I know of one young man who died at 31 due to excessive weight so being obese can be life threatening.threatening. Obesity is just as bad as cancer. What about tne young woman who needs IVF but can't afford it? Do we deny her this right and depression leads to her taking her own life? Super is useless if you never reach old age.
    floss
    1st Aug 2017
    7:18pm
    Retirement was once a simple affair now its a B..... night mare the rules keep changing . Once the government start gran fathering the rules is it safe to put money into super. Investing for retirement is risky enough with out rule changes half way a long.
    Old Geezer
    1st Aug 2017
    7:27pm
    Change is a fact of life so you should be used to it by now. All you need to do is be flexible enough some change becomes an asset not a liability.
    Anonymous
    2nd Aug 2017
    8:30am
    If the government wants people to save for retirement, they need to be consistent and provide certainty. Change is NOT acceptable when it destroys carefully laid plans and therefore destroys a lifestyle people worked and saved for decades to enjoy. It's NOT acceptable to have older folk feeling insecure, frightened, or uncared for.
    Change that causes stress is UNACCEPTABLE.
    OG, flexibility is the province of the privileged. It's NOT something the average working class battler can achieve. Put a sock in it. Your comments and insulting and unhelpful.
    ex PS
    3rd Aug 2017
    9:45am
    What Rainey said! Can't improve on that. Change and flexibility, I have heard these terms often in business, usually just before loyal employees are left without jobs.
    Old Geezer
    3rd Aug 2017
    2:06pm
    Rainey if your plans are so inflexible you can't change them then you are simply doing yourself a disservice. Change happens so plan for it. If change causes stress then so be it as that's life.
    ex PS
    3rd Aug 2017
    2:25pm
    Not all change is good, change for changes sake can be counter productive. If we must change it should be for the better.

    O.G, can you explain how destabilizing an investment scheme and turning more people into government dependent Pensioners is a change for the good?
    They are entitled to a Pension as a right, but why would a government deliberately make this option easier than providing for ones self?

    As my moniker implies I have spent some time in government employment and have seen many examples of managers coming in and making major changes in order to establish themselves. In most cases the changes made little difference to efficiency and in some they were retrogressive, as i stated some change is good, but not all changes result in positive outcomes.
    floss
    2nd Aug 2017
    10:11am
    Good one Rainey and you are a good judge of people.
    *Loloften*
    3rd Aug 2017
    4:47am
    After being diagnosed with terminal cancer (given 12mths to live when long term spouse insisted on knowing), we very happily both stopped working & easily withdrew many $10,000s from both our Supers to pay for all not covered by either Medicare nor our Private Heath Insurance costs, including 5 major operations & continuing Radio/Chemotherapies/Specialists/many tests etc etc. During the "in-between" rare reasonably well times over the next 7yrs that we very gratefully shared together, we continued to withdraw heaps from our Supers to pay for my spouse's bucket list wishes which were almost all fulfilled & I'm sure ensured my loved one's prolonged life...well past what was predicted & an enormous pleasure to both us, our families & Chief Oncologist. Yes, I'm now on a full age pension with limited resources + our home but all the travels etc were a wonderful blessing which we both enjoyed enormously.....don't think we would've if didn't have the funds easily available. How much is 6 extra yrs of life worth??
    Blossom
    8th Aug 2017
    3:07pm
    I know a guy who is self-employed, who had to plead for some money out of his super, to keep his home and one business vehicle. he had $$$ thousands owing to him from two jobs he was pursuing, a prior injury for which he needed surgery, a house mortgate, and a loan on his vehicle. Umpteen applications completed, weeks after the last form they finally obliged and released some funds to him. Yet, other people manage to get funds out quickly for less important things (I am not referring to necessary medical treatment.
    Margaretha
    9th Jan 2018
    12:54pm
    People from 50 onwards who have No house should be able to access THEIR super to at least have a roof over their Head
    Instead of making the superannuation companies rich