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