Aussies raiding superannuation early

Font Size:

Recently released government data has revealed a rapid increase in the number of Australians dipping into superannuation early to pay for medical bills, mainly for weight-loss surgery.

The data revealed that last year more than 15,000 people accessed over $200 million from superannuation to fund medical bills. Over the past six years, there has been a five-fold increase in applications for early super release on medical grounds, drawing criticism from the peak body for doctors.

“We don’t oppose regulations that allow the early release of superannuation on medical grounds under compassionate circumstances, but we don’t think superannuation is the appropriate safety net to subsidise inadequate health funding,” said Australian Medical Association President Michael Gannon.

In other figures, the Financial Planning Association of Australia estimates a person in their 40s accessing $10,000 today would forfeit $42,000 in retirement savings over 20 years. A  person in their 30s accessing $10,000 today would reduce their retirement savings by about $180,000, the association said.

The Federal Government has already ordered Treasury to reconsider early release of superannuation rules and report back by March 2018.

“The current rules governing early release of superannuation on financial hardship and compassionate grounds have not changed substantially in the last 20 years,” the Minister for Revenue and Financial Services, Kelly O’Dwyer, told The Australian.

“For this reason, the Government has announced it will review these rules to ensure they are fit for purpose and strike an appropriate balance between protecting people’s retirement savings and giving a lifeline to those facing genuine hardship, whilst ensuring the rules can be administered fairly and effectively,” she said.

What do you think? Should stricter early release of superannuation rules be introduced?

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

Australians raid early-release superannuation

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

Aussies accessing super early

The rate of approval for early access to superannuation is increasing.

Illegal super access

Be careful as some superannuation early access schemes are illegal.

Written by Drew

Starting out as a week of work experience in 2005 while studying his Bachelor of Business at Swinburne University, Drew has never left his post and has been with the company ever since, working on the websites digital needs. Drew has a passion for all things technology which is only rivalled for his love of all things sport (watching, not playing).
Contact:
LinkedIn
Email

105 Comments

Total Comments: 105
  1. 0
    0

    Weight loss surgery, jeez, how about eating less and doing some exercise which doesn’t include chewing muscles.

  2. 0
    0

    Quite a few people take their super earlier than planned for fears that they may have to take it out as an annuity later on, thus cancelling their Age Pension altogether when annuity money becomes income. Govt. policy changes are a good reason for grabbing the goodies early.

    • 0
      0

      Agreed. Just look at what they’re trying to do to industry funds. Give them credit for good management and leave them alone.

    • 0
      0

      I told them people would start drawing big lumps of super and saving less in response to the stupidly changed assets test. The idiots in power can’t do math! People are taking money out because having it in means forfeiting pension entitlement and in many cases having far less income than pensioners. Sure, they can draw their savings, but that’s NOT what they saved for. Might as well pull it out and enjoy some benefit, rather than watching it trickle away to pay more to people who have more but manipulated more successfully.

    • 0
      0

      “Math”, Rainey? Are you a Yank? It’s mathS, or ‘mathematics’. But actually you should be calling it arithmetic.

    • 0
      0

      Well, pardon me, Knows-a-lot. I did do my limited years of high school education in the US as it happens.

    • 0
      0

      No, I won’t pardon you. This is Australia. Speak and write Australian English. Better yet, inflict yourself again on the Yanks.

    • 0
      0

      Seems you get some sort of kick out of being nasty and insulting, Knows-a-lot. I said I had limited high school education. I do the best I can and I work hard constantly to improve. I’ve taught myself a great deal. Most who were privileged to have educational opportunity treat me with respect and courtesy. But then, most educated people seem to have more productive things to do with their time than abuse others.

  3. 0
    0

    As usual, addressing the symptoms and not the cause. Could it be that this problem is due to financial mismanagement on the parts of both the government and the people?

  4. 0
    0

    Super is no good to one if one doesn’t live to retirement age so why not allow them to use their super for a better life.

    • 0
      0

      You could say the same for insurance. A car insurance is no good if you never get an accident. Super is meant for a better life in retirement. It should be in addition to the age pension and not replace the age pension. Only politicians have that comfort at the moment. They get the pension with no income or asset test.

    • 0
      0

      Tell that to the young bloke who died of a heart attack at 31 as he was very obese. Someone else got to enjoy his super whereas it may have saved his life if he had accessed it for medical treatment.

    • 0
      0

      BigBear. Or if he had not been so greedy and just eaten less!

  5. 0
    0

    In general, the cost of living has outstripped wage-growth, people have debt, and they need to access their superannuation NOW.

    • 0
      0

      Oh dear! A PHD and can’t manage money? I drew a minimum wage for 3/4 of my working life and paid off over $100,000 in medical bills for a special needs child, plus supported a sick spouse and put my kids through university and I managed to get to retirement age a debt fee owner of a nice home with too much assets to qualify for a pension. But maybe I was just born smart.

    • 0
      0

      Oh dear! Idiot-girl is parading her pig-ignorance magnificently! I manage my money beautifully. Despite being on a DSP and paying rent, by bank account keeps going UP.

      I suppose you want a medal for your ‘achievement’… (I actually earned three medals – a university medal, the Whyatt Medal, and a third one in Japan – something you will NEVER do, Ms Failure.)

    • 0
      0

      “But maybe I was just born smart.”

      Definitely not! Hilarious delusions of adequacy. Take yer meds and see yer shrink.

    • 0
      0

      I’m a lot smarter than you, Knows-a-lot, and it didn’t cost tens of thousands to make me that way. I am also much more well-mannered.

    • 0
      0

      Dream on, idiot. Wrong again. Rain on someone else’s parade. And get help for your bizarre delusions.

    • 0
      0

      Rainey is the absolute antithesis of the wonderful English poetess Kathleen Raine, who had grace, wit, inspiration, and high intelligence.

  6. 0
    0

    Actually, if weight loss surgery keeps the individual employable and stops further associated illnesses from obesity then it should be funded like any other procedure.
    If people don’t have to dip into their super for these procedures then that further takes the burden off the OAP cost to the government in future years.
    Keeping the nation employable is a win-win for everyone.
    Addressing the fact that there is a need for these procedures should be alarming enough to start targeting the source.
    Get the trans-fats out of take away food. Lower the sugar and salt content in pre-processed food. Target schools and teach nutrition. Stop selling junk food at sporting venues, stop feeding school children cakes and lollies as rewards and birthday treats at school. The list goes on and on.
    Don’t allow children in the libraries at break times. Take away the seats around the school. They can eat lunch in the classroom.
    Have no parking zones within 500 m of schools – buses included.
    Target restaurants – require them to ONE healthy meal for children and adults.
    It has got to the point where there doesn’t seem to be anything but fried something on the menu.

    • 0
      0

      Self-discipline when it comes to eating costs nothing. People need to educate themselves regarding diet and eat responsibly. Start by avoiding regular visits to fast-food outlets.

      “Don’t allow children in the libraries at break times.”

      I disagree completely. Kids nowadays are ignorant enough as is. They should be encouraged to visit libraries as much as possible and to read those quaint information-rich things called “books”.

    • 0
      0

      A lot of good points there Rosret 🙂 My wife and I are in the process of downsizing and in our travels to and from our new residence we have taken the lazy option of stopping off at a fast food outlet for a cuppa and a bite (sugar hit) to keep us going 😉 We have, both, never been regular fast food takeaway eaters and have been surprised to see so many parents driving into/through the outlet with kids in their car for a breakfast selection OR dropping into same outlet with kids at after school times enroute, presumably, home 🙁 The waves of obesity lapping this country and the ramifications is very soon to become a tsunami I fear.

    • 0
      0

      Except KnowsAT there are computers in the Library. They sit and sit and sit some more. They need a period of time when they are not reading or in front of a computer screen. School students spend lots of time during class time in the library.

    • 0
      0

      It’s unfortunate that fattening fast food has been with us for so long it has now become normal food in many people’s minds.
      People are working longer hours and either don’t have time to cook or have been raised on fast food themselves, it’s fast, cheap and tastes good – yes, it must do or people wouldn’t eat it. Also all that sugar and fat is addictive.

    • 0
      0

      People have to do lots of things. And nobody on here, is people , they are simply themselves, generalisations are very very unhelpful. Big Bear I see your point mate.

  7. 0
    0

    Forget the obese who don’t seem to know the difference between food and junk and need a lesson in self-discipline. You can live cheaply on good food even if you are too lazy to cook. You just need to know the difference between food and junk and not acquire a taste for junk. But let’s face it, we’re not just talking about drawing Super out for weightloss surgery. There are plenty of other medical situations that require lots and lots of money even if you have top private hospital insurance. That is the truly ridiculous situation where we have Medicare, the PBS and top private hospital cover but still have to fork out loads of money if we get seriously ill just to have the comfort of a private room which is just the equivalent of your private bedroom at home.

  8. 0
    0

    It’s my money I should be free to choose what I do with it.
    If some Leftard social justice warrior masquerading as a Doctor and AMA honcho says we shouldn’t then he should be reminded of his day job and to stop acting as a Financial Advisor

  9. 0
    0

    I have to agree with you Rosret. You only have to look at the Kids Menu to see where one of the problems lies. This is one reason to like Jamie Oliver. At least he pushes the importance of good food but just look at the resistance he came up against when he tried to introduce good food into schools in America. Soft drinks, fruit juices and snacks are big business. Everyone will have more money for the real necessities in life if they just look at how much they spend on unnecessary “food”. We need to get back to being satisfied with the taste of water out of the tap instead of all these extra coffees, soft drinks and fruit juices.

    • 0
      0

      Absolutely. In fact Jamie’s Oliver’s fruit punch – water melon and lemon slices with a dash of basil leaves and the grand kids love it. I do too. Zip in the way of calories and its so good for you.
      I just say,”Would you like a Jamie Oliver?” and they always reply, “Yes, please.”
      However, it is expensive and I do understand why the low-socio economic population is eating, and then becoming addicted to, the junk food.

  10. 0
    0

    What about the dilemma for those of us who have managed to obtain some super, but still depend upon the aged pension ‘entitlement’, (and I don’t say entitlement lightly) to ward off living on the poverty line……and who then fall ill, requiring life-saving medical intervention.
    Under these circumstances, utilizing the public health system often means an early death sentence due to lack appropriate facilities and long waiting queues.

    Thus, many people, in order to live longer, have to dip into what super they have to withdraw a lump sum in order to finance an operation or attempt to obtain life saving treatment – and there’s no second guessing as to who is waiting just around the corner to jump into action to cut down your pension payment because you have done this!
    Plus – courtesy of the tax department – there are now proportionate income taxes due, simply because you feel the need to live a little longer.

    • 0
      0

      Ductape if it were a life saving medical intervention that was required the person would get it under medicare. It is the elective surgery they would have to wait for. i.e. interventions for ailments that may be deemed necessary but not life saving e.g. knee replacement but it won’t kill them if they have to wait.

    • 0
      0

      KSS it is a much bigger issue than this. (excuse the pun). Many aren’t actually eating that much. However what they are eating is low in nutrition and high in carbs/fat/sugar/salt.
      The lower the socio-economic group the more they eat the cheaper foods. They taste good and are very addictive so they crave the next hit of junk food and even dislike the thought of fruit and veggies.
      It really is time for governments to intervene rather than just tax everything.

    • 0
      0

      Well KSS, a friends mother waited nearly 5 years for cataract surger. It didn’t kill her but her eyesight decreased where her quality of life was severely affected. Another friends mother was waiting in constant pain for hip replacement. Fortunately her family were in a position to help out. In these situations, I would access my super as waiting lists are too long

    • 0
      0

      I understand what you’re trying to convey KSS, but this is not always the case. In a great many instance’s, waiting for an appointment to have life saving medical treatment utilizing the public system via Medicare, can place a patient at far greater risk of dying, simply because of the long waiting queues.

      It’s not what the medical profession likes to broadcast, but from personal experience, I know this to be the case. I suddenly developed cancer and was extremely lucky I had a little super and was able to utilize most of it to circumvent the public system by going private within three weeks of the cancer being discovered.

      Had I not had the opportunity to delve into my meagre super, I would have had to wait over three to four months to get it done via Medicare – and even then, there was no guarantee the op could have proceeded after this time period – unless of course the cancer was prone to becoming more aggressive, or had metastasized.

      If this was to occur, then certainly, the system via Medicare would have come to my aid, but because of the wait, the odds against me surviving very long would have become far greater.

      Not having to wait for the public system, gave me my best chance.

      ‘Sundays’ comments are so right – better to spend your Super and remain poorer for the experience, than become some rich dude buried in the cemetery.

Load More Comments

FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Health

Mozzies biting? Here's how to choose a repellent - and how to use it

Mozzies biting? Here's how to choose a repellent (and how to use it for the best protection) Shutterstock Cameron Webb,...

Entertainment

Sir Bob Geldof on grief, fame and getting through it all

I've hardly started questioning Sir Bob Geldof before he is off on a long, sweary rant about everything he thinks...

Australia

Abandon Australia Day and choose the history we want to celebrate?

Australia Day is the anniversary of the arrival of the First Fleet in Australia. On 26 January 1788, 11 convict...

Community

Speaking up for the disappearing art of listening

Columnist Peter Leith is 91 and describes himself as "half-deaf and half-blind". But he sees and hears a lot and...

Beauty

Hyperpigmentation: How to tackle those tricky dark patches on your ski

There are plenty of great things about summer - sunshine, picnics and fruity cocktails immediately spring to mind - but...

Australia

Enthralling, dystopian, sublime: NGV Triennial has a huge 'wow' factor

Refik Anadol: Quantum memories 2020 (render) custom software, quantum computing, generative algorithm with artificial intelligence (AI), real time digital animation...

Australia

Where to eat, drink and play on Kangaroo Island

Australia's third largest island is an oasis of pristine wilderness, premium produce and hidden secrets ripe for discovery. Easily accessible...

COVID-19

Will you need a vaccination to visit Australian venues?

State premiers have suggested that once vaccinations begin in Australia, those without vaccinations may be banned from visiting some venues...

LOADING MORE ARTICLE...